WA/133/2013 of DIRECTORATE OF ENFORCEMENT,HYD,AND 2 Vs M/S.SATYAM COMPUTER SERVICES LTD,AND 5 on 31 December 2014

HON’BLE SRI JUSTICE R. SUBHASH REDDYANDHON’BLE SRI JUSTICE A.SHANKAR NARAYANAWRIT APPEAL No.133 of 2013

JUDGMENT: (Per Justice R. Subhash Reddy)

This writ appeal under Clause 15 of the LettersPatent is filed by respondents 1 to 3 in writ petitionNo.37487 of 2012, aggrieved by the order of the learnedSingle Judge, dated 11.12.2012, passed inW.P.M.P.No.47572 of 2012.

2. The writ petition in W.P.No.37487 of 2012 is filedwith the prayers which read as under :

“to issue an appropriate Writ, Direction orOrder, particularly one in the nature of writ ofCertiorari and Prohibition;

(i) Quash the impugned ProvisionalAttachment Order being PAO.No.4/2012dated 18.10.2012 in ECIR/01/HZO/2009issued by Respondent No.1

(ii) Quash all consequential proceedings tothe impugned Provisional AttachmentOrder, including the Notice issued byRespondent No.3 dated 29[th] October2012 in OC No.161 of 2012.

(iii) Prohibit Respondents 1 and 3 fromexercising jurisdiction under thePrevention of Money Laundering Act,2002, pursuant to the impugnedProvisional Attachment Order beingPAO.No.4/2012 dated 18.10.2012 inECIR/01/HZO/2009.

(iv) Declare that the money in the fixeddeposits provisionally attached in theimpugned Provisional Attachment Orderbeing PAO No.4/2012 dated 18.10.2012in ECIR/01/HZO/2009 issued byRespondent No.1 does not representproceeds of crime.

(v) And pass such other order(s) as thisHon’ble Court deems fit and proper in theextraordinary circumstances of the casein the interests of justice.”

3. By way of miscellaneous petition inW.P.M.P.No.47572 of 2012, the 1[st] respondent-Companysought stay of impugned provisional attachment orderissued by the 1[st] appellant herein, in PAO.No.4/2012,dated 18.10.2012 in ECIR/01/HZO/2009, and theconsequential show cause notice bearing No.161/2012,dated 29.10.2012, issued by the adjudicating authorityunder the provisions of the Prevention of MoneyLaundering Act, 2002. The learned Single Judge, byorder dated 11.12.2012, allowed the aforesaidmiscellaneous petition and stayed all further proceedingspursuant to the attachment order dated 18.10.2012,including the notice dated 29.10.2012.

4. Before dealing with the contentions advanced bythe learned counsel on both sides, we deem it appropriateto give necessary background of the 1[st] respondent-Company, for appropriate adjudication of the matter.

5. The 1[st] respondent is a Company registered underthe Companies Act, 1956 and is a listed Company, havingabout 3 lac shareholders. It is a leading informationtechnology solutions provider, offering a comprehensiverange of IT consulting services to its customers, includingapplication development and maintenance services,consulting and enterprise business solutions, extendedengineering solutions, infrastructure managementservices and business process outsourcing services. TheCompany provides services to customers in variousindustries, including the manufacturing, banking, financialservices and insurance, telecommunications,infrastructure, media and entertainment, semiconductors,healthcare and life sciences, retail, transportation, publicsector and energy and utilities. The Company was initiallypromoted by Sri B.Ramalinga Raju and from time to time,the Company is grown very fast and has become the 4[th]largest I.T. Company in India with about 53,000employees and having clients in about 60 countries of theworld. The reputation and credibility of the Company hassuffered drastically in view of certain steps taken by theBoard of Directors during the period when SriB.Ramalinga Raju was Chairman of the Company, whenthey approved a proposal to acquire a stake in twoCompanies controlled and managed by the near relationsof the erstwhile Chairman. It appears, on 07.01.2009, the

then Chairman Sri Raju had addressed a letter to theBoard of Directors, SEBI and Stock Exchanges, wherein,it is alleged, he had admitted that the financial statementsof the Company include non-existent cash and bankbalances, reflect amounts as accrued interest which arefictitious, understate the Company’s liabilities whileoverstating its revenues and profit margins. The impact ofthe manipulation of the accounts runs into hundreds ofcrores of rupees.

