OPTO CIRCUIT INDIA LTD.versusAXIS BANK & ORS.

                          [2021] 2 S.C.R. 81                              81


                   OPTO CIRCUIT INDIA LTD.                                A
                                  v.
                       AXIS BANK & ORS.
                  (Criminal Appeal No. 102 of 2021)
                         FEBRUARY 03, 2021                                B
             [S.A. BOBDE, CJI, A.S. BOPANNA AND
                  V. RAMASUBRAMANIAN, JJ.]
       Prevention of Money-Laundering Act, 2002 – s.17, 2(v) and
s.2(w) – The Directorate of Enforcement initiated the proceedings
against the appellant under PMLA – In the said process the Deputy         C
Director, Directorate of Enforcement through the communication
dated 15.05.2020 addressed to the Anti Money-Laundering (AML)
Officer of Respondents No.1 to 3 Banks instructed them that the
accounts maintained by the appellant company be ‘debit freezed/
stop operations’ – Aggrieved, the appellant filed writ petition and       D
sought to quash the communication dated 15.05.2020 issued for
debit freezing the account – The High Court upheld the
communication dated 15.05.2020 – Before the Supreme Court,
appellant pleaded to defreeze the bank accounts for the purpose
statutory payments and payment of salaries to the employees – Held:
In the instant case, the procedure contemplated u/s.17 of PMLA            E
was not followed by the Officer Authorised – Except issuing the
impugned communication dated 15.05.2020 to AML Officer to seek
freezing, no other procedure contemplated in law is followed – The
said communication does not refer to the belief of the Authorised
Officer – It only states that the Officer is investigating the case and   F
seeks relevant document – Thereafter, it abruptly states that accounts
have to be ‘debit freezed/stop operations’ – However, what is
necessary is an order in the file recording the belief as provided u/
s. 17(1) of PMLA before the communication is issued and thereafter
the requirement of s.17(2) of PMLA after the freezing is complied
with – No material placed to indicate compliance of s.17 of PMLA,         G
more particularly recording the belief of commission of the act of
money laundering and placing it before the Adjudicating Authority
or for filing an application after securing the freezing of the account
– Therefore, freezing is without due compliance of the legal
requirement and not sustainable – The communication dated
                                                                          H
                                   81
82            SUPREME COURT REPORTS                        [2021] 2 S.C.R.


A    15.05.2020 is quashed – Since, the freezing was done without due
     compliance of law, the respondents directed to defreeze the accounts
     and honour payments advised by the appellant towards statutory
     dues etc.
           Interpretation of Statutes – If a statute provides for a thing to
B    be done in a particular manner, then it has to be done in that manner
     alone and in no other manner – If the salutary principle is kept in
     perspective, in the instant case, though the Authorised Officer in
     Prevention of Money-Laundering Act, 2002 is vested with sufficient
     power; such power is circumscribed by a procedure laid down under
     the statute – As such the power is to be exercised in that manner
C    alone, failing which it would fall foul of the requirement of complying
     due process under law.
           Prevention of Money-Laundering Act, 2002 – Scheme and
     object of – discussed.

D          Partly allowing the appeal, the Court
            HELD: 1. A perusal of s.17 of Prevention of Money-
     Laundering Act, 2002 (PMLA) would indicate that the pre-
     requisite is that the Director or such other Authorised Officer in
     order to exercise the power under Section 17 of PMLA, should
E    on the basis of information in his possession, have reason to
     believe that such person has committed acts relating to money
     laundering and there is need to seize any record or property found
     in the search. Such belief of the officer should be recorded in
     writing. Sub-section (1A) to Section 17 of PMLA provides that
     the Officer Authorised under sub-section (1) may make an order
F    to freeze such record or property where it is not practicable to
     seize such record or property. Sub-section (2) provides that after
     search and seizure or upon issuance of a freezing order the
     Authorised Officer shall forward a copy of the reasons recorded
     along with material in his possession to the Adjudicating Authority
G    in a sealed envelope. Sub-section (4) provides that the Authority
     seizing or freezing any record or property under sub-section (1)
     or (1A) shall within a period of thirty days from such seizure or
     freezing, as the case may be, file an application before the
     Adjudicating Authority requesting for retention of such record
     or properties seized. [Para 9][89-C-F]
H
      OPTO CIRCUIT INDIA LTD. v. AXIS BANK & ORS.                        83


