Tribunal releases mortgaged property from attachment, upholds bank's right to recover dues. SARFAESI Act and RDDB Act precedence affirmed.

The Tribunal set aside the Provisional Attachment Order and the confirmation by the Adjudicating Authority, releasing the mortgaged property from attachment. The decision emphasized the bank's right to recover its dues, highlighting that the property was not derived from criminal activity and was mortgaged before the alleged offence. The Tribunal reinforced the precedence of SARFAESI Act and RDDB Act over PMLA in cases involving bona fide mortgagees like the Appellant Bank.

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Issues Involved:
1. Validity of the Provisional Attachment Order under PMLA.
2. Conflict between PMLA and other laws like SARFAESI Act, RDDB Act, and Insolvency & Bankruptcy Code.
3. Rights of the Appellant Bank as a bona fide mortgagee.

Detailed Analysis:

1. Validity of the Provisional Attachment Order under PMLA:
The Appellant Bank challenged the Provisional Attachment Order dated 29.06.2017 issued by the Directorate of Enforcement (ED) and the subsequent confirmation by the Adjudicating Authority on 20.12.2017. The property in question was mortgaged to the Appellant Bank before the alleged offence date, thus it could not be considered "proceeds of crime." The Tribunal noted that the property was mortgaged in 2009 and the alleged offence occurred in 2013, making it clear that the property was not derived from criminal activity. Therefore, the attachment was deemed inappropriate.

2. Conflict between PMLA and other laws like SARFAESI Act, RDDB Act, and Insolvency & Bankruptcy Code:
The Tribunal examined the interplay between PMLA and other laws, specifically the SARFAESI Act, RDDB Act, and Insolvency & Bankruptcy Code. It was argued that the amendments to SARFAESI Act and RDDB Act in 2016, which give priority to secured creditors, should prevail over PMLA. The Tribunal agreed, stating that the amendments were designed to facilitate the recovery of debts by secured creditors, which include banks. The Tribunal emphasized that the properties in question were not acquired from the proceeds of crime and were mortgaged to the bank before the alleged criminal activity. Hence, the provisions of SARFAESI Act and RDDB Act should take precedence.

3. Rights of the Appellant Bank as a bona fide mortgagee:
The Tribunal recognized the Appellant Bank as a bona fide mortgagee, entitled to recover its dues by selling the mortgaged property. The bank had classified the borrower's account as a Non-Performing Asset (NPA) and initiated recovery proceedings under SARFAESI Act and RDDB Act. The Tribunal highlighted that the bank's right to the property could not be prejudiced by the alleged offences committed by the borrower. The Tribunal also noted that the bank had initiated Corporate Insolvency Resolution Process against the borrower, which was admitted by NCLT, and the moratorium was in effect. The Tribunal concluded that the bank's right to recover the public money should not be hindered by the attachment under PMLA.

Conclusion:
The Tribunal set aside the Provisional Attachment Order and the confirmation by the Adjudicating Authority, releasing the mortgaged property from attachment. The Tribunal emphasized that the bank's right to recover its dues should not be impeded, especially when the property in question was not derived from criminal activity and was mortgaged before the alleged offence. The Tribunal's decision reinforced the precedence of SARFAESI Act and RDDB Act over PMLA in cases involving bona fide mortgagees like the Appellant Bank.

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