Karnataka HC upholds seizure of Xiaomi accounts by ED

Recently, the Karnataka High Court has rejected the writ petition by Xiaomi, a Chinese technology company, challenging an order of the Enforcement Directorate (ED) seizing Rs 5,551.27 crore from its bank accounts.

In a ruling issued on April 21, Justice M Nagaprasanna stated that Xiaomi India’s challenge to the seizure under Article 14 of the Constitution was unconstitutional because Article 14 is person-centric and applies only to individuals.

This was Xiaomi’s second legal move against the ED’s action. It had moved the High Court shortly after the ED seized its fund in April this year. In May, the Court granted it the permission to use the bank accounts only to meet it’s day-to-day expenses and to take overdraft from the seized bank accounts to make payments to overseas business, except royalty payments.

Later, in July, the Court dismissed the petition, noting that the ED had already submitted the seizure order for confirmation to the competent authority. The Court gave the appropriate authority 60 days to rule on the ED’s action.