       2. The scheme of the PMLA is well intended. While it seeks        A
to achieve the object of preventing money laundering and bring
to book the offenders, it also safeguards the rights of the persons
who would be proceeded against under the Act by ensuring
fairness in procedure. Hence a procedure, including timeline is
provided so as to ensure that power is exercised for the purpose
                                                                         B
to which the officer is vested with such power and the Adjudicating
Authority is also kept in the loop. In the instant case, the
procedure contemplated under Section 17 of PMLA to which
reference is made above has not been followed by the Officer
Authorised. Except issuing the impugned communication dated
15.05.2020 to AML Officer to seek freezing, no other procedure           C
contemplated in law is followed. In fact, the impugned
communication does not even refer to the belief of the Authorised
Officer even if the same was recorded separately. It only states
that the Officer is investigating the case and seeks for relevant
documents, but in the tabular column abruptly states that the
                                                                         D
accounts have to be ‘debit freezed/stop operations’. It certainly
is not the requirement that the communication addressed to the
Bank itself should contain all the details. But what is necessary
is an order in the file recording the belief as provided under
Section 17(1) of PMLA before the communication is issued and
thereafter the requirement of Section 17(2) of PMLA after the            E
freezing is made is complied. There is no other material placed
before the Court to indicate compliance of Section 17 of PMLA,
more particularly recording the belief of commission of the act of
money laundering and placing it before the Adjudicating Authority
or for filing application after securing the freezing of the account
                                                                         F
to be made. In that view, the freezing or the continuation thereof
is without due compliance of the legal requirement and, therefore,
not sustainable. [Para 11][90-B-G]
       3. This Court has time and again emphasised that if a statute
provides for a thing to be done in a particular manner, then it has
to be done in that manner alone and in no other manner. Therefore,       G
if the salutary principle is kept in perspective, in the instant case,
though the Authorised Officer is vested with sufficient power;
such power is circumscribed by a procedure laid down under the

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84            SUPREME COURT REPORTS                       [2021] 2 S.C.R.


A    statute. As such the power is to be exercised in that manner
     alone, failing which it would fall foul of the requirement of
     complying due process under law. This Court found fault with the
     Authorised Officer and declared the action bad only in so far as
     not following the legal requirement before and after freezing the
     account. This shall not be construed as an opinion expressed on
B
     the merit of the allegation or any other aspect relating to the
     matter and the action initiated against the appellant and its
     Directors which is a matter to be taken note in appropriate
     proceedings if at all any issue is raised by the aggrieved party.
     [Para 15][92-E-F; G-H; 93-A-C]
C          Mohinder Singh Gill & Another vs. The Chief Election
           Commissioner, New Delhi & Ors. (1978) 1 SCC 405 :
           [1978] 2 SCR 272; Chandra Kishor Jha vs. Mahavir
           Prasad and Ors. (1999) 8 SCC 266 : [1999] 2 Suppl.
           SCR 754 – relied on.
D                           Case Law Reference
     [1978] 2 SCR 272                 relied on              Para 13
     [1999] 2 Suppl. SCR 754          relied on              Para 15
           CRIMINAL APPELLATE JURISDICTION :Criminal Appeal No.
E    102 of 2021
           From the Judgment and Order dated 13.08.2020 of the High Court
     of Karnataka at Bengaluru in WP No. 8031/2020(GM-RES)
           S.V. Raju, ASG, Mukul Rohatgi, Sr. Adv. Shashikiran Shetty,
     Mahesh Thakur, Zoheb Hussain, Ms. Aakanksha Kaul, Tejas Patel,
F
     Bhuvan Kapoor, Kanu Agarwal, Arvind Kumar Sharma, P. S. Sudheer,
     Ms. Shruti Jose, Anil Kumar Sangal, Sidharth Sangal, Nilanjani Tandon,
     B.V. Balramdas, B. Krishna Prasad, Advs. for the appearing parties.
           The Judgment of the Court was delivered by
G          A.S. BOPANNA, J.
           1. Leave granted.
           2. The appellant is before this Court assailing the order dated
     13.08.2020 passed by the High Court of Karnataka in WP No.8031 of
     2020. Through the said common order the High Court has disposed of
H
      OPTO CIRCUIT INDIA LTD. v. AXIS BANK & ORS.                             85
                  [A.S. BOPANNA, J.]

