Supreme Court Refuses Relief To Mamata's TMC Faction On ₹804-Crore Account Freeze

The Bench of Justices M.M. Sundresh and P.B. Varale held that it would not exercise its discretionary jurisdiction under Article 136 of the Constitution, noting that the Election Commission has frozen the party's symbol and that the larger question of which faction is entitled to the funds remains pending adjudication. The Bench said: "We refrain from going into the merits. We are not inclined to exercise our jurisdiction under Article 136. We request high court to expedite the hearing."

The Calcutta High Court had on August 27 declined to allow the Mamata-led faction to operate the four accounts; maintained with a public sector bank, Indian Bank; observing that doing so would undermine its earlier arrangement allowing the party to meet its day-to-day expenses. During the hearing, it emerged that the Supreme Court had previously directed the Election Commission to decide which faction constitutes the "real" AITC, and that the Calcutta High Court had, pending that determination, appointed a Special Officer to oversee the party's affairs until September.

Solicitor General Tushar Mehta, appearing for the State of West Bengal, told the Court that a separate complaint had surfaced during this period: that a personal assistant to one of the party's office-bearers had deposited Rs 35 crore in cash into an account, following which the accounts were frozen and an investigation was opened. He said one individual, Sumit Roy, has filed an anticipatory bail plea before the Supreme Court in connection with the matter, and that there is also an allegation of converting government land into private land for sale during a previous government's tenure. Mehta noted that the High Court had indicated the matter would be taken up after Durga Puja, while submitting that this Court could consider preponing it.

Senior Advocate Abhishek Manu Singhvi, appearing for the AITC faction, argued that freezing all of the party's accounts was an effective way of halting its political activity altogether. He told the Court: "If the police can successfully freeze all the accounts, that is the best way of stopping political activities. There is no opposition except me."

Singhvi submitted that the party's published audited accounts showed a minimum annual expenditure of Rs 212 crore; roughly Rs 12.15 crore a month for day-to-day running costs alone, excluding political expenses and pointed out that a by-election was also approaching. He also argued: "Every day, a political party's oxygen is paralysed. The High Court has said it will hear in due course. Nothing is served by that because I am paralysed. In a democracy, to paralyse a political party by the State police..."

He further argued that the accounts had been frozen by the State police without any judicial oversight, contrasting this with the safeguard built into ordinary criminal procedure, "Section 107 of BNSS puts a filter of a Magistrate. There is a judicial element. Here, there is no judicial element, no Magistrate. No ED. It is a police force of the State."

Singhvi described the AITC as the third-largest party in the country, with offices in six states, national and state media teams, and regular party meetings held across the country. He submitted that the party had already scaled its monthly expenditure down from Rs 19 crore to a bare minimum of Rs 12.15 crore a month after the declaration of results, and that the present plea sought additional expenditure over and above the day-to-day amount the High Court had already permitted.

Senior Advocate K. Parameshwar, appearing on the other side, pointed to an Election Commission order of September 17 in the course of the arguments. Singhvi responded that the September 17 order concerned only the symbol dispute and said nothing about the bank accounts, and separately objected to the Solicitor General's reference to money laundering, submitting that it was not the subject matter of the case before the Court.

He also drew a distinction on the scope of the plea itself, "Earlier orders concerned HDFC bank accounts. Today, we are dealing with Indian Bank accounts."

In its order, the Bench refused to intervene directly to the pending symbol dispute, holding that since the Election Commission has frozen the party's symbols, the larger question of who is entitled to operate the accounts has to be decided first; and that question remains before the Calcutta High Court.

The Supreme Court accordingly declined to disturb the High Court's order, while asking the High Court to expedite its hearing of the matter.