The High Court of Delhi has directed Vivo India to pursue appellate remedies before the Appellate Authority under the Prevention of Money Laundering Act, 2002, in relation with the Enforcement Directorate ordering to debit freeze bank accounts of the Chinese smartphone manufacturer.
The Single-Judge Bench of Justice Prathiba M. Singh directed Vivo India to prefer an interim application before the Appellate Tribunal along with its appeal.
The High Court directed that both the interim applications and the final adjudication of Vivo India’s appeal may be conducted expeditiously before the Appellate Tribunal within four weeks, either from filing of the appeal or first listing along with interim applications.
It further took note of the fact that Vivo India had preferred an appeal before the Appellate Tribunal last month against the order passed by the Adjudicating Authority confirming the debit freeze order.
It said since the writ petitions itself were directed against the initial debit freeze orders, which have now merged with the final order passed on December 21, 2022 and the petitioner has already availed of the appellate remedy, it would be appropriate to relegate both the petitioners to pursue their appellate remedies before the Appellate Tribunal under the PMLA, in accordance with law.
The Single-Judge Bench further said that interim arrangements, which have been directed by this Court vide order dated July 13, 2022 and September 1, 2022, shall continue till the time the Appellate Tribunal decided the interim applications or till the final decision in the Appeals, in terms of the orders that may be passed by the Tribunal.
A coordinate bench of the court had, on July 13 last year, passed an interim order directing Vivo India to furnish a bank guarantee of Rs 950 crore. The company was further directed to maintain a credit balance of Rs 251 crore in its bank accounts.
The court later modified its order, directing the Chinese smartphone manufacturer on September 1, 2022 to maintain a credit balance of Rs 10.46 crore.
The Adjudicating Authority confirmed the debit freeze order on December 21, 2022.
In its affidavit filed in July last year, ED had alleged that the company’s seized bank accounts were clearly ‘involved’ in money laundering.
The national agency further submitted that it was not a case of mere commission of an economic offence, but an attempt to ‘destabilise’ the financial system of the country and also to threaten the integrity and sovereignty of the nation.
It alleged that Bin Lou, Director of Grand Prospect International Communication Pvt Ltd, a company already under investigation for charges of money laundering, had incorporated multiple companies all over the country and used them to transfer huge amount of funds to Vivo India.
The national agency further alleged that out of the total sale proceeds of Rs 1,25,185 crore, Vivo India remitted Rs 62,476 crore, almost 50 percent of the turnover out of India, mainly to China.
These remittances were made to claim huge losses by these companies to avoid payment of taxes in India, it added.
(Case title: Vivo Mobile India Pvt Ltd vs Directorate of Enforcement)