The Karnataka High Court has refused to quash Enforcement Directorate (ED) proceedings and its provisional attachment order against JSW Steel for allegedly having procured illegally mined iron ore [JSW Steel v. Deputy Director, Directorate of Enforcement].
A Bench of Justices DK Singh and TM Nadaf said that JSW's quashing petition was a gross abuse of the process of the Court, since the Supreme Court had refused to entertain the company's appeal against the ED's provisional attachment order.
The Court further said the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) had not violated the principles of natural justice in refusing to send the case back to the Adjudicating Authority.
"The very fact that the Appellate Tribunal has declined to remand the case on the alleged violation of natural justice would not justify interference under Articles 226 and 227 of the Constitution of India or under Section 482 of Cr.P.C."
The case stems from a 2011 first information report (FIR) registered by the Central Bureau of Investigation (CBI), which accused partners of Associated Mining Company, G Janardhana Reddy and G Lakshmi Aruna of the offences of 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.
They were also accused of prohibited acts under the Indian Forest Act, 1927, the Mines and Mineral (Development and Regulation) Act, 1957 and the offence of criminal misconduct under the Prevention of Corruption Act, 1988.
Reddy and Aruna were partners in M/s Associated Mining Company, which had allegedly undertaken illegal mining of iron ore from 2009-2012 from areas that were not leased to them.
They then supplied JSW Steel with 1,84,992 metric tons of the illegally extracted iron ore. It was alleged that JSW Steel owed them an amount of ₹33.80 crore for the iron ore supplied.
The ED then attached JSW Steel's bank accounts totaling ₹24.37 crore through a provisional attachment order and forwarded the same to the PMLA Adjudicating Authority.
The PMLA Adjudicating Authority confirmed the ED's attachment order and said that the Deputy Director, ED has shown reasonable belief that Associated Mining Company had shown ₹33.80 crore owed to it by JSW Steel.
JSW Steel challenged the PMLA Adjudicating Authority's order before an Appellate Tribunal in 2024. It submitted that the matter had to be sent back to the PMLA Adjudicating Authority since it had not taken notice of the company's written submissions.
An appeal to the Supreme Court also proved unfruitful, as it upheld the PMLA Adjudicating Authority's order.
The High Court dismissed the writ petition stating that JSW Steel had made all submissions based on fact and law before the Appellate Tribunal and could not ask for the matter to be sent back to the PMLA Adjudicating Authority.
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