SC asks ED to consider releasing funds from frozen TMC accounts

The Supreme Court on Monday asked the Enforcement Directorate (ED) to consider allowing limited access to funds from three debit-frozen bank accounts of the Trinamool Congress (TMC), saying the party would need money for routine expenses and legal proceedings while the dispute remains pending.

A bench of Justices MM Sundresh and PB Varale suggested that the Central agency obtain instructions and respond after a week, Live Law reported. The court made it clear that it was not commenting on the merits of the case, which is currently before the Calcutta High Court.

“We have suggested both sides that some amount can be released for the administrator for daily expenses and some other necessary expenses. We clarify that we have not dealt with the merit of the case since the matter is pending before the Calcutta High Court,” the bench was quoted as saying by Live Law. The matter has been posted for hearing next week on August 11.

TMC says freeze has affected daily functioning

The observations came during the hearing of the TMC's appeal against the Calcutta High Court's July 20 order refusing interim relief against the ED's decision to freeze three HDFC Bank accounts.

Appearing for the party, senior advocates Kapil Sibal and Menaka Guruswamy argued that the freezing order had left the TMC without access to funds needed for salaries, legal expenses and day-to-day organisational work.

Per Live Law, the bench also questioned the ED's position, asking, “It looks very vague. What are the proceeds of crime you are talking about?” The judges further sought an explanation on what formed the basis for freezing the entire amount in the accounts.

ED cites money laundering probe

Representing the ED, Additional Solicitor General SV Raju said the freezing order had been issued before the appointment of the court-appointed administrator, per Live Law. He also argued that the TMC had several other bank accounts and was not entirely without funds.

The case stems from an ED investigation under the Prevention of Money Laundering Act (PMLA) into alleged diversion of party funds. According to the agency, around Rs 133.84 crore was transferred from one of the TMC's bank accounts to Carewell Aviation India Pvt Ltd in suspicious transactions.

During searches conducted in July, the ED reportedly froze six bank accounts, including three HDFC Bank accounts belonging to the TMC, stating that the three accounts together held around Rs 440 crore. The party has challenged the action, calling it arbitrary, while the legal proceedings continue before the Calcutta High Court.