Calcutta HC says no grounds to freeze TMC accounts, pulls up Bengal Police

A day after the Enforcement Directorate (ED) froze several bank accounts operated by the Mamata Banerjee-led Trinamool Congress (TMC), the Calcutta High Court on Thursday, 9 July allowed the party to operate three accounts that had been frozen by the West Bengal Police, to meet its day-to-day expenses.

Stating that it found no sufficient grounds to justify the freezing of the TMC bank accounts, the high court allowed the party to operate the three accounts until 30 September, when the matter will next be heard, with former Calcutta High Court judge Subrata Talukdar to act as special officer to regulate the operation of the accounts.

The court also pulled up West Bengal Police for acting in haste on complaints filed by rebel Trinamool MLAs. "This complaint was lodged on 18 June and the accounts were seized the very next day on 19 June… as if the complaint was lodged only to seize these accounts. What was the material on the 18th… why is everything happening with lightning speed? When a poor citizen approaches a police station, the police rarely takes action at such speed; and yet in this case, a complaint is lodged and immediately the accounts are frozen?" asked Justice Saugata Bhattacharya.

The court also questioned the conduct of the rebel TMC MLAs, who are the complainants in the case. It observed that before the Assembly election results were declared on 4 May, the complainants had themselves utilised funds from the same accounts while contesting as TMC candidates, but alleged that tainted money had been deposited in the accounts only after they joined another faction.

Solicitor-general Tushar Mehta flew down from New Delhi to defend the state police's action, while senior advocate Abhishek Manu Singhvi represented the TMC.

"If you can cripple a political party like this then it erodes the level playing field," Singhvi argued. Referring to the speed with which the action was taken, he quipped, "I wish things in this country worked so fast in all cases."

The complaint, he pointed out, was "vague" and devoid of any specific allegations linking the accounts to the proceeds of crime. The debit freeze had paralysed the functioning of a recognised political party, he submitted.

Appearing for the state police, Mehta defended the action and argued that Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) empowered the police to seize property during an investigation. He contended that freezing the accounts was necessary to prevent the alleged proceeds of crime from being dissipated. If the court allowed one faction to operate the accounts, it would amount to recognising that faction as the real TMC, he argued.

The court remained unimpressed. "You were a member of TMC, you fought the election… the timing... your conduct doesn't inspire confidence at this stage," it observed.

The court further held that it was for the Election Commission of India to recognise a political party. Once the ECI gave its ruling, the petitioners would be free to seek a modification of the court's order.

The TMC's bank accounts were also frozen on Wednesday by the ED after it conducted searches to find evidence of the routing of "suspicious funds" into the party's accounts. This is the first time the ED has investigated the funding of a political party. While the Aam Aadmi Party's accounts had previously come under scrutiny, that probe formed part of the investigation into the alleged Delhi liquor policy scam.

The TMC, in an earlier statement, had said: 'All funds held in the party's bank accounts have been fully and transparently disclosed. The party has duly reported all donation transactions to the Election Commission of India (ECI) and the Income Tax Department. These disclosures are published annually on the ECI's website and are available in the public domain. The details relating to electoral bonds are already available with the Government of India, as the bonds were issued by the State Bank of India (SBI) and subsequently submitted to the Hon'ble Supreme Court of India.'

Condemning the ED's action as politically motivated and illegal, the party said it amounted to an assault on the multi-party system and the level playing field essential to a democracy. It also posed what it called the 'unspoken question': whether the ED would follow the same principles and examine the BJP's funding.