TaxTMI 
TaxTMI 
2021 (1) TMI 68
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....s 1 347/2017 28.10.2017 Shivaji Nagar Police Station, Pune 1. Deepak Sakharam Kulkarni 2. Hemanti Deepak Kulkarni 406, 420, 34 of IPC, Section 3 & 4 of Maharashtra Protection of Interests of Depositors (MPID) Act, 1999 2. 373/2017 09.11.2017 Rajarampuri Police Station, Kolhapur 1. Deepak Sakharam Kulkarni 2. Hemanti Deepak Kulkarni 3. Shirish Deepak Kulkarni 406, 420, 34 of IPC, Section 3 & 4 of Maharashtra Protection of Interests of Depositors (MPID) Act, 1999 3. 309/2017 03.11.2017 Shivaji Park Police Station, Mumbai 1. D.S. Kulkarni and Sons, 2. D.S.K. and Associates 3. D.S.K. 4. Deepak Sakharam Kulkarni 5. Hemanti Deepak Kulkarni 6. Shirish Deepak Kulkarni 7. Other companies of DSK Group 406, 420, 34 of IPC, Section 3 & 4 of Maharashtra Protection of Construction Interests of Depositors (MPID) Act, 1999 The Enforcement Directorate registered ECIR no. ECIR/01/MBZO/2018 dated 08.03.2018 under the provisions of Prevention of Money Laundering Act, 2002 against (1) Deepak Sakharam Kulkarni (2) Hemanti Deepak Kulkarni (3) Shirish Deepak Kulkarni (4) D.S. Kulkarni & Sons (5) D.S.K. and Associates (6) D.S.K. Construction and (7) ....
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....d to as 'borrowers']. In order to secure the aforesaid loan facility, a secured interest was created by the borrowers on following properties:- • Flat No. 101, 1st Floor, DSK Nupuri, Near Bairstoo Restaurant, Shivaji Park, Veer Savarkar Marg, Dadar (West Mumbai)-400028 • Flat No. 201, 2nd Floor, DSK Nupuri, Near Bairstoo Restaurant, Shivaji Park, Veer Savarkar Marg, Dadar, (West Mumbai) - 400028; and • Flat No. 501, 5th Floor, DSK Nupuri, Near Bairstoo Restaurant, Shivaji Park, Veer Savarkar Marg, Dadar (West Mumbai) - 400028. The borrowers account was classified as Non-Performing Asset (NPA) on 01.10.2017. A statutory demand notice dated 20.02.2018 under Section 13 (2) of the SARFAESI Act, 2002 was served on the borrowers and in the meantime Original Defendant i.e. Bajaj Finance Ltd. assigned the debts due and payable by borrowers including the loan in the present case in favour of the appellant vide assignment agreement dated 26.03.2018 against loan account no. 402LAP09456809 alongwith all the rights, title security interests, benefits, financial documents and that this appellant stepped into the shoe of the Original Defendant no. 58 i....
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.... the borrowers when no such alleged scheduled offence were in the picture and that the title deeds have duly been registered and stamped which makes it further clear that the properties were not acquired from the proceed of crime. The appellant has given the following chain with respect to the properties attached herein:- • Lease of 999 years in favour of Mrs. Kumudini Govindrao Rangenekar and her husband Govindrao Ganpatrao Rengenek granted by Municipal Corporation of City of Bombay vide the registered Lease Deed dated 06.01.1943 qua property being Plot no. 158 of 0/N Ward, admeasuring 476.59 sq.mtrs, bearing C.S. No. 1867, Muxribai Municipal Corporation, Mahim Division situated at the junction of Veer Savarkar Marg, Dr. M.B, Raut Road, Shivaji Park, Mumbai 400028 • After death of Govindrao Ganpatrao Rangenek, Mrs. Kumudini Govindrao Rangenek became sole owner. • Vide Will & Testament dated 21.10.1996 & a Codicil dated 25.12.1998 Mrs. Kumudini Govindrao Rangenekar granted bequest of said property in favour of her granddaughter Ms. Nupuri Prafullachandra Sukthankar as Sole executor and trustee thereof. • Ms. Nupuri Prafullachandra....