two writ petitions but the consideration herein relates to the issue raised   A
in Writ Petition No.8031 of 2020 which was filed before the High Court,
by the appellant herein raising the issue relating to the freezing of their
bank account.
       3. When the Special Leave Petition was listed for admission, the
learned senior counsel for the appellant while assailing the order passed     B
by the High Court, inter alia contended that the freezing of the bank
accounts maintained by the appellant company has prejudiced the
appellant, inasmuch as, the amount in the account which belongs to the
appellant is made unavailable to them due to which statutory payments
to be made to the Competent Authorities under various enactments is
withheld and the payment of salary which is due to the employees is also      C
prevented. In that background, this Court though had not found any reason
to interfere with the initiation of the proceedings under the Prevention of
Money-Laundering Act, 2002 (‘PMLA’ for short) had, however, limited
the scope of consideration in this appeal on the issue of defreezing the
bank account so as to enable the appellant to make the statutory              D
payments. In that view, notice had been issued to the respondent through
the order dated 11.09.2020 in the following manner - “issue notice
restricted to the purpose of enabling necessary payment returnable within
two weeks”. The respondent on being served, having appeared has filed
the counter affidavit on behalf of respondent No.4.
                                                                              E
       4. In that background we have heard Mr. Mukul Rohatgi, learned
Senior Advocate for the appellant and Mr. S.V. Raju, learned Additional
Solicitor General for the respondent No.4 and perused the petition papers.
        5. The instant appeal arises out of the proceedings initiated by
respondent No.4 against the appellant under the PMLA. The analogous           F
matter, which was considered by the High Court along with the writ
petition which is the subject matter herein related to the action initiated
by the Central Bureau of Investigation (‘CBI’ for short) for the alleged
predicate offence and the instant proceedings is a fall out of the same. It
is in that background the Enforcement Directorate in order to track the
money trail relating to the predicate offence and prevent layering of the     G
same has initiated the proceedings under the PMLA. In the said process
the Deputy Director, Directorate of Enforcement through the
communication dated 15.05.2020 addressed to the Anti Money-
Laundering Officer (‘AML’ for short) of Respondents No.1 to 3 Banks
instructed them that the accounts maintained by the appellant company         H
86             SUPREME COURT REPORTS                            [2021] 2 S.C.R.


