ZO Pvt. Ltd Vs Directorate of Enforcement (Karnataka High Court)
The petition was heard by the Karnataka High Court in a matter concerning a request for interim relief against freezing of a bank account. The petitioner sought permission to operate the frozen account for limited purposes, including disbursement of salaries and meeting employment-related and statutory liabilities, based on two Board Resolutions placed on record on 19.01.2026.
Senior counsel for the petitioner submitted that the account freeze was ordered by the respondent authority under Section 17(1A) of the Prevention of Money-Laundering Act, 2002, without justification. It was contended that the petitioner had passed Board Resolutions to assist its holding company in managing day-to-day business operations, including payment of salaries, wages, and other employment-related obligations. The submission emphasized that permitting use of the frozen account for these limited purposes would not result in any further request by the holding company for similar relief.
The standing counsel for the respondent stated that, based on tentative instructions, the respondent had not yet completed pleadings or taken a final position on the petitioner’s request for interim permission to operate the account. The respondent had not provided a definitive response on whether such interim relief could be granted.