6. After letter dated 07.01.2009 was addressed asstated above, it impacted the stock market, by which, on asingle day, the share price crashed from Rs.188/- toRs.38.40. Immediately, the Union of India started takingremedial steps in public interest and moved the CompanyLaw Board, A Principal Bench in New Delhi, by invokingprovisions of Sections 388B, 397, 398, 402 and 408 of theCompanies Act, 1956, for grant of several interim reliefsurgently. Based on such application, the Company LawBoard by order dated 09.01.2009, has passed interimorders suspending the then existing Board of Directorsand issued directions to the Central Government toconstitute a fresh Board of the Company with not morethan 10 persons of eminence as Directors, and furtherheld that such Board shall be entitled to exercise anddischarge all powers vested in the Board by the Articlesand the Act. Further directions are issued that the newly constituted Board shall meet within 7 days thereafter andtake immediate action necessary for running theCompany in proper lines.

7. Pursuant to such series of directions issued by theCompany Law Board, Union of India nominated eminentpersons on the Board of the Company and the Union ofIndia has also moved Company Petition No.1 of 2009,wherein, M/s.Satyam Computer Services Ltd. has filedCompany Application No.84 of 2009 under Sections388B, 397, 398, 402 and 408 of the Companies Act,1956, seeking several directions. On such application,the Company Law Board has passed orders on19.02.2009. The operative portion of said order reads asunder :

“Having convinced myself that, in the interestof the company, its employees, shareholders,customers and in the larger public interest,further induction of long term funds throughinduction of a strategic investor is necessary, Iauthorize the Board of the Company:1.To pass a resolution to amend thecapital clause of the Memorandum ofAssociation to increase the authorizedequity share capital of the company fromRs.160 crores comprising of 80 croresequity shares of Rs.2 each to Rs.280crores comprising of 140 crores equityshares of Rs.2 each. The resolution sopassed shall be deemed to be a onepassed in a general meeting in terms ofSection 17 of the Act.

2. To pass a resolution authorizing itselfto make a preferential allotment of equityshares at par or at a premium and thesaid resolution shall be deemed to be aspecial resolution passed in a generalmeeting in terms of Section 81(1A) of theAct.

3. To induct a strategic investor/s, subject to:

1. Devising a plan which providesfor a transparent, open andcompetitive process withoutfurthering the interests of anyparticular acquirer.

2. Obtaining of requisite approvalsfrom SEBI in terms of SEBITakeover Code.

3. The process of selection beingtransparent, open and by way of acompetitive price bid auction,overseen by a retired Judge of theSupreme Court/a former ChiefJustice of India.

4. Obtaining the approval of thisBoard before actually allotting theshares on a preferential basis, withfull details on the process adoptedin selecting the strategic investor/s.”

8. From the above series of directions issued, it isclear that the Company Law Board has recognized theneed for long term funding, and for that purpose, to inducta new promoter into the Company to enable infusion offresh capital into the Company. Pursuant to the said orderof Company Law Board, the Board nominated by

