The company has been barred from using the money to pay royalty to companies outside India.
The Karnataka High Court on Monday extended the stay on the Enforcement Directorate's (ED) order of freezing Rs 5,551 crore in the bank accounts of Xiaomi India.
Justice S G Pandit extended the stay till June 1, with the hearing of the case posted to that day.
The ED froze Xiaomi's accounts on April 29 alleging that it has violated the Foreign Exchange Management Act (FEMA) by illegally transferring money abroad to three companies under the guise of royalty payments.
In an interim order on May 5, a vacation bench of the High Court stayed this order.
"Operation of the order is stayed subject to the condition that petitioners will operate the bank accounts which are seized only for the purpose of meeting the expenses for carrying out the day-to-day activities of the company," the HC said in its interim order on May 5.
Subsequently on May 12, the HC modified its interim order and allowed the company to draw overdraft from the banks to meet these expenses. However, on both the occasions, the company was expressly barred from using the money to pay royalty to companies outside India.
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