A    be ‘debit freezed/stop operations’ until further orders, with immediate
     effect. It is in that light the appellant claiming to be aggrieved filed WP
     No. 8031 of 2020 before the High Court seeking for issue of an appropriate
     writ to quash the communication dated 15.05.2020 issued for debit
     freezing the account No.914020014786978 maintained with the
     respondent No.1, account No.200006044354 maintained with the
B
     respondent No.2 and the account No. 39305709999 maintained with the
     respondent No.3. The appellant in that regard also prayed that the
     respondents be directed to defreeze the accounts to which reference is
     made.
            6. The High Court considered the matter in detail and has taken
C    into consideration the object with which the PMLA was enacted and the
     validity of the Act being considered by the High Court in the decisions
     referred to in the course of the order. The permissibility and scope of
     parallel proceedings under Section 3 and 4 of PMLA was adverted to in
     detail and upheld the action. Insofar as the reasoning adopted and the
D    conclusion reached by the High Court with regard to the power and
     competence to initiate the proceedings under the PMLA in view of the
     action taken for predicate offence, the High Court was very much
     justified. However, the High Court having held that the impugned
     communication was with competence or justification ought to have
     examined whether the ‘due process’ as contemplated under the PMLA
E    was complied so as to make it valid and sustainable in law, though the
     power under the Act was available. As already noticed, the consideration
     to be made in this appeal is therefore limited to the aspect of freezing/
     defreezing the account, more particularly keeping in view the requirement
     of the appellant to make the statutory payments even if the freezing of
F    the account is found justified.
             7. While adverting to this aspect of the matter, what cannot be
     lost sight is also the fact as to whether the power available to the competent
     authority has been exercised in the manner as is contemplated under
     PMLA. The Directorate of Enforcement (Respondent No.4) in their
G    counter affidavit has taken contradictory stand inasmuch as, while
     explaining the need to freeze the account has stated that the ‘stop
     operation’ was requested to stop the further layering/diversion of proceeds
     of crime and to safeguard the proceeds of crime, which we notice is a
     power available under PMLA. But in the counter affidavit it is strangely
     stated that the same has not been done under Section 17(1) of the PMLA.
H
      OPTO CIRCUIT INDIA LTD. v. AXIS BANK & ORS.                           87
                  [A.S. BOPANNA, J.]

However, in contrast it has been further averred with regard to the power   A
available under PMLA and that PMLA being a stand-alone enactment
and independent process whereunder Section 71 of PMLA has an
overriding affect over other laws. Irrespective of the stand taken, the
power exercised by the Competent Authority should be shown to be in
the manner as has been provided in law, in this case under PMLA.
                                                                            B
       8. To appreciate this aspect, it would be appropriate to refer to
Section 17 of PMLA whereunder the freezing of such property or record
is also provided. Section 17 of PMLA reads as hereunder: -
      17. Search and seizure- (1) Where the Director or any other
      officer not below the rank of Deputy Director authorized              C
      by him for the purposes of this section, on the basis of
      information in his possession, has reason to believe (the
      reason for such belief to be recorded in writing) that any
      person-
         (i)          has committed any act which constitutes money-        D
                      laundering, or
         (ii)         is in possession of any proceeds of crime involved
                      in money-laundering, or
         (iii)        is in possession of any records relating to money-
                      laundering, or                                        E
         (iv)         is in possession of any property related to crime
                      then, subject to the rules made in this behalf, he
                      may authorise any officer subordinate to him to-
                (a)     Enter and search any building, place, vessel,
                                                                            F
                        vehicle or aircraft where he has reason to
                        suspect that such records or proceeds of crime
                        are kept;
                (b)     Break open the lock of any door, box, locker,
                        safe, almirah or other receptacle for exercising
                        the powers conferred by clause (a) where the        G
                        keys thereof are not available;
                (c)     seize any record or property found as a result
                        of such search;

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88     SUPREME COURT REPORTS                       [2021] 2 S.C.R.


A          (d)   place marks of identification on such record of
                 property, if required or make or cause to be
                 made extracts or copies therefrom;
           (e)   make a note or an inventory of such record or
                 property;
B          (f)   examine on oath any person, who is found to be
                 in possession or control of any record or
                 property, in respect of all matters relevant for
                 the purposes of any investigation under this Act:
     (1A) Where it is not practicable to seize such record or
C    property, the officer authorised under sub-section (1), may
     make an order to freeze such property whereupon the
     property shall not be transferred or otherwise dealt with,
     except with the prior permission of the officer making such
     order, and a copy of such order shall be served on the
D    person concerned:
     Provided that if, at any time before its confiscation under
     sub-section (5) or sub-section (7) of section 8 or section
     58B or sub-section (2A) of section 60, it becomes practical
     to seize a frozen property, the officer authorised under sub-
E    section (1) may seize such property.
     (2) The authority, who has been authorised under sub-
     section (1) shall, immediately after search and seizure or
     upon issuance of a freezing order forward a copy of the
     reasons so recorded along with material in his possession,
F    referred to in that sub-section, to the Adjudicating Authority
     in a sealed envelope, in the manner, as may be prescribed
     and such Adjudicating Authority shall keep such reasons
     and material for such period, as may be prescribed.
     (3) Where an authority, upon information obtained during
     survey under section 16, is satisfied that any evidence shall
G
     be or is likely to be concealed or tampered with, he may,
     for reasons to be recorded in writing, enter and search the
     building or place where such evidence is located and seize
     that evidence:
     Provided that no authorisation referred to in sub-section
H    (1) shall be required for search under this sub-section.
      OPTO CIRCUIT INDIA LTD. v. AXIS BANK & ORS.                             89
                  [A.S. BOPANNA, J.]