Government of India has initiated process for selection ofa strategic investor for the Company by way ofcompetitive bidding, and in the bid documents also, it wasmade clear that a capital infusion of Rs.1000 Crores wasrequired, of which, Rs.700 Crores will be used to repaythe existing loans. Several bidders have participated inthe auction and M/s.Venturbay Consultants Private Ltd.was declared as successful bidder. The Former ChiefJustice of India Hon’ble Sri Justice S.P.Barucha hassupervised the auction process and certified that auctionwas fair and transparent and after auction proceedingsare concluded, the Company Law Board has confirmedthe selection of M/s.Venturbay as promoter of theCompany and directed it to deposit a sum of Rs.1756Crores into the Company and also enable infusion ofadditional amount of Rs.1152 Crores through an openoffer under SEBI Regulations. Subsequently, on theapplication filed under Sections 391 and 394 read withSections 78 and 100 to 104 of Companies Act, 1956, theScheme of Amalgamation and Arrangement betweenVenturbay Consultants Private Limited, Satyam ComputerServices Limited, C & S System Technologies PrivateLtd., Canvasm Technologies Limited, Mahindra LogisoftBusiness Solutions Limited and Tech Mahindra Limitedand their respective shareholders and creditors, is alsoapproved by the Company Court, subject to condition thatpending prosecutions and investigations against the former Chairman and others shall continue and theattachment order by the Enforcement Directorate andother institutions shall continue till they are varied orvacated by the competent authority. The other conditionsare not relevant for the purpose of this appeal.

9. Based on the allegations made against the erstwhileChairman and Members of the Board, Central Bureau ofInvestigation has registered a case, completedinvestigation and filed final report on 07.04.2009 andsupplemental charge sheet on 22.11.2009 against SriB.Ramalinga Raju and other Directors on the Board forthe alleged offences under Sections 120-B read withSections 420, 419, 467, 468, 471, 477-A and 201 of IPC.

10. Consequent to filing of charge sheets referredabove, the 1[st]appellant-Directorate has initiatedproceedings under Section 5 of the Prevention of MoneyLaundering Act, 2002 mainly on the allegation that theerstwhile promoters of the Company have floated aprivate Company by name M/s.SRSR Holdings Pvt. Ltd.and all the shares held in the 1[st] respondent-Company inthe name of Sri B.Ramalinga Raju, Sri B.Rama Raju,Smt.B.Nandini Raju and Smt.B.Radha Raju etc., weretransferred to the said Company. M/s.SRSR Holdingsstarted pledging the shares of the above said personswith Non-Banking Finance Companies and loans

were obtained in the name of loan Companies to the tuneof Rs.1425 Crores and the same was transferred to theaccount of the 1[st] respondent/writ petitioner Company bythe 37 front Companies and an amount of Rs.194.6Crores was returned by the 1[st] respondent/Company to15 out of the above 37 Companies, leaving anoutstanding liability of Rs.1230.4 Crores still subsisting inthe 1[st] respondent/Company. Further, alleging that out ofthe said proceeds, an amount of Rs.822 Crores has beenlayered and finally parked with the 1[st]respondent/Company by the 34 front Companies andthese funds were later used by the 1[st]respondent/Company for meeting their day-to-dayexpenses like payment of salaries etc., as such, the saidmoney constitute proceeds of Crime within the meaning ofSection 2(1)(u) of Prevention of Money Laundering Act,2002, as such, ordered for provisional attachment of theproperties equivalent to Rs.822 Crores which are in theform of fixed deposit receipts in Andhra Bank, ING VysyaBank, IDBI Bank and Bank of Baroda held by 1[st]respondent-Company. Consequent to said orders, theadjudicating authority under the provisions of thePrevention of Money Laundering Act, 2002, has issuedconsequential notice dated 29.10.2012, to show cause asto why such property should not be declared to be theproperty involved in money laundering and could not be confiscated to the Central Government.

11. Assailing validity of such provisional attachmentorder dated 18.10.2012, issued in ECIR/01/HZO/2009 bythe 1[st] appellant and the consequential order issued bythe 3[rd] appellant/authority, the writ petition has been filed.

12. Mainly, in the writ petition, it is the case of 1[st]respondent that the money which is provisionallyattached, is the money infused by the strategic investorconsequent to the steps taken by the Union of India, assuch, no proceedings can be initiated under theprovisions of the Prevention of Money Laundering Act,2002 against the 1[st] respondent/Company, which is thevictim of crime. Further, it is pleaded that the noticeissued by the Enforcement Directorate is contrary to themandatory procedure contemplated under Sections 5(1)(c) and 8(1) of the said Act itself. It is the case of the writpetitioner that in the absence of any material so as toattract the provision under Section 5(1)(c) of the Act, suchdrastic powers ought not to have been invoked. Thelearned Single Judge, by order dated 11.12.2012, byrecording a finding that the appellate authority, exceptbaldly reproducing the language of Section 5(1)(c) of theMoney Laundering Act, 2002 in sub-para (j) of para 18 ofthe provisional attachment order, has failed to detail, as towhat reasons he had, to believe that the new

