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Rana Ayyub case: Delhi HC restrains PMLA Adjudicating Authority from proceeding on provisional attachment order

Journalist Rana Ayyub had sought a declaration and direction that the Enforcement Directorate provisional attachment order freezing over Rs 1.77 crore funds has lapsed and ceased to exist on expiry of 180 days

The ED had registered a case against Ayyub in connection with the funds collected by her through the Ketto platform to help people during the pandemic, and has accused her of not utilising the funds completely for the purpose they were raised. (Facebook/Rana Ayyub)

The Delhi High Court on Wednesday restrained the Adjudicating Authority under Prevention of Money Laundering Act (PMLA) from proceeding further towards taking any decision on the Enforcement Directorate’s (ED) provisional attachment order freezing over Rs 1.77 crore funds of journalist Rana Ayyub, who is facing a money laundering probe.

“Till the next date of listing [November 11], the respondent shall stand restrained from taking further steps as contemplated under Section 8 of the Prevention of Money Laundering Act, 2002. The petitioner shall also stand restrained from disposing of or creating any third party rights or encumbering the property which forms subject matter of the provisional order of attachment,” said Justice Yashwant Varma in an order passed on a petition filed by Ayyub through advocates Vrinda Grover and Soutik Banerjee.

The ED had registered a case against Ayyub in connection with the funds collected by her through the Ketto platform to help people during the pandemic, and has accused her of not utilising the funds completely for the purpose they were raised.

In the petition before the court, Ayyub sought a declaration and direction that the provisional attachment order passed by the ED on February 4, 2022 has lapsed and ceased to exist on expiry of 180 days. The proceedings before the Adjudicating Authority are no longer maintainable as the authority is rendered ‘functus officio’, said the plea.

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Issuing notice to the ED on Ayyub’s petition and seeking an affidavit within six weeks, Justice Varma noted that the court in a similar matter has already held that Adjudicating Authority would stand rendered as functus officio once the period of 180 days expires. However, the court also said that the decision is under challenge before the division bench. “Matter requires consideration,” said the court.

On filing of a complaint to the Adjudicating Authority by ED, Ayyub had been issued a show cause notice on March 8. She responded to the same on April 16 within the stipulated time, as per the petition. “Thus the proceedings till the filing of the petitioner’s reply had no delay and was in compliance with the timeline stipulated in the statute as well as the directions mentioned by the Ld. Adjudicating Authority in a note appended to the recording of reasons u/Sec 8(1) PMLA. The only delay was caused by the respondent who filed a very belated rejoinder on 22.07.22,” her counsel said in the petition.

According to the petition, the date for final arguments in the proceedings was fixed on July 4 and it was scheduled for August 3. However, the provisional attachment order was valid only till August 2. The petition further states that an application was moved on behalf of Ayyub before the Adjudicating Authority on August 3 for dismissal of the proceedings but the same was dismissed.

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“The present petition raises a short question of law, which it is humbly submitted has been wrongly decided by the Ld. Adjudicating Authority,” the counsel representing Ayyub has submitted before HC, adding that Adjudicating Authority can no longer pass an order of confirmation in terms of Section 8 (3) of PMLA.

First published on: 18-08-2022 at 03:20:02 pm
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