Karnataka High Court rejects JSW Steel’s challenge to ED attachment orders.
Karnataka High Court.
Karnataka High Court JSW Steel ED Attachment Case News: The Karnataka High Court has dismissed a challenge by JSW Steel against Enforcement Directorate (ED) proceedings and a provisional attachment order involving the company’s bank accounts in a case concerning allegedly illegally mined iron ore.
A Bench comprising Justices DK Singh and TM Nadaf said it would not interfere with the matter after noting that both the Supreme Court and the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) had declined to provide the relief sought by JSW Steel.
The Court described the company’s attempt to have the proceedings quashed as a gross abuse of the process of the Court.
How the case began
The dispute traces back to a 2011 FIR registered by the Central Bureau of Investigation (CBI) against partners of Associated Mining Company, including G Janardhana Reddy and G Lakshmi Aruna.
The FIR alleged offences including criminal conspiracy, theft, fraud, mischief causing damage to property, dishonestly receiving stolen property and forgery for the purpose of cheating under the Indian Penal Code, 1860.
The accused also faced allegations under laws governing forests and mining, including the Indian Forest Act, 1927 and the Mines and Mineral (Development and Regulation) Act, 1957, as well as an allegation of criminal misconduct under the Prevention of Corruption Act, 1988.
According to the allegations, Associated Mining Company had undertaken illegal iron ore mining between 2009 and 2012 from areas for which it did not hold mining leases.
The company allegedly supplied 1,84,992 metric tonnes of the extracted iron ore to JSW Steel. The ED case also involved an alleged outstanding amount of ₹33.80 crore that JSW Steel owed to Associated Mining Company for the supplied ore.
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ED attaches JSW Steel bank accounts
During the proceedings, the ED provisionally attached JSW Steel’s bank accounts containing ₹24.37 crore.
The attachment was subsequently placed before the PMLA Adjudicating Authority. The authority confirmed the provisional attachment after finding that the Deputy Director of the ED had demonstrated a reasonable belief concerning the alleged ₹33.80 crore liability to Associated Mining Company.
JSW Steel challenged the Adjudicating Authority’s decision before the PMLA Appellate Tribunal in 2024.
The company argued that the matter should be sent back to the Adjudicating Authority because, according to JSW Steel, the authority had failed to consider its written submissions.
JSW Group.
Why the High Court rejected the challenge
The High Court did not accept that argument as a basis for intervention.
The Bench noted that the Appellate Tribunal had already considered the issue and had declined to remand the matter to the Adjudicating Authority. The Court also observed that JSW Steel had placed its factual and legal submissions before the Appellate Tribunal.
The High Court held that the Tribunal’s refusal to remand the case on the alleged violation of natural justice did not, by itself, justify intervention under Articles 226 and 227 of the Constitution or Section 482 of the Code of Criminal Procedure.
The Court also took note of the fact that the Supreme Court had refused to entertain JSW Steel’s appeal against the provisional attachment order.
In those circumstances, the High Court dismissed the writ petition.
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Advocates appearing in the case
Senior Advocate Gopal Jain and Advocate Aditya Narayan appeared for JSW Steel.
Advocates Anuparna Bordoloi, Dhanush M and Ajaypal Singh appeared for the Enforcement Directorate.
The ruling leaves the attachment proceedings in place, following the earlier decisions of the PMLA authorities and the Supreme Court in the matter.
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