TaxTMI 
TaxTMI 
2025 (10) TMI 495
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....or the month of March and April, 2015. Hence, the appellants officials visited the respondents on 15.05.2015 and asked for repayment of the loan amount. At this stage, they were informed that the said mortgage property has been attached under the PMLA, 2002 and the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act 1999 ("MPID Act" for short) vide order dated 24.06.2016. Thereafter, the appellant had filed an appeal titled "Union Bank of India Vs The Deputy Director, Directorate of Enforcement Mumbai" before the Appellate Tribunal (PMLA), which was disposed of by the Appellate Tribunal vide its order dt. 21.07.2015 directing the applicant to approach the Adjudicating Authority and also directing the authority to adjudicate the points raised by applicant. Thereafter, an application (MA No. 13/2015) was filed by the appellant bank u/s 8(2) of PMLA, 2002 before the Ld. Adjudicating Authority. The applicant bank thereby sought an opportunity of hearing so as to prove that the said property is not involved in money laundering and for recall of the Provisional Attachment Order dt. 04.08.2014. The said Miscellaneous Application was dismissed by the Ld. AA v....
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....ested for and granted to the appellant based on the plea that the matter was pending before the Hon'ble Supreme Court. Now that the matter has been disposed of and a legal position adverse to the appellant has been upheld by the Apex Court, a request for further adjournment is made requesting this Appellate Tribunal to await filing of a review application against the said order by the appellant and furthermore, await the decision thereon by the Apex Court. The aforesaid request was considered and denied as it was found to be devoid of merit. The appeal is of the year 2016 and cannot be kept pending indefinitely waiting for the appellants to approach the Hon'ble Supreme Court and, further, assuming the Apex Court will consider the prayer and review its order. It was made clear on the previous dates of hearing that no further adjournment would be granted. Accordingly, both parties were asked to finally argue the case on merits. 7. No other issues of facts or law were raised by ld. Counsel for the appellant apart from the issue of pre-existing mortgage and charge of the appellant over the subject property at the time of its attachment by the respondent directorate. However,....
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....thout difficulty. This Appellate Tribunal, has in the past, held that the SARFAESI Act does not have an overriding effect and does not bar action for attachment of property under the PMLA, 2002. For instance, in State Bank of India v. Directorate of Enforcement, FPA-PMLA-3754/AHD/2020 (order dated 06.03.2025), this Appellate Tribunal held as below: "At this stage we may further deal with another argument raised by the appellant in reference to the SARFAESI Act of 2002 to hold that the aforesaid Act has precedence over the PMLA 2002 because the amendment in the Act by SARFAESI Act 2002 was made w.e.f. 01.09.2016 by the amending Act 2016 which provide overriding effect to other provisions. For reference, amending provisions pursuant to the amending Act of 2016 is quoted hereunder: 26E. Priority to secured creditors.-Notwithstanding anything contained in any other law for the time being in force, after the registration of security interest, the debts due to any secured creditor shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority. Explanation.-F....
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....ention in this appeal is rejected, the appellant may be granted at liberty to move the Special Court under the provisions of Section 8(7) or Section 8(8) for release of the property during the pendency of criminal prosecution case before that Court. Having considered the prayer, the same is found to be acceptable and in line with the scheme of the Act as well as the previous pronouncements of this Appellate Tribunal. In JM Financial Asset Reconstruction Company Ltd. vs. The Deputy Director, Directorate of Enforcement, Mumbai & Anr., order dt. 26.04.2024 passed in FPA-PMLA-3223/MUM/2019), this Appellate tribunal has held as below: "12. It is otherwise a fact that property is attached to protect the interest and to settle it at the end of the trial in favour of those who are entitled for it. The attachment does not affect the title or the ownership of the property rather it can be when it is confiscated. The Special Court and the Central Government are having power to settle the interest of the claimant and accordingly to release the property in favour of those who are entitled for it. Thus, financial institution would not be affected and if the property is released at the i....
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....ought by the legislature for the purpose sought to be achieved. 25. In the light of the aforesaid, the interference in the order of the attachment order, on a challenge by the financial institution, should not be persuaded by the sentiments and only on the ground that once there is a mortgage of the property, it should go to the financial institution. 26. In case, it is taken up on the sentiments of the institution, it may result in anarchy and explained further by following illustration:- If property is proceeds of crime or attached for the value thereof but was under mortgage with the financial institution and thereby to be released addressing the interests of the financial institution leaving and even affecting the claim of the victim who lodged the criminal case against the accused. In case of release of the property from attachment at the instance of financial institution, it can be auctioned where it may achieve the amount greater than what is due to the financial institution. In that case, the financial institution can retain the amount to the extent it is due to them and remaining has to be given to the person who mortgaged the property which would be none....