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....Ors. V/s. Axis Bank, interest of appellant cannot be defeated or frustrated by attachment by the Enforcement Authority in exercise of its power under Section 8 of PMLA and that there is no allegations of commissions of scheduled offences against the appellant or its assignor or any of the officials of the appellant and that the loan has been granted with due diligence by Bajaj Finance Ltd. i.e. assignor of the appellant and that the appellant is a bonafide third party and that the appellant has no knowledge regarding any illegality allegedly committed by the borrowers. The appellant has relied on the judgment passed by this Tribunal in the matter of JM Financial Asset Reconstruction Company v/s. The Deputy Director, Directorate of Enforcement, Delhi dated 30.08.2019. The third legal submissions made by the appellant is that the appellant is a secured creditor being a bonafide third party had initiated actions against the mortgaged properties under SARFAESI Act, 2002 and rule frames their under much prior to the order of the attachment under PMLA and thus, as held by Hon'ble Delhi High Court in the case of Deputy Director, Directorate of Enforcement & Ors. v/s. Axis Bank and Ors,....
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....al) No. 2997/2020 filed against the judgment and order dated 28.02.2020 passed by the Hon'ble Punjab & Haryana High Court in 'Deputy Director v/s. PNB Housing Finance Ltd. The sixth legal submissions made by the appellant is that there is no material for the formation of 'reason to believe' under Section 5(1) of PMLA, 2002. The reliance has been placed on the following judgments:- (i) Judgment passed by Hon'ble High Court in the case of ITO v/s. Lakhmani Mewal Das [1976] 103 ITR 437 SC and (ii) Decision of this Tribunal dated 21.05.2019 in Bajaj Finance Ltd. v/s. The Deputy Director Directorate of Enforcement, Jaipur & Ors. The seventh and the last legal submissions made by the appellant is that Section 3 of Prevention of Money Laundering Act, 2002 is not applicable in the present matter. The reliance has been placed on the judgment of Hon'ble Gujarat High Court in the case of Jafar Mohammed Hasanfatta and Ors. v/s. Deputy Director and Ors. On the aforesaid grounds, the appellant has prayed for setting aside the impugned order dated 05.08.2019 and the mortgaged properties may be released with right to appellant to exercise its rights under SARFAESI Act, 2....
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....es) + Rs. 518.11 Lakhs (LIC) + Rs. 431.62 Lakhs (Bank Balance) were arising as a result of criminal activity to a scheduled offence, were provisionally attached under Section 5 (1) of PMLA, 2002 vide Provisional Attachment Order No. 01/2019 dated 14.02.2019. Further the properties valued at Rs. 43470.29 Lakhs acquired/held by the DSK Group of Companies (including DSKDL) and their Promoters/Directors/Partners and other persons were also provisionally attached vide above said PAO dated 14.02.2019 under Section 5(1) of PMLA, 2002, invoking the provision with reference to "value thereof" as defined under Section 2(1)(u) r/w Section 2(1)(v) of the PMLA which prescribed that 'Proceed of Crime' means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property. That thus after thorough investigation and on the basis of statements recorded, facts and evidence collected, the total property worth Rs. 90910.31 lakh was provisionally attached on 14.02.2019 vide PAO No. 01/2019 and Original Complaint (OC) No. 1104/2019. It is further submitted that the said properties mentioned....
