Introduction:

In a significant legal development, the Bombay High Court has provided temporary relief to Bollywood actor Shilpa Shetty and her husband, businessman Raj Kundra, by staying eviction notices issued by the Enforcement Directorate (ED). The eviction notices were related to their properties in Juhu, Mumbai, and a Pune farmhouse as part of an ongoing investigation into an alleged cryptocurrency ponzi scheme dating back to 2018. The court’s ruling temporarily halts the enforcement of these notices until the couple can challenge the provisional attachment of their properties before the appellate authority.

Brief Facts of the Case:

The case stems from the ED’s 2018 investigation into Amit Bharadwaj, the prime accused in a cryptocurrency ponzi scheme that defrauded investors of over ₹6 crores through Bitcoins. Shilpa Shetty and Raj Kundra were implicated as co-accused in the case, with allegations of laundering proceeds of crime.

In April 2024, the ED issued a provisional attachment order against their properties, including their Juhu residence, purchased in 2009 by Raj Kundra’s father, and their Pune farmhouse. Despite responding to the attachment order, the ED served eviction notices on September 27, 2024, demanding the couple vacate the properties. The Kundras approached the Bombay High Court to challenge the eviction, asserting that the ED’s actions were premature and deprived them of their right to appeal.

Arguments by the Petitioners:

Represented by Prashant Patil, the petitioners argued that the ED’s eviction notices were unjust and violated their right to challenge the provisional attachment under the Prevention of Money Laundering Act (PMLA). They emphasized that the properties were purchased legitimately and had no connection to the alleged ponzi scheme. The petitioners claimed that the ED acted recklessly by issuing eviction notices before they could exhaust their legal remedies.

The Kundras highlighted their compliance with the ED’s investigation and pointed out that they had 45 days to challenge the attachment confirmation. The eviction, they argued, would unfairly deprive them of their family homes.

Arguments by the Respondents:

The Enforcement Directorate, represented by its counsel, defended the eviction notices as a lawful consequence of the confirmed attachment. The ED argued that the provisional attachment of the Kundras’ properties was necessary to prevent the dissipation of suspected proceeds of crime. The agency maintained that the eviction notices followed due process, as the confirmation allowed the ED to retain control of the properties until the trial’s conclusion.

While acknowledging the Kundras’ right to appeal, the ED asserted that the attachment was part of a broader investigation and essential to secure the alleged proceeds of crime.

Court’s Judgement:

A division bench led by Justices Revati Mohite-Dere and Prithviraj Chavan granted temporary relief to the petitioners. The court stayed the eviction notices, allowing the couple time to challenge the attachment order before the appellate authority. Justice Mohite-Dere emphasized that the eviction notices should not be enforced while the petitioners pursued their appeal, ensuring their right to due process was protected.

The court directed that the ED’s eviction notices be held in abeyance until the appellate authority decides on the couple’s appeal. Moreover, even if the appeal is denied, the court provided an additional two-week window before the eviction notices could be enforced, giving the Kundras time to seek further legal recourse.

Conclusion:

The Bombay High Court temporarily stayed the eviction of Shilpa Shetty and Raj Kundra, ensuring their right to appeal against the provisional attachment of their properties. The court’s decision balances the enforcement of the law with the petitioners’ right to due process, providing them relief from immediate eviction while allowing the investigation to proceed.