Delhi HC Asks Vivo To Seek Remedies Before PMLA Appellate Tribunal In Response To ED’s Freezing Of Debt Accounts

The Delhi High Court on Friday has ordered the Vivo India to seek its appellate remedies before the Appellate Authority under the Prevention of Money Laundering Act, 2002 (PMLA), after hearing its petition against the order of the Enforcement Directorate (ED) to debit freeze its bank accounts.

Justice Prathiba M Singh noted that Vivo India filed an appeal before the Appellate Tribunal last month against the order passed by Adjudicating Authority confirming the debit freeze order.

The court ordered Vivo India to file an interim application before the Appellate Tribunal along with its appeal, which will be heard within four weeks and adjudicated expeditiously.

“Given that the writ petitions themselves were directed against the initial debit freeze orders, which have now merged with the final order passed on 21st December, 2022, and the petitioner has already availed of the appellate remedy, it is deemed appropriate to relegate both the petitioners to pursue their appellate remedies before the Appellate Tribunal, under the PMLA, in accordance with law,” the court stated.

“The interim arrangements, as directed by this Court in orders dated 13th July, 2022 and 1st September, 2022, shall continue until the Appellate Tribunal decides the interim applications or until the final decision in the Appeals, in accordance with the orders that may be passed by the Tribunal,” the court added.

On July 13, 2022, a coordinate bench of the court passed an interim order ordering Vivo India to provide a bank guarantee in the amount of Rs.950 crores. It was also told to keep a credit sum of Rs. 251 crores in its bank accounts.

Later that year, on September 1st, the court ordered the Chinese smartphone maker to keep a credit balance of Rs.10,45,94,868.9. Meanwhile, the Adjudicating Authority has verified the debit freeze order on December 21, 2022.

Justice Singh ordered that the interim applications and final adjudication of Vivo India’s appeal be heard before the Appellate Tribunal within four weeks of the appeal’s filing or first listing with interim applications.

In response to Vivo’s plea, the ED claimed in an affidavit filed in July last year that the company’s seized bank accounts were “clearly involved in money laundering.”

The ED also claimed that it was not just a case of committing an economic crime, but an “attempt to destabilise the country’s financial system and also to threaten the integrity and sovereignty of the nation.”

According to the ED’s findings, Bin Lou, the Director of Grand Prospect International Communication Pvt Ltd, a company already under investigation for charges of money laundering, had incorporated multiple companies across the country and used them to transfer large sums of money to Vivo India.

It claims that Vivo India remitted Rs. 62,476 crores of the entire sale proceeds of Rs. 1,25,185 crores. i.e., nearly half of India’s exports, primarily to China.

According to the ED, these remittances were made to claim huge losses by these businesses in order to avoid paying taxes in India.