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.... from partnership firms. Thus the flats are acquired out of proceeds of crime. (d) The Adjudicating Authority has passed the order after taking into account from both the sides and after coming to the conclusion that the properties are involved in money laundering. (e ) That in view of Section 71 of PMLA of 2002 PMLA is having overriding effect SARFAESI Act, 2002 and RDDBFI Act, 1993. The Respondent has relied on the judgment in the matter "The Deputy Director of Enforcement v/s Axis Bank & Ors. passed by Hon'ble High Court Delhi on 2nd April, 2019 and judgment in the matter of CRA-S- 4326-SB-2017(O&M) Deputy Director Vs PNB Housing Finance Ltd. passed by division bench of Hon'ble High Court of Punjab and Haryana vide its order dated 28th Feb, 2020. (f) That reason to believe have been incorporated in the PAO and O.C. supported by material. (g) That prosecution complaint has been filed in the PMLA, Special court, Mumbai on 03.08.2020. The appellant/bank can approach the special court under section 8(8) of the PMLA, 2002 for securing their interest and for restoration of property under new Rule 3A of the Prevention of Money Laundering PMLA, (R....
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.... the reply, written arguments and the judgments cited by both the parties. It is seen from the record that M/s. Bajaj Finance Ltd. which had granted loan to Hemanti D. Kulkarni & Shirish D. Kulkarni got the aforesaid two properties mortgaged to secure the loan. The Provisional Attachment Order (PAO) is passed on 14.02.2019 and the O.C. No. 1104/2019 has been filed by the Respondent before the Adjudicating Authority on 15.03.2019 wherein M/s. Bajaj Finance Ltd. has been arrayed as Defendant no. 58. It is revealed from the list of events submitted by the appellant that M/s. Bajaj Finance Ltd. the original lender assigned, the debts due and payable by the borrower, in favour of the present appellant which goes to show that the appellant stepped into the shoe of M/s. Bajaj Finance Ltd. almost one year prior to the issue of PAO. It is also stated in the list of event that the Respondent had issued notice which was received on 10.06.2019 by the present appellant wherein the appellant was directed to refrain from dealing with the questioned mortgaged properties. Inspite of the knowledge of the appellant's interest in the questioned properties the appellant was not made a party in the p....
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....dated 02.07.2019 the Advocate Mr. Kotla Harshvardhan on behalf of Bajaj Finance Limited supplied the Original complaint to the appellant and orally informed that the matter was listed on 04.07.2019. Thereafter, the appellant herein through its Authorized representative and Advocate appeared before the Ld. Adjudicating Authority and filed a substitution application seeking its substitution as Defendant No. 58 in place of the original Defendant No. 58 (Bajaj Finance Limited) and further, sought time to file its reply to original complaint filed by the Respondent. The Ld. Adjudicating Authority in light of the circumstances granted to the present appellant one-day to file its reply to original complaint filed by the Respondent. It is also relevant to mention herein that the original lender/Defendant No. 58 (Bajaj Finance Limited) has also filed an application before the Ld. Adjudicating Authority seeking its deletion from the array of parties since the financial assistance granted by it to the borrowers was assigned to the present Appellant. Copy of Application for Substituting the name of present appellant in place of original lender/Defendant No. 58 (Bajaj Finance Limited) filed by ....
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....pronounced its Order on 05.08.2019 wherein the Ld. Adjudicating Authority while recording the fact that the present appellant has filed an application seeking its substitution failed to consider the reply, Oral submissions as well as written submissions made on behalf of the present appellant and erroneously confirmed the Provisional Attachment Order thereby causing a great prejudice to rights and interest of the present appellant and therefore, this appeal has been filed assailing the impugned order dated 05.08.2019 passed by the Ld. Adjudicating Authority." In para T, Y & RR of the grounds in the appeal memo the appellant has stated as follows:- "T. Because the Adjudicating Authority failed to understand that the Appellant is the rightful claimant of the said properties. It is submitted that the Appellant has filed the copies of the sale deeds/title deed of the properties which shows that the dated of acquisition of all the properties. The Appellant is having the mortgaged charge over the property. It is submitted that the valuable right is lost for the Appellant, by order of attachment and eventual confiscation. Y. Because neither the fact of grant of ....