BENGALURU: In a setback to United Breweries (Holdings) Limited, the Enforcement Directorate (ED) on Tuesday told the High Court that it will not agree to the sale of shares of United Spirits Ltd and others attached by it and deposit the proceeds in court.
The ED also clarified that shares cannot be sold till the conclusion of confiscation proceedings and conclusion of trial of the offence under the provisions of the Prevention of Money Laundering Act.
It said that since it also had reasons to believe that UBHL was in possession of proceeds of crime, it had initiated the attachment proceedings, which had been confirmed by the Adjudicating Authority.
The ED said that if the shares are sold, “severe harm and injury would be caused to the ED whereas no such harm or injury would be caused to UBHL.”
During the previous hearing, UBHL’s counsel had submitted that more than 40 lakh shares lying with the ED could be sold and the proceeds could be paid to the banks in partial satisfaction of the claims or proceeds could be deposited with the court to safeguard interest of the banks.
A division bench of Chief Justice Subhro Kamal Mukherjee and Justice P S Dinesh Kumar had then asked S Mahesh, the Special Public Prosecutor, ED, Mumbai Zone, to decide whether the shares attached by it could be sold or not.
Mahesh on Tuesday gave a written submission explaining the legal provisions which do not empower ED to permit the sale of the shares.
The bench asked the liquidator not to precipitate the matter and posted the next hearing after three weeks.
The bench is hearing an appeal filed by UBHL against a single-judge bench’s order in February to wind up the firm for its failure to discharge the guarantee obligations to the banks which had lent to Kingfisher Airlines Limited.
Relief for KPSC member
The HC on Tuesday quashed the cognizance taken against Mangala Sridhar, member of KPSC, by the Lokayukta Special Court on August 16, 2014 for alleged irregularities in the process of appointing 2011 batch gazetted probationers.
Justice Anand Byrareddy allowed the petition filed by Mangala Sridhar challenging the criminal proceedings against her on the ground that the criminal investigating department did not take sanction from the President of India, the competent authority, to prosecute her.
However, the judge gave liberty to the probe agency to proceed with the case by re-submitting the chargesheet after obtaining prior sanction in accordance with law.