Karnataka High Court Dismisses JSW Steel's Plea Over PMLA Attachment Linked To Alleged Illegal Iron Ore Transactions

The Karnataka High Court has dismissed JSW Steel's challenge to a PMLA Appellate Tribunal order concerning the attachment of its bank accounts totalling ₹24.37 crore over alleged proceeds from illegally mined iron ore supplied to the company.

The Court held that JSW had been permitted to raise all factual and legal submissions before the Tribunal and therefore its grievance that the matter should have been remanded was untenable.

A division bench of Justices D.K. Singh and T.M. Nadaf said that the writ petitions were not maintainable as the appeals before the Appellate Tribunal were still pending and JSW had been given an opportunity to make all submissions on facts and law.

"Therefore, we are of the view that when the petitioner has been permitted to make all submissions on facts and law by the Appellate Tribunal, the grievance of the petitioner that the Appellate Tribunal ought to have remanded the matter back at the threshold stage is wholly untenable. Therefore, the writ petitions are not maintainable and are liable to be dismissed on this ground alone.", the Court said. 

The case arose from a CBI FIR registered on October 1, 2011, against G. Janardhana Reddy, G. Lakshmi Aruna and Associated Mining Company, concerning alleged illegal iron ore mining and related offences.

The ED registered an ECIR on September 25, 2012, alleging that 1,84,992 MT of illegally extracted iron ore was supplied to JSW Steel Ltd. and that ₹33.80 crore payable by JSW Steel to the erstwhile partners of Associated Mining Company represented proceeds of crime. The ED provisionally attached JSW Steel's bank accounts containing ₹24.37 crore on March 27, 2015.

The Adjudicating Authority confirmed the attachment in April 2021. 

Before the High Court, JSW argued that denial of consideration of its written submissions violated natural justice and that the defect could not be cured at the appellate stage. The ED opposed the pleas, contending that the appeals were pending and JSW could raise all its contentions before the Tribunal.

The Court agreed with the contentions of the ED. It said that natural justice does not require an authority to reproduce or expressly deal with every submission, so long as the affected party receives a real and effective opportunity to present its defence.

"The principle of natural justice does not invariably require a separate right to file synopsis or written submissions/arguments nor does it require the Court/Authority to reproduce or expressly deal with every submission. The essential requirement is that the affected person must receive a real and effective opportunity to know the case against him and to present the defence in a manner appropriate to the statutory scheme and circumstances."

It further held that merely failing to refer to every submission in the synopsis did not amount to denial of natural justice, particularly when JSW had already filed its reply and was heard.

The Court found that JSW had suffered no prejudice as the appeals remained pending and the Tribunal had permitted it to raise all issues. It therefore held that the writ petitions could not be maintained at that stage.

The Court also rejected JSW Steel's challenge at the threshold, noting that the High Court and Supreme Court had earlier declined to interfere while the statutory appeals remained pending, and termed the present writ petitions an abuse of the process of the Court.

The writ petitions were accordingly dismissed without costs.

For Petitioner: Senior Advocate Gopal Jain, Advocate Aditya Narayan

For Respondent: Advocates Anuparna Bordoloi, Dhanush M, Ajaypal Singh