Tribunal grants appellant escrow access, upholds recovery rights from attached properties.

The Tribunal allowed the appellant to operate the escrow accounts and withdraw amounts owed by the borrowers, modifying the impugned order. The attachment of immovable properties shall continue until the decision of the appeals filed by the borrowers. The appellant's entitlement to recover its dues from the attached properties was upheld, recognizing its status as a bona fide lender.

---

---

Issues Involved:
1. Legitimacy of the Provisional Attachment Order (PAO) dated 29.06.2016.
2. Validity of the loans sanctioned by the appellant.
3. Connection of the attached properties with the alleged money laundering activities.
4. Rights of the appellant as a bona fide lender.
5. Adherence to due process by the appellant before sanctioning loans.
6. Entitlement of the appellant to recover dues from the attached properties.
7. Application of the Prevention of Money Laundering Act (PMLA) provisions.

Issue-wise Detailed Analysis:

1. Legitimacy of the Provisional Attachment Order (PAO) dated 29.06.2016:
The appeal challenges the Impugned Order dated 21.03.2017, confirming the PAO issued by the Enforcement Directorate. The PAO attached properties mortgaged to the appellant, Aditya Birla Finance Ltd., which were acquired by Defendants No. 4, 5, and 6 in 2005, well before the alleged fraudulent activities occurred between 2007 and 2013.

2. Validity of the loans sanctioned by the appellant:
On 28.10.2014, the appellant sanctioned three loans totaling Rs. 46 Crores to three companies against properties acquired in 2005. The appellant followed due diligence by obtaining necessary documents and security before approving the loans.

3. Connection of the attached properties with the alleged money laundering activities:
The properties attached were acquired in 2005, predating the alleged fraudulent activities. The respondent did not present evidence connecting the appellant or its borrowers to the siphoning of funds by Tayal Group of Companies. The rent in the escrow accounts, which is the subject of attachment, does not come from any accused in the FIRs.

4. Rights of the appellant as a bona fide lender:
The appellant, a bona fide lender, followed due process and exercised diligence in sanctioning loans. The properties were mortgaged to the appellant by virtue of assignment of loan, and the appellant is entitled to recover its dues from these properties.

5. Adherence to due process by the appellant before sanctioning loans:
The appellant adhered to due process by obtaining various documents such as acceptance of sanction letters, loan agreements, promissory notes, board resolutions, and security documents, including title searches and legal opinions, before sanctioning the loans.

6. Entitlement of the appellant to recover dues from the attached properties:
The Tribunal recognized the appellant's right to recover dues from the attached properties, as these were mortgaged to the appellant before the alleged fraudulent activities occurred. The Tribunal allowed the appellant to operate the escrow accounts and withdraw amounts owed by the borrowers.

7. Application of the Prevention of Money Laundering Act (PMLA) provisions:
The Tribunal referred to Rule 8 of The Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013, which allows a mortgagee bank to retain funds until recovery of dues or final determination by the Special Court. The Tribunal cited previous judgments, emphasizing that properties mortgaged before the alleged fraudulent activities cannot be subjected to attachment under PMLA.

Conclusion:
The Tribunal allowed the appellant to operate the escrow accounts and withdraw amounts owed by the borrowers, modifying the impugned order. The attachment of immovable properties shall continue until the decision of the appeals filed by the borrowers. The appellant's entitlement to recover its dues from the attached properties was upheld, recognizing its status as a bona fide lender.

---