TaxTMI 
TaxTMI 
2019 (4) TMI 152
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.... also executed a registered mortgage of properties on 13.12.2011. (Registered Mortgage deed is Exhibit B (at pages 83 to 112) and supplemental mortgage executed on 23.5.2013 is Exhibit D (at pages 121 to 149). 3. The borrower mortgaged following securities with the appellant bank:- Sr. No. Particulars of the Security Estimated Value of the security in Lakhs 1. Unit No. 905, Jewel World, 175, Kalbadevi Road, Mumbai-2 24.00(as per valuation dt. 25.10.2016) 2. Unit No. 906, Jewel World, 175, Kalbadevi Road, Mumbai-2 349.00(as per valuation dt 25.10.2016) 3. Shop No. 3, Ground floor Nisarg CHS Ltd, AB Road, Vile Parle (West) Mumbai-56 531.48 (as per valuation dated 04.08.2017 4. Shop No. 4, Ground floor Nisarg CHS Ltd, AB Road, Vile Parle (West) Mumbai-56 5. Basement No. 1 Nisarg CHS Ltd, AB Road, Vile Parle (West) Mumbai-56 6. Shop No. 404 and 405, 4^th Floor, Shail's Mall, TPS No. 3, Village Changis-pur, CG Road, Navrangpura, Ahmedabad (Gujarat) 282.60(as per valuation dated 16.03.2017) TOTAL VALUATION 1187.08 Lakhs Besides creation of the simple mortgage, the respective owners of the said properties also ....
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....stration law), pledges and likewise. The bank is entitled to realize the said securities directly without recourse to any court under the SARFAESI Act. 9. The borrower deposited money in his account and purchased gold from the bank in the same manner as before the account becoming NPA and the bank retained 7% of the amount credited for partial liquidation of outstanding. 10. In the meanwhile, the appellant bank was served with a provisional order of attachment by the Deputy Director, DE with respect to above mentioned six properties mortgaged with the appellant bank as security for huge advances. Despite of all information given that the properties mortgaged to the banks as security much before the alleged actions of money laundering cannot be attached, the Ld. Adjudicating Authority has affirmed the order without considering the same. 11. The case of the appellant in the present appeal: - (a). The properties were mortgaged with the appellant bank in 2011 and the crime alleged against the borrowers pertain to the period of demonetization i.e. November-December 2016 therefore the said properties which had been purchased prior to creation of mortgage in 2011 could n....
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....l has perused and examined the material available on records and has also heard the arguments of the learned counsels for both the parties and gone through the written submission filed. 15. The Respondent-Deputy Director is relying upon the non-obstante clause in Section 71 of PMLA to claim priority over their debts due to the Appellant Bank. Section 71 of PMLA reads as under:- "The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force." 16. There is no denial on behalf of respondent that appellant is a Secured Creditor and is entitled to priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or Local Authority. 17. The amended provisions of Section 26E of the SAR-FAESI Act, 2002 as amended by the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 which reads as under:- "26E. Priority to secured creditors. - Notwithstanding anything contained in any other law for the time being in force, after the registration of security i....
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....956 SC 614 - Ramnarayan vs. Simla Banking andIndustrial Company Ltd. (ii) (1977) I SCC 750 - Sarvan Singh vs Kasturi Lal (iii) (1993) 2 SCC 144 = Maharashtra Tubes Ltd. vs State Industrial Investment Corporation of Maharashtra Ltd. (iv) (2000) SCC 406 - Allahabad Bank vs. Canara Bank 23. The Hon'ble Supreme Court in the said case of Solidaire India Ltd. vs. Fair growth Financial Services Ltd. has approved the decision of the Special Court rendered by the Hon'ble Mr. Justice Variava, as he was then of the Bombay High Court reported in (1997) 89 Comp cases 547 clarifying that the non-obstante clause in the later enactment will prevail over the non-obstante clause in the earlier enactment. 24. The following is the relevant portion of the decision of the Special Court, as appearing at Para 10 of the said Supreme Court Judgment:- "Where there are two special statues which contain non-obstante clauses, the later statute must prevail. This is because at the time of enactment of the later statute, the Legislature was aware of the earlier Legislation and its non-obstante clause. If the legislature. still confers the later enactment with a no....
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.... - Deputy Director has no power to attach the property of the mortgagors. 28. The Hon'ble Andhra Pradesh High Court in the case of B. Rama Raju vs. Union of India & Ors. reported in (2011) 164 Comp Cases 149 in which the Hon'ble High Court has held that if the Adjudicating Authority is satisfied as to the bona fide acquisition of property, it should relieve such property from provisional attachment by declining to pass an Order of confirmation of the provisional attachment. 29. The following isthe relevant portion of the Para 103 of the said decision passed by the Hon'ble Andhra Pradesh High Court :- "103. Since proceeds of crime is defined to include the value of any property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence, where a person satisfies the adjudicating authority by relevant material and evidence having a probative value that his acquisition is bona fide, legitimate and for fair market value paid thereof the adjudicating authority must carefully consider the material and evidence on record (including the Reply furnished by a noticee in response to a notice issue under Section 8(1) an....
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....asons to believe that the above mentioned were mortgaged to the Appellant Bank and that the Appellant/SBI had prior charge over the subject matter - 5 properties ;still the Ld. Adjudicating Authority confirmed the provisional attachment order of the respondent no. 1 and thus causing huge loss to the appellant SBI. 60. We also find that the Adjudicating Authority has not examined the law on mortgages and securities. 63. The property of the Appellant bank cannot be attached and confiscated when there is no illegality or unlawfulness in the title of the appellant. 64. The respondent has no lien over the said properties as the appellant banks are now the legal transferees of the said properties. 65. From the entire gamut of the matter, we are of the view that there is no nexus whatsoever between the alleged crime and the two banks who are mortgagees of all the properties which were purchased before sanctioning the loan. Thus no case of money laundering is made out against banks who have sanctioned the amount which is untainted and pure money. They have priority as secured creditors to recover the loan amount/debts by sale of assets over which securit....