      (4) the authority seizing any record or property under sub-             A
      section (1) or freezing any record or property under sub-
      section (1A) shall, within a period of thirty days from such
      seizure or freezing, as the case may be, file an application,
      requesting for retention of such record or property seized
      under sub-section (1) or for continuation of the order of
                                                                              B
      freezing served under sub-section (1A), before the
      Adjudicating Authority.
                                                   (emphasis supplied)
       9. A perusal of the above provision would indicate that the pre-
requisite is that the Director or such other Authorised Officer in order to   C
exercise the power under Section 17 of PMLA, should on the basis of
information in his possession, have reason to believe that such person
has committed acts relating to money laundering and there is need to
seize any record or property found in the search. Such belief of the
officer should be recorded in writing. Sub-section (1A) to Section 17 of
PMLA provides that the Officer Authorised under sub-section (1) may           D
make an order to freeze such record or property where it is not practicable
to seize such record or property. Sub-section (2) provides that after
search and seizure or upon issuance of a freezing order the Authorised
Officer shall forward a copy of the reasons recorded along with material
in his possession to the Adjudicating Authority in a sealed envelope.         E
Sub-section (4) provides that the Authority seizing or freezing any record
or property under sub-section (1) or (1A) shall within a period of thirty
days from such seizure or freezing, as the case may be, file an application
before the Adjudicating Authority requesting for retention of such record
or properties seized.
                                                                              F
      10. For the purpose of clarity, it is emphasised that the freezing of
the account will also require the same procedure since a bank account
having alleged ‘proceeds of crime’ would fall both under the ambit
“property” and “records”. In that regard it would be appropriate to take
note of Section 2(v) and (w) of PMLA which defines “property” and
“records”. The same read as follows:                                          G
      “Sec. 2(v) - “property” - means any property or assets of
      every description, whether corporeal or incorporeal,
      movable or immovable, tangible or intangible and includes
      deeds and instruments evidencing title to, or interest in,
      such property or assets, wherever located.”                             H
90             SUPREME COURT REPORTS                            [2021] 2 S.C.R.