management of the petitioner/Company which wasbrought into picture after a laborious exercise by noneother than the Government of India itself, would eitherconceal, transfer or deal in any manner with the allegedproceeds of crime which may result in frustrating anyproceeding under the Prevention of Money LaunderingAct, 2002. The learned Single Judge also found that eventhe adjudicating authority has issued notice, mechanicallyexercising the jurisdiction without examining whether suchdeposits will be construed as proceeds of Crime or not. The learned Single Judge has passed detailed order afterhearing both sides on 11.12.2012, as against which, thiswrit appeal is preferred on 04.01.2013, but there was nointerim order all through.

13. Heard Sri Rajeev Avasthi, learned Special Counselfor 1[st] appellant/Enforcement Directorate, Sri S.Ravi,learned Senior Counsel appearing for 1[st] respondent andSri Avinash Desai, learned counsel appearing for theimpleaded respondent No.7.

14. Though detailed arguments are advanced and thelearned counsel for the parties have also placed relianceon some judgments in support of their arguments, asmuch as the writ petition is still pending and as this writappeal is filed only against the interlocutory order, weconfine the consideration only to the extent whether the order passed by the learned Single Judge to be continuedpending disposal of the writ appeal or not.

15. The Prevention of Money Laundering Act, 2002 isenacted with an object of preventing the moneylaundering and the Act provides for confiscation ofproperty derived of crime etc. Chapter-III of the Act dealswith Attachment, Adjudication and Confiscation and thesepowers are conferred under Sections 5 to 11 of the Act. For the purpose of disposal, we refer to the provisionunder Section 5 of the Act, which reads as under :

“5. Attachment of property involved in money-laundering:

(1) Where the Director, or any other officer notbelow the rank of Deputy Director authorizedby him for the purpose of this section, hasreason to believe (the reason for such belief tobe recorded in writing), on the basis of materialin his possession, that- (a)any person is in possession of anyproceeds of crime;proceeds of crime; (b)such person has been charged of havingcommitted a scheduled offence;committed a scheduled offence;

(c) such proceeds of crime are likely to beconcealed, transferred or dealt with in anymanner which may result in frustrating anyproceedings relating to confiscation of suchproceeds of crime under this Chapter,concealed, transferred or dealt with in anymanner which may result in frustrating anyproceedings relating to confiscation of suchproceeds of crime under this Chapter, he may, by order in writing, provisionally attachsuch property for a period not exceeding onehundred and fifty days from the date of theorder, in the manner provided in the SecondSchedule to the Income-tax Act, 1961 (43 of

1961), and the Director or the other officer soauthorized by him, as the case may be, shallbe deemed to be an officer under sub-rule (e)of Rule 1 of that Schedule:

PROVIDED that no such order of attachmentshall be made unless, in relation to thescheduled offence, a report has beenforwarded to a Magistrate under Section 173 ofthe Code of Criminal Procedure, 1973 (2 of1974), or a complaint has been filed by aperson, authorized to investigate the offencementioned in the Schedule, before aMagistrate or court for taking cognizance of thescheduled offence, as the case may be:

PROVIDED FURTHER that, notwithstandinganything contained in clause (b), any propertyof any person may be attached under thissection if the Director or any othr officer notbelow the rank of Deputy Director authorizedby him for the purpose of this section hasreason to believe (the reasons for such beliefto be recorded in writing), on the basis ofmaterial in his possession, that if such propertyinvolved in money-laundering is not attachedimmediately under this Chapter, the non-attachment of the property is likely to frustrateany proceeding under this Act.

(2) The Director, or any officer not below therank of Deputy Director, shall immediately afterattachment under sub-section (1), forward acopy of the order, along with the material in hispossession, referred to in that sub-section, tothe Adjudicating Authority, in a sealedenvelope, in the manner as may be prescribed and such Adjudicating Authority shall keepsuch order and material for such period asmay be prescribed.

