Can TMC Use Frozen Bank Funds? Supreme Court Seeks ED's Stand On Party Expenses

The Bench of Justices M.M. Sundresh and P.B. Varale asked the ED whether some amount could be released in favour of the Calcutta High Court-appointed Special Officer to enable the political party to meet its routine operational expenses.

Additional Solicitor General S.V. Raju, appearing for the ED, sought time to obtain instructions on the proposal. The matter has now been listed for further hearing on August 11.

The appeal challenges the Calcutta High Court's July 20 order refusing interim relief to the Mamata Banerjee-led faction of the TMC against the freezing of three bank accounts by the ED.

At the outset, ASG Raju sought time to file a rejoinder, stating that the respondents' reply had not been served on him.

Senior Advocate Kapil Sibal, appearing for AITMC, disputed the submission but did not oppose the request. "I know it's an interim order. Why do you think I'm here? The allegation concerns ₹160 crore," Sibal submitted while urging the Court to examine the ED's allegations.

Justice Sundresh, however, indicated that the Bench was not inclined to delve into the merits at the interim stage.

"If we decide this now, what will survive in the main matter? Both sides should cooperate and finish the case," the Bench observed.

Sibal argued that the High Court's order was "factually incorrect" and submitted that the freezing of the accounts had paralysed the party's functioning.

"Show us even a single transaction! The accounts are frozen. What is he saying? I can't even pay my employees. Kindly see the consequences," Sibal argued after the ED claimed that money continued to flow through the accounts.

Defending the agency's action, ASG Raju submitted that the Prevention of Money Laundering Act was intended not only to punish money laundering but also to prevent it.

"The Prevention of Money Laundering Act is also meant to prevent further laundering. Money continues to flow through these accounts every day," he argued, adding that the investigation was still underway.

Questioning both sides, Justice Sundresh remarked, "What exactly is your alleged proceeds of crime, and what relief are you seeking? The allegation is of ₹160 crore, while they say the money is in the hands of the Administrator."

Raju further informed the Court that not all of the party's accounts had been frozen.

"Some of the AITMC bank accounts have not been frozen," he submitted.

The Bench was informed that the Calcutta High Court had appointed a former High Court judge as a Special Officer to oversee the operation of the accounts. It was in this context that the Supreme Court proposed releasing a limited amount of funds through the Special Officer for the party's day-to-day functioning.

The ED agreed to seek instructions on the proposal, following which the Bench adjourned the matter to August 11.

The ED had frozen the three bank accounts, collectively holding approximately ₹440.42 crore, in connection with a money laundering investigation arising out of a West Bengal Police FIR alleging dishonest financial transactions and unlawful routing of funds through party accounts.

According to the agency, around ₹160 crore was transferred from TMC accounts to Carewell Aviation India Pvt. Ltd. and its related entity between April 2023 and June 2026. The ED alleges that a substantial portion of the funds was subsequently routed to another entity, with approximately ₹112 crore allegedly used to purchase an Embraer Legacy 600 business jet and an AgustaWestland 109SP helicopter.

The Calcutta High Court had earlier observed that apart from the three frozen accounts, the party continued to operate 36 other bank accounts containing approximately ₹164 crore, and had declined to grant interim relief. The Mamata Banerjee-led faction thereafter approached the Supreme Court challenging both the freezing of the accounts and the initiation of proceedings under the Enforcement Case Information Report (ECIR).

Case Title: All India Trinamool Congress v. Union of India