TMC Bank Account Freeze: Supreme Court Asks ED If Limited Funds Can Be Released For Day-To-Day Expenses

The Supreme Court on Monday explored the possibility of allowing the All India Trinamool Congress (TMC) to access a limited portion of its frozen funds to meet its day-to-day expenses.

A bench of Justices M.M. Sundresh and Prasanna B. Varale asked the Enforcement Directorate (ED) whether some amount could be released to the party through Justice (Retd.) Subrata Talukdar, the special officer appointed by the Calcutta High Court, as an interim arrangement until the High court decides on the matter.

Noting that the writ petition is listed before the High Court on August 20, the bench requested the parties to cooperate for its expeditious disposal. The matter will next be heard by the Supreme Court on August 11.

Senior Advocates Kapil Sibal and Menaka Guruswamy, appearing for the AITC, argued that the ED's decision to freeze the party's bank accounts under the Prevention of Money Laundering Act, 2002 (PMLA) was disproportionate and unsupported by the material relied upon during the investigation.

Referring to the complaint and the impugned orders, Sibal submitted that while the ED alleged that around ₹160 crore had been routed through the accounts, it had frozen accounts containing substantially larger amounts.

Reading from the complaint, Sibal argued that even the allegations were tentative in nature.

"It has come to my knowledge... through reliable circumstances and surrounding developments, that certain funds allegedly arising out of illegal activities, including misuse of influence, dishonest financial dealings and suspected unlawful collection of money may have been routed."

Sibal further submitted that the High Court had proceeded on an incorrect factual premise that 36 other accounts containing approximately ₹164 crore remained available to the party. Referring to an additional affidavit and bank communications, he argued that those accounts had also been subjected to a debit freeze.

"These are the very accounts that have been frozen, and the judge says that they are available with me. This is their own document," Sibal submitted.

Sibal further submitted that the party was unable to meet its routine financial obligations.

"I can't pay my employees," he told the bench.

He also argued that if the ED alleged that proceeds of crime had been transferred from one account to another, it could not justify freezing the source account itself.

"If I give money, which are proceeds of crime, to B, B's accounts will be frozen. But they have frozen A's account. How can they do that?" Sibal argued.

Appearing for the ED, Additional Solicitor General S.V. Raju opposed the plea, submitting that the agency's action was aimed at preventing the continued laundering of funds.

"The Money Laundering Act is not only for actual money laundering but prevention of money laundering. We are preventing it... the process of cycling is continuing daily," Raju submitted.

The bench, however, questioned the ED's contention that funds continued to move through the accounts despite the freezing orders.

"The account is frozen. How can you make that statement?" Justice Sundresh asked.

When the ASG reiterated that the investigation was continuing, the bench clarified that it was not examining the merits of the allegations.

"We are not going into the merits of the case," the court observed, adding that the parties would have an opportunity to raise all their contentions before the High Court.

Returning to the issue of interim relief, the bench referred to the Calcutta High Court's earlier order appointing a Special Officer to supervise the operation of certain accounts for the party's day-to-day expenses and suggested that the parties explore whether a limited amount could be released through him until the writ petition is decided.

"We suggest to both sides whether some amount can be released in favour of the administrator... especially when he has been appointed by the High Court," the bench suggested. ED has been given time to take instructions. The matter is listed for next Tuesday.

Background

The matter arose from a complaint lodged by West Bengal MLA Biswanath Das before the Bidhannagar Cyber Crime Police on June 18, 2026 alleging that funds generated through illegal activities, misuse of influence and dishonest financial dealings had been routed through three HDFC Bank accounts.

An FIR was registered on the same day under the Bharatiya Nyaya Sanhita and the Information Technology Act. The ED registered an ECIR on June 23, 2026 and following searches, froze six bank accounts including three HDFC Bank accounts belonging to the AITC on July 7, 2026.

The party contended that the freezing action was arbitrary, mechanically undertaken and unsupported by any identifiable proceeds of crime. It also relied on an earlier July 9, 2026 order of a Coordinate Bench permitting operation of the three accounts through a Special Officer for meeting the party's day-to-day expenses.

The High Court held that it could not examine the legality of the alleged fund transfers at the interim stage and that the petitioners would have an opportunity to raise their objections before the PMLA Adjudicating Authority as well as in the writ proceedings after exchange of affidavits. “This Court did not find any prima facie case and balance of convenience and inconvenience in favour of the petitioners. In view of the above, interim order as prayed for by the petitioners, is refused.”, the Court said.

It further noted that the ED had analysed the accounts and recorded reasons to believe that substantial transfers had been made to various entities, justifying the freezing order under the PMLA.

Click Here To Read/Download Calcutta HC Order