(3) Every order of attachment made under sub-section (1) shall cease to have effect after theexpiry of the period specified in that sub-section or on the date of an order made undersub-section (2) of section 8, whichever isearlier.

(4) Nothing in this section shall prevent theperson interested in the enjoyment of theimmovable property attached under sub-section (1) from such enjoyment.

Explanation: For the purposes of this sub-section, “person interested”, in relation to anyimmovable property, includes all personsclaiming or entitled to claim any interest in theproperty.

(5) The Director or any other officer whoprovisionally attaches any property under sub-section (1), shall, within a period of thirty daysfrom such attachment, file a complaint statingthe facts of such attachment before theAdjudicating Authority.”

Section 8 of the Act deals with adjudication by theadjudicating authority on receipt of complaint under sub-section (5) of Section 5 of the Act or on the applicationsfiled under sub-section (4) of Section 17 or under sub-section (10) of Section 18 of the Act.

16. From a reading of the provisions under Sections 5and 8 of the Act, it is clear that under Section 5 of the Act,where the Director or any other officer not below the rankof Deputy Director authorized for the purpose of thisSection, has a reason to believe (the reason for suchbelief to be recorded in writing) on the basis of material inhis possession that any person is in possession of anyproceeds of crime, such person has been charged ofhaving committed a scheduled offence, such proceeds ofcrime are likely to be concealed, transferred or dealt within any manner which may result in frustrating anyproceedings relating to confiscation of such proceeds ofcrime under this Chapter, he is empowered provisionallyto pass orders to attach such property for a period notexceeding 150 days in the manner ordered in the SecondSchedule to the Income-Tax Act, 1961. So, from areading of the aforesaid provisions, it is clear that thecompetent authority, firstly, must have a reason to believeand such reasons are also required to be recorded inwriting not only to the effect that a person is in possessionof the proceeds of Crime and such person has beencharged for having committed an offence, but also torecord specific reasons that such proceeds are likely to beconcealed, transferred or dealt with in any manner whichmay result in frustrating any proceedings relating toconfiscation of such proceeds of crime under thisChapter. Similarly, to invoke powers under Section 8 of

the Act, if the adjudicating authority has reason to believethat such person has committed an offence under Section3 or is in possession of proceeds of crime, it may serve anotice of not less than thirty days on such person callingupon him to indicate the sources of his income, earning orassets, out of which or by means of which he hasacquired the property attached under sub-section (1) ofSection 5 of the Act, and only thereupon, he is entitled toissue show cause notice as to why all or any of theproperties should not be declared to be the propertiesinvolved in money-laundering and confiscated by theCentral Government.

17. Having regard to the above said provisions, wehave also carefully perused the order passed by the 1[st]appellant-authority and the consequential notice issuedby the adjudicating authority. In this appeal, mainly, it iscontended by Sri Rajeev Avasthi, learned counselappearing for the 1[st] appellant that the reasons recordedby the learned Single Judge are sufficient for issuance ofattachment order and the notice issued by theadjudicating authority is only a notice prepared as per theRegulations framed under the Act. It is further contendedthat at this stage, there is no reason for the 1[st]respondent/writ petitioner to approach this Court, insteadhe ought to have filed reply to the show cause noticebefore the adjudicating authority. It is submitted that even after adjudication by the adjudicating authority, there isremedy of appeal before the appellate Tribunal and furtherappeal to this Court, and in that view of the matter, there isno justifiable reason for suspending the proceedings asordered by the learned Single Judge. The learnedcounsel took us to the letter dated 02.05.2013, addressedby the 1[st] respondent-Company to IDBI bank. Referringto the same, it is submitted that it is manifest from suchletter that the 1[st] respondent is trying to transfer theamounts which were lying in the form of deposits.

