BENGALURU: A special court in the city dismissed an application seeking directions to the Directorate of Enforcement (ED) to release and restore 95 immovable properties and four bank accounts belonging to Sri Kanva Souhardha Credit Co-operative Limited and Kanva Group of Companies and provisionally attached in 2020 and 2021.
The application was filed by the Authority for Sri Kanva Souhardha Credit Co-operative Limited and Kanva Group of Companies, the Additional Regional Commissioner of Bengaluru Division who is the statutory Authority appointed under the Karnataka Protection of Interest of Depositors in Financial Establishments Act (KPIDFE Act) and Liquidator of Kanva Fashions Limited.
Kanva Souhardha Credit Co-operative Limited and Kanva Group of Companies collected approximately Rs 650 crore from 21,000 depositors and defaulted on repayment. “This court is conscious of the object of the KPIDFE Act and the plight of the depositors. The statutory purpose of protecting depositors is important. However, the court must also ensure that the procedure prescribed under the Prevention of Money Laundering Act (PMLA) is followed before directing release or restoration the properties,” the court said.
Judge Jayaprakash A, XXXII Additional City Civil and Sessions Court and Special Judge for CBI Cases, rejected the applications filed under Sections 8(7) and 8(8) of the PMLA.
The court noted that the applicant seeks a positive direction to the ED to release 95 immovable properties and four bank accounts. Such a direction, at the present stage, would effectively interfere with the statutory process under the PMLA without the necessary findings under its Sections 8(3), 8(5) and 8(6), or Section 8(7), as the case may be. Therefore, this court is of the opinion that the applicants have failed to establish the statutory basis for granting the relief sought under Sections 8(7) and 8(8), it said.