Stays attachment order

Justice P.V. Sanjay Kumar of the AP High Court on Tuesday stayed the provisional attachment order passed by the Directorate of Enforcement against movable properties (Rs.822 crore of fixed deposits in banks) of Mahindra Satyam.

The judge was passing interim orders in a writ petition filed by Satyam Computers Private Ltd. and declared that ‘provisional attachment order dated October 18, 2012 and the consequential notice dated October 29 of the Adjudicating Authority under Section 8 (1) of the Act of 2002, were found to be in flagrant disregard of legal provisions and cannot therefore be permitted to operate pending disposal of this writ petition.’

The Directorate of Enforcement, Government of India, Hyderabad Zonal Office, had provisionally attached movable properties held by the petitioner company to the tune of Rs.822.00 crore in the form of fixed deposits in Andhra Bank, ING Vysya Bank, IDBI Bank and Bank of Baroda, under Section 5 of the Prevention of Money-laundering Act, 2002. The directorate had ordered that the monies shall not be transferred, disposed of, removed, parted with or otherwise dealt with in any manner whatsoever until or unless specifically permitted by it.

The directorate issued notice on October 29 asking the petitioner to appear before it in person or through an advocate on December 10 to show cause as to why all or any of the properties provisionally attached should not be declared to be properties involved in money laundering and confiscated by Government of India. This was challenged by the company.