18. On the other hand, it is submitted by Sri S.Ravi,learned Senior Counsel appearing for the 1[st] respondentthat the 1[st] respondent is a Company which is a victim offraud and no proceedings can lie under the provisions ofthe Prevention of Money Laundering Act, 2002 againstthe victims of fraud. It is submitted that in view of thebackground, steps taken by Government of India andvarious orders passed by the Company Law Board, theproceedings under the Act itself are initiatedmisconstruing various provisions of the Act, and by nostretch of imagination, the money which is infused by thenew management can be construed as proceeds ofCrime. It is contended by the learned counsel that whenthe nominees of Government of India have come on theBoard of the Company, there was no money at all in theCompany and in view of urgent need to run the Company

on proper lines, several immediate remedial measures aretaken pursuant to orders passed by the Company LawBoard. It is submitted that in the order dated 19.02.2009,the Company Law Board, in the interest of Company, itsemployees and in larger public interest, found that furtherinduction of long term finances through induction of astrategic investor is necessary and accordingly authorizedthe Board to amend the capital clause of Memorandum ofAssociation to increase the authorized equity sharecapital of the Company from Rs.160 Crores comprising of80 Crores equity shares of Rs.2 each to Rs.280 Crorescomprising of 140 Crores equity shares of Rs.2 each. The Board is also authorized to make preferentialallotment of equity shares at par or at a premium and toinduct a strategic investor through the process of selectionbeing transparent, open and by way of competitive pricebid auction overseen by a retired Judge of the SupremeCourt or a former Chief Justice of India. Accordingly,under the supervision of former Chief Justice of IndiaHon’ble Sri Justice S.P.Barucha, the investor wasselected and it is also certified that such selection wastransparent and fair by none less than the former ChiefJustice of India. As such, the new management hastaken steps to bring money and such money cannot beconstrued as proceeds of Crime within the meaning ofvarious provisions of the Act. It is further submitted thatthe 1[st] respondent/Company is not shown as accused even in the report filed by the CBI under Section 173 ofCr.P.C., so as to proceed against it. It is furthersubmitted that inspite of the mandatory procedureprescribed under the law, proceedings are initiated andattachment orders are passed in a mechanical manner,contrary to the provisions under Sections 5(1)(c) and 8(1)of the Prevention of Money Laundering Act. Further, onthe letter dated 02.05.2013, it is submitted by the learnedcounsel that said letter was addressed to IDBI, requestingto extend the competitive rate of interest at the rate of 9 or9.1% on the deposits lying with it, when the said Bank wasoffering only 7%, as such, basing on the said letter, it isnot open to the appellants to plead that steps are takeneither to conceal or transfer the property within themeaning of Section 5(1)(c) of the Act.

19. On behalf of the impleaded respondent, it iscontended by learned counsel Sri Avinash Desai thatEkadanta Greenfields Private Limited is one of theunsecured creditors of M/s.Satyam Computer ServicesLimited, which owes an amount of Rs.18,58,00,000/- andtheir claim is also pending consideration before the Courtof I-Additional Civil Judge, Secunderabad. It is submittedthat the provisional attachment affected thecreditworthiness of the impleaded Company and theamounts sought to be attached include the money givenas a loan by the impleaded Company to M/s.Satyam Computer Services Limited.

20. On a perusal of the various orders passed by theCompany Law Board, it is clear that once the Chairman ofthe erstwhile management Sri B.Ramalinga Raju hasaddressed the letter dated 07.01.2009 to the Board ofDirectors, SEBI and Stock Exchanges, admitting certainillegalities in the functioning of the Company, immediately,Government of India has jumped into picture and takensteps, and at its instance, the Company Law Board haspassed orders suspending the Board of Directors, andsecondly, Government of India was directed to nominateeminent persons on the Board of the Company. Onfurther application by the Company, the Board with newmanagement was permitted to select a strategic investorby international bidding, which was undertaken under thesupervision of former Chief Justice of India Hon’ble SriJustice S.P.Barucha and that is how the investor hascome into picture.

