Decide on Vivo’s request to operate bank accounts, Delhi HC tells ED

The ED on Thursday said 48 locations across the country belonging to Vivo Mobiles India Private Limited and its 23 associated companies were searched on Tuesday in connection with a money laundering probe. The search at Vivo’s factory in Greater Noida continued on Thursday till late hours. At least nine bank accounts of Vivo were ordered to be ‘debit freezed’ by the ED on July 5.

Challenging the order, the Vivo Mobile India Private Limited in the petition said the central agency has undertaken a “roving and fishing enquiry” against it and continues to make “various attempts to disrupt” its business.

Stating that the accounts were being used by the company for day-to-day functioning, including payment of salaries and statutory dues, Vivo on Friday morning made a mentioning before the Chief Justice for urgent hearing of the case. The mentioning was allowed.

During the hearing in the afternoon, Justice Varma noted that the search in the case was ongoing and observed that PMLA does not appear to contemplate any lifting of the debit freeze or the seized articles pending confirmation by the adjudicating authority. The court also said the reasoning behind the orders for debit freezing of the accounts was not available at present and listed the case for further hearing on Wednesday.

“There is no question of lack of power,” said the court, adding that the power has been exercised by ED under Section 17 (1A) of the PMLA.

Senior advocate Siddharth Luthra, representing Vivo, argued that substantive revenue coming from online sales stands attached due to the freezing order and the company is unable to discharge its liabilities.

Senior advocate Siddhath Aggarwal, representing the ED, called the agency’s action “civil death before the first ball is bowled” and argued that the ED had chosen to take the route of Section 17 (1A) but for attachment, it had to take recourse to Section 5.

Aggarwal added there has to be a qualitative difference between power under Sections 5 and 17. “It cannot be that two routes lead to the same goal. Today without any concern about the source of funds… a carte blanche order is put which today is my civil death… if that happens I will not be here to cooperate in that investigation, suffer a trial, or defend myself, I will die,” he added.

Terming the petition premature, advocate Zoheb Hossain, representing the ED, argued that searches were ongoing and that company should have waited for completion of the statutory process. Hossain said the search would conclude on Thursday.

“Routinely debit freeze orders are passed. When the search was being conducted, the employees were trying to abscond, trying to hide digital devices, they were not cooperating with search proceedings…,” Hossain told the court.

Vivo, in the petition, said it had made a representation to the ED, saying “monthly payments of around Rs 2,826 crore have to be made towards statutory dues, salaries, rent and monies for daily business operations”.