High Court status quo on attached assets in Bhushan Power case

The Delhi High Court has restrained the Enforcement Directorate from taking coercive steps on properties worth ₹204 crore it had attached from former Bhushan Power and Steel chairman Sanjay Singhal until an appellate tribunal – which is currently non-functional – hears the matter.

The court has also restrained Singhal and his companies from creating any third-party rights in the said properties till the Prevention of Money Laundering (PMLA) Appellate Tribunal becomes functional and takes up the matter.

ED had in March 2020 attached four properties worth ₹204 crore belonging to Singhal in connection with an alleged ₹47,000-crore bank fraud case. An adjudicating authority upheld the provisional attachment on July 12, as first reported by ET last month.
One of Singhal’s companies moved the Delhi High Court last week, contending that the company had filed an appeal against the authority’s order in the PMLA Appellate Tribunal. But the appeal is not being taken up for consideration since the appellate tribunal is “not functional for want of quorum”, advocate Vijay Aggarwal told the court on behalf of the company.

The appellate tribunal is not functioning since April 4 when its acting chairman had retired, the court was told.

The company expressed apprehension that ED may take “coercive steps” in furtherance of the order of the adjudicating authority.

The HC has in an interim order directed the parties to maintain status quo on the said properties.

“Consequently, not only will ED stand restrained from acting in furtherance of the order, but the petitioner will also stand restrained from creating any third-party rights in subject properties, which form part of the attachment order, till the appeal is taken up for consideration by the tribunal,” the order reads.

Counsel for ED did not dispute the fact that the tribunal is presently not functional, the court recorded in its order.

PMLA Appellate Tribunal has been without a chairman since retired Justice Manmohan Singh’s term ended in September 2019.

The properties of Singhal that ED had attached last year include two houses in Delhi – one at Jor Bagh worth ₹74 crore and another at Tolstoy Marg worth ₹11 crore, a house in London (One Hyde Park, Knightsbridge) worth ₹99 crore, and fixed deposits worth ₹19 crore.

ET was the first to report on Thursday that the adjudicating authority has disapproved the “hurriedness” in sale of the said London house by StanChart Bank, holding that the sale was not executed in a “bona fide manner”.