A            “Sec. 2(w) – “records” – include the records maintained in
             the form of books or stored in a computer or such other
             form as may be prescribed.”
             11. The scheme of the PMLA is well intended. While it seeks to
     achieve the object of preventing money laundering and bring to book the
B    offenders, it also safeguards the rights of the persons who would be
     proceeded against under the Act by ensuring fairness in procedure. Hence
     a procedure, including timeline is provided so as to ensure that power is
     exercised for the purpose to which the officer is vested with such power
     and the Adjudicating Authority is also kept in the loop. In the instant
     case, the procedure contemplated under Section 17 of PMLA to which
C    reference is made above has not been followed by the Officer Authorised.
     Except issuing the impugned communication dated 15.05.2020 to AML
     Officer to seek freezing, no other procedure contemplated in law is
     followed. In fact, the impugned communication does not even refer to
     the belief of the Authorised Officer even if the same was recorded
D    separately. It only states that the Officer is investigating the case and
     seeks for relevant documents, but in the tabular column abruptly states
     that the accounts have to be ‘debit freezed/stop operations’. It certainly
     is not the requirement that the communication addressed to the Bank
     itself should contain all the details. But what is necessary is an order in
     the file recording the belief as provided under Section 17(1) of PMLA
E    before the communication is issued and thereafter the requirement of
     Section 17(2) of PMLA after the freezing is made is complied. There is
     no other material placed before the Court to indicate compliance of
     Section 17 of PMLA, more particularly recording the belief of commission
     of the act of money laundering and placing it before the Adjudicating
F    Authority or for filing application after securing the freezing of the account
     to be made. In that view, the freezing or the continuation thereof is
     without due compliance of the legal requirement and, therefore, not
     sustainable.
             12. Mr. S.V. Raju, learned Additional Solicitor General made a
     subtle attempt to contend that the power of seizure is available under
G    Section 102 of the Code of Criminal Procedure, which has been exercised
     and as such the freezing of the account would remain valid. We are
     unable to appreciate and accept such contention for more than one reason.
     Firstly, as noted, it has been the contention of Respondent No.4 that
     PMLA is a stand-alone enactment. If that be so and when such enactment
H    contains a provision for seizure which includes freezing, the power
       OPTO CIRCUIT INDIA LTD. v. AXIS BANK & ORS.                                91
                   [A.S. BOPANNA, J.]

available therein is to be exercised and the procedure contemplated               A
therein is to be complied. Secondly, when the power is available under
the special enactment, the question of resorting to the power under the
general law does not arise. Thirdly, the power under Section 102 CrPC
is to the Police Officer during the course of investigation and the scheme
of the provision is different from the scheme under PMLA. Further,
                                                                                  B
even sub-section (3) to Section 102 CrPC requires that the Police Officer
shall forthwith report the seizure to the Magistrate having jurisdiction,
the compliance of which is also not shown if the said provision was in
fact invoked. That apart, the impugned communication dated 15.05.2020
does not refer to the power being exercised under the Code of Criminal
Procedure.                                                                        C
        13. The action sought to be sustained should be with reference to
the contents of the impugned order/communication and the same cannot
be justified by improving the same through the contention raised in the
objection statement or affidavit filed before the Court. This has been
succinctly laid down by this Court in the case of Mohinder Singh Gill             D
& Another vs. The Chief Election Commissioner, New Delhi & Ors.
(1978) 1 SCC 405) as follows;
        “8. The second equally relevant matter is that when a statutory
        functionary makes an order based on certain grounds, its validity
        must be judged by the reasons so mentioned and cannot be
        supplemented by fresh reasons in the shape of affidavit or                E
        otherwise. Otherwise, an order bad in the beginning may, by the
        time it comes to court on account of a challenge, get validated by
        additional grounds later brought out. We may here draw attention
        to the observations of Bose J. in Gordhandas Bhanji:
        (1) “Public orders, publicly made, in exercise of a statutory authority   F
        cannot be construed in the light of explanations subsequently given
        by the officer making the order of what he meant, or of what was
        in his mind, or what he intended to do. Public orders made by
        public authorities are meant to have public effect and are intended
        to effect the actings and conduct of those to whom they are
                                                                                  G
        addressed and must be construed objectively with reference to
        the language used in the order itself.”
        Orders are not like old wine becoming better as they grow older:”
        In fact, in the instant case such contention of having exercised
power under Section 102 CrPC has not been put forth even in the counter
                                                                                  H
92             SUPREME COURT REPORTS                            [2021] 2 S.C.R.


