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Synopsis

The Delhi High Court on Wednesday directed the Enforcement Directorate to restrain from taking further steps under Section 8 of the Prevention of Money Laundering Act, 2002 against Rana Ayub in a money laundering case.

A bench of Justice Yashwant Varma has further restrained Ayyub from disposing off or creating any third party rights or encumbering the property which forms subject matter of the provisional order of attachment.

The order has been passed in a plea before the Delhi High Court against the attachment of funds by the Enforcement Directorate.

The plea stated that the provisional attachment order dated February 4, 2022, lapsed and ceased to exist after 180 days, and the proceedings before the Adjudicating Authority, Prevention of Money Laundering Act (PMLA), 2002, are no longer maintainable because the authority has been rendered functus officio.

The High Court while relying on the judgment in Vikas WSP and Others vs. Directorate Enforcement and Another, opined that the Court has clearly held that the Adjudicating Authority would stand rendered as functus officio, once the period of 180 days expires.

Plea further stated that proceedings before the Adjudicating Authority after 180 days from the date of Provisional Attachment are wholly without jurisdiction, and thus the petitioner seeks to invoke the writ remedy under Article 226 of the Indian Constitution.

In February, the Enforcement Directorate attached Ayyub's assets worth Rs 1.77 crore in connection with alleged irregularities in the collection of charitable funds for COVID relief work.

According to the ED, the investigations established that the funds were raised in the name of charity in a completely planned and systematic manner and that the funds were not used entirely for the purpose for which they were raised.

ED stated that the FIR was filed in response to a complaint filed by Vikas Sankrityayan of Ghaziabad, Uttar Pradesh, on August 28, 2021.

ED further stated that the aforementioned FIR revealed that Ayyub raised huge amounts in crores via the 'Ketto' platform (an online crowdfunding platform) in three campaigns, namely Funds for slum dwellers and farmers during April-May 2020, Relief work for Assam, Bihar, and Maharashtra during June-September 2020, and Help for Covid-19 impacted people in India during May-June 2021.

In April, a bench of Justice Chandra Dhari Singh of the Delhi High Court granted Ayyub permission to travel abroad stating that there is no compelling reason to believe that she will not appear before the Investigation Agency, and thus no case was made out for issuing the impugned Lookout Circular (LOC).

Case Title: Rana Ayub Vs. Directorate of Enforcement