A Curios Case Of ED's 'Mistaken Identity'
New Delhi: This is the story of a mistaken identity and how it devastated a middle-class family’s source of income and put them in mental distress. In January 2022, for Bhavya Singh (46), who runs a retail garment shop named ‘Kudos’ at Shiv Shakti Plaza in Delhi’s Palam with her husband Amit Kumar Singh (50), managing the finances turned topsy-turvy. They came to an utter shock that the current account of the ICICI Bank linked to the shop has been frozen, citing ‘unethical activities/transactions.’ Thus, Bhavya, the proprietor of the shop, could not withdraw or transfer any amount from the account, which affected her business transactions as well as the payment of salaries.
When they enquired about the issue with their local ICICI Bank branch, they came across another shocking news: the freeze was following a directive from the Enforcement Directorate (ED), adding that it is a confidential matter and refused to disclose further information to the Singhs.
Also Read | Wheth: Shashi Tharoor Finally Found A Solution For A Malayalee Problem
Subsequently, the Delhi couple made months of concurrent correspondence with ICICI Bank, the Reserve Bank of India (RBI), and the ED, but no rectification happened. When they reached out to RBI via email, they responded that the couple’s inquiry does not fall under the jurisdiction of the Ombudsman scheme 2021; hence the petitioner’s grievance cannot be taken for consideration.
Singh’s ‘Kudos’ Versus ‘Kudos Finance and Investments Private Limited’
In response to an email sent by the Singhs, the bank said that account was frozen, “as we have received provisional attachment order no. 02/2022 dated 12.01.2022 from the deputy director, Enforcement Directorate, Hyderabad, issued under section 5(1) of the Prevention of Money Laundering Act 2022 against Kudos Finance and Investments Private Limited and its fintech associates.”
ICICI Response Mail
When the Singhs came to know that the company under ED’s probe is ‘Kudos Finance and Investments Private Limited’, they clarified with the bank that their account is in the name of ‘Kudos.’ But the bank failed to give a satisfactory answer and replied that the federal agency has mentioned the account number of the Singhs in the notice. Amit Singh asked the bank whether it is not aware that not two companies have the same account name.
When the Singhs approached the Directorate of Enforcement in this regard, they did not pay heed to the grievance of the petitioner and replied that the investigation is continuing and they will remove the debit freeze after the investigation is finished. Even when they sought the notice, FIR, or any other provision in which the account has been frozen, the agency failed to provide any satisfactory answer.
The Singhs received another huge blow in November 2022, when they came to know that on October 31, 2022, their hard-earned money of Rs. 1,00,325 had been transferred from a frozen account to the account of the ED without seeking any permission of the petitioner or any prior notice. The Singhs felt cheated by the hand of the government. “Are we criminals? … How can an agency like ED take money?” Amit Singh asks.
Though the Singhs reached out to ICICI Bank and ED, they did not receive any apt response. “Technically, the transfer of money only takes place through an attachment order, but it did not occur in the Singhs’ case,” advocate Anurag Srivastava, who has been representing the Singhs, told Timeline Daily.
Through freezing the account, the cloth business got badly hit. The money that is required for the daily functioning of the business has been heavily affected, and through the illegal action of transferring money, the cloth store became inoperative. The COVID-19 pandemic, its resultant restrictions, and the dismal economy in the country have also added woe to the worry. The shop was then shut forever.
The ‘illicit, unwarranted, shady, and negligible’ act of the RBI, ICICI Bank, and ED has led them to acute financial crisis and mental agony, Singh’s counsel points out. Amit Singh says he has been hospitalised due to health issues because he could not take the stress anymore.
Writ Petition
In March 2024, nearly two years later, the Singhs moved a writ petition in Delhi High Court. In the same month, the Court issued notice after the Singhs’ counsels, Anurag Srivastava and Ashish Dabas, informed the Court that Kudos Finance and Investments Private Limited and Kudos of the Singhs are two separate firms. The Singhs submitted in the court that Kudos Finance is a Pune-based private limited company, and they argued that they have no transaction with the said company, no direct or indirect relation. The only similarity the company has with their small retail shop of clothes is in the first name, i.e., ‘Kudos.’
Also Read | Manipur: JD(U) Withdraws Support To BJP Government
After 10 months, on January 20 (Monday), the probe agency’s standing attorney, Arkaj Kumar, informed the court that it was a case of “mistaken identity.”
Justice Jain, in its order, stated, “According to him (Kumar), the account of one entity known as “KUDOS FINANCE AND INVESTMENT PVT. LTD.” was to be attached/frozen, but because of the similarity in the name and on account of such utter confusion, the account of the petitioner herein has been attached. He submits that he would have no objection if the writ petition is allowed and the account is directed to be defreezed with immediate effect. It is also undertaken that the above-said amount of Rs. 1,00,325/-, which had been transferred from the petitioner’s current account, would be re-transferred to her account within a period of four weeks.”
“With great power comes great responsibility. They (ED) are powerful but not at all responsible. . . . When we moved the writ petition, they should have known they had committed a mistake. Instead of waiting for nearly 10 months for the court order, they should have released the money. If you have made a mistake, there should be an initiative to rectify that. It is a loss to the affected party, for the ‘lawful money’ they have to suffer huge loss even as lawyer fees; at least it needs to be compensated,” Srivastava remarked.
(With inputs from Aishwarya Krishnan)