21. During the course of hearing, it is fairly admitted bythe learned counsel for 1[st] appellant-Directorate that thedeposits under attachment were made subsequent toinduction of the investor, however, it is submitted that anamount of Rs.822 Crores has been layered and finallyparked with the 1[st] respondent/Company by the 34 frontCompanies and these funds were later used by the 1[st]

respondent/Company for meeting the day-to-dayexpenses like payment of salaries etc., as such, the saidmoney constitutes proceeds of Crime within the meaningof Section 2(1)(u) of Prevention of Money Laundering Act,2002. We have also perused the provision under Section2(1)(u) and there is no doubt that if proceeds of Crime areparked, even such money can be dealt with under theprovisions of the Act, but in view of the peculiar facts andcircumstances of the case and various steps taken by theUnion of India itself in the interests of employees,shareholders and its business which is spread-over about60 countries in the world, can this money be treatedas Crime proceeds or not, is doubtful, which is tobe decided at the time of final disposal of writ petition. It isalso to be noticed that the 1[st] respondent/Company is notshown as accused in the final report and all theallegations are made against the individuals who wereheading and managing its affairs then. Further, from aperusal of the provisions under Sections 5(1)(c) and 8(1)of the Act, it is clear that unless there is material to showthat such property/money is likely to be concealed ortransferred in any manner which may result in frustratingthe proceedings relating to confiscation of such proceedsof Crime, prima facie, we are of the view that suchattachment runs contra to the language of the saidSection itself. As rightly recorded by the learned SingleJudge, except reproducing the language of Sections 5(1)

(c) and 8(1) of the Act, the provisional attachment orderdoes not contain any independent material on the basis ofwhich the competent authority has arrived at suchconclusion. Even the letter which is addressed by the 1[st]respondent/Company to IDBI also makes it clear that suchletter is only a request made by the 1[st]respondent/Company claiming competitive rate of interestbetween 9 and 9.1%, and hence, basing on the said letter,it cannot be said that steps were taken to transfer themoney. It is also to be noticed that at first instance, ordersare passed by the 1[st] appellant/Directorate in the form ofadministrative instructions to the 1[st] respondent/Companyon 10.04.2009 and they have obeyed those instructions,and in the absence of violation of such instructions, thereis no reason to pass the order of attachment underSection 5(5) of the Act and also for issuing further noticeunder Section 8(1) of the Act by the adjudicatingauthority. It is also brought to our notice that the frontCompanies have already instituted legal proceedings torecover the so-called loans advanced by them to the 1[st]respondent/Company and the 1[st] respondent/Company iscontesting the same.

22. Although it is the case of appellants that there isalternative remedy for the 1[st] respondent/Company tosend reply to the adjudicating authority by raising such objections, but, as one of the appellants itself is theadjudicating authority, who has indicated his mind that thedeposits ordered to be attached are proceeds of crime,we are of the view that there is no reason to drivethe 1[st] respondent/Company at this stage,to appear before the adjudicating authority.

23. So far as the claim of the impleadedrespondent/Ekadanta Greenfields Private Limited isconcerned, their claim for recovery of loan alleged to havelent to M/s.Satyam Computer Services Limited is pendingadjudication before the Court of I-Additional Civil Judge,Secunderabad, as such, the claim of such Companycannot be gone into in this appeal.

24. Though certain authorities were relied on by thelearned Senior Counsel Sri S.Ravi, as the writ petition is tobe disposed of by the learned Single Judge and as thisappeal is directed against the interlocutory orders passedin W.P.M.P.No.47572 of 2012, we are of the view that it isnot necessary to go into details of such judgments in thisappeal. Further, as interim orders are granted by thelearned Single Judge as early as on 11.12.2012, and inthis appeal, as no interim orders are granted in favour ofthe appellant, we feel that balance of convenience also liein continuing the interim orders passed by the learnedSingle Judge, till the disposal of writ petition.

25. For the aforesaid reasons, this writ appeal is liableto be dismissed and it is accordingly dismissed. No orderas to costs.

Miscellaneous applications pending, if any, shallstand closed.

______________________

R. SUBHASH REDDY, J

__________________________

A.SHANKAR

NARAYANA, J

31[st] December 2014

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