A    affidavit, either in this appeal or before the High Court and has only
     been the attempted ingenuity of the learned Additional Solicitor General.
     Such contention, therefore, cannot be accepted. In fact, in the objection
     statement filed before the High Court much emphasis has been laid on
     the power available under PMLA and the same being exercised though
     without specifically referring to the power available under Section 17 of
B
     PMLA.
            14. The respondent No.4 in the counter affidavit has stated that
     the action initiated against the appellant is based on the complaint dated
     02.11.2019 made by the State Bank of India alleging that the appellant,
     its Chairman and the Promoter Directors have conspired and cheated
C    them to tune of Rs. 354.32 crores by diversion of funds abroad. In that
     regard the CBI has registered the case in FIR No. RC 18(A)/2019 dated
     04.11.2019 under Section 120(B) read with Section 420, 468 and 471
     IPC and under Section 13(2) read with section 13(1)(d) of Prevention of
     Corruption Act, 1988. Since the said offences are also schedule offences
D    under Section 2(1)(x) and (y) of PMLA, the case in ECIR-BGZO/01/
     2020 was recorded by the Directorate on 02.01.2020 and action is taken
     to safeguard the alleged proceeds of crime. On that aspect we have
     already indicated that the High Court was justified in upholding the action
     initiated under the PMLA but the consideration herein was only with
     regard to freezing of the bank account and as to whether while doing so
E    the due process had been complied by adhering to the procedure
     prescribed under Section 17 of PMLA.
            15. This Court has time and again emphasised that if a statute
     provides for a thing to be done in a particular manner, then it has to be
     done in that manner alone and in no other manner. Among others, in a
F    matter relating to the presentation of an Election Petition, as per the
     procedure prescribed under the Patna High Court Rules, this Court had
     an occasion to consider the Rules to find out as to what would be a valid
     presentation of an Election Petition in the case of Chandra Kishor Jha
     vs. Mahavir Prasad and Ors. (1999) 8 SCC 266 and in the course of
     consideration observed as hereunder:
G
            “It is a well settled salutary principle that if a statute provides for
            a thing to be done in a particular manner, then it has to be done in
            that manner and in no other manner”.
            Therefore, if the salutary principle is kept in perspective, in the
     instant case, though the Authorised Officer is vested with sufficient power;
H
       OPTO CIRCUIT INDIA LTD. v. AXIS BANK & ORS.                                93
                   [A.S. BOPANNA, J.]

such power is circumscribed by a procedure laid down under the statute.           A
As such the power is to be exercised in that manner alone, failing which
it would fall foul of the requirement of complying due process under law.
We have found fault with the Authorised Officer and declared the action
bad only in so far as not following the legal requirement before and after
freezing the account. This shall not be construed as an opinion expressed
                                                                                  B
on the merit of the allegation or any other aspect relating to the matter
and the action initiated against the appellant and its Directors which is a
matter to be taken note in appropriate proceedings if at all any issue is
raised by the aggrieved party.
       16. Apart from the above consideration, what has also engaged
the attention of this Court is with regard to the plea put forth on behalf of     C
the appellant regarding the need to defreeze the account to enable the
appellant to pay the statutory dues. The appellant in that regard has
relied on the certificate issued by the Chartered Accountant, (Annexure-
P/38 at page 231) which indicates the amount payable towards ITDS,
PF, ESI, Professional Tax, Gratuity and LIC employees’ deductions, in             D
all amounting to Rs.79,93,124/-. Since we have indicated that the freezing
has been done without due compliance of law, it is necessary to direct
the respondents No.1 to 3 to defreeze the respective accounts and clear
the cheques issued by the appellant, drawn in favour of the Competent
Authority towards the ITDS, PF, ESI, Professional Tax, Gratuity and
LIC employees’ deductions, subject to availability of the funds in the            E
account concerned. Needless to mention that if any further amount is
available in the account after payment of the statutory dues and with
regard to the same any action is to be taken by the respondent No.4
within a reasonable time, it would open to them to do so subject to
compliance of the required procedure afresh, as contemplated in law.              F
       17. In terms of the above, the communication dated 15.05.2020 is
quashed. We direct that the respondents shall defreeze the accounts
bearing Nos. 914020014786978, 200006044354 and 39305709999 and
honour payments advised by the appellant towards statutory dues stated
supra. Liberty is reserved to Respondent No.4 thereafter to initiate action
afresh in accordance with law, if they so desire.                                 G
       18. The appeal is allowed to the above extent with no order as to
costs.


Ankit Gyan                                                Appeal partly allowed   H