TaxTMI 
TaxTMI 
2026 (1) TMI 1079
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....iscussed at length in the judgment dated 28.07.2017 of this A.T. The same are reproduced below for ready reference: 7. The common facts as emerged from the materials available in records are as follows: (i) The appellant bank sanctioned Term Loan of Rs. 6.50 crores in favour of M/s Raghubir Hospital P. Ltd. (RHPL), Respondent no. 4 (R-4). Dr. Kewal Krishan Sood was promoter of said RHPL. The term loan was sanction for the purpose of setting up of a 150 bedded hospital at 26th 27th Kms. Stone, Delhi Hapur Bypass, near Village Dasna, Ghaziabad (UP) by submission of forged proforma invoices and receipts issued by M/s. Gaurav Medical Equipments (GME). (ii) During the year 2007, Term Loan aggregating Rs. 5.63 crores was disbursed by appellant bank to RHPL. A substantial loan amount was disbursed for purported purchase of 2 machines manufactured by Siemns Ltd. i.e. CT scan Systems-Rs. 1.19 crores and MRI System Rs. 2.44 crores. RHPL misrepresented to appellant bank that M/s GME was a supplier of seimens products and also submitted proforma invoices dt. 02.06.2007 and 13.06.2007 besides receipts dt. 06.06.2007 and 17.06.2007 of M/s GME for getting the said amoun....
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....Zonal Office of Directorate of Enforcement, New Delhi, against the aforesaid Suspect/Accused persons for commission of offence under Section 3 of PML Act, 2002, punishable u/s. 4 of PML Act, 2002 (as amended), and the case was taken up for further investigation under the said Act, accordingly. 8. The appellant bank, in exercise of its power under section 13(2) of SARFAESI Act issued notice to the borrowers and guarantors vide notice dated 11.08.2008 and published on 09/09/2008. 9. The appellant bank, in exercise of power u/s. 13(4) of SARFAESI Act took over possession of the hypothecated securities/mortgaged properties vide possession notice and panchnama dt. 07/12/2008. This action of appellant came under challenge by respondent no. 2 herein, before the DRAT unsuccessfully with cost of Rs. 50,000/- in favour of the bank. 10. The appellant bank, thereafter, filed O.A. no. 151/2011 before DRT, New Delhi for recovery certificate, pendent elite and future interest, sale of mortgaged properties and hypothecated securities. The details of mortgaged immovable properties sought for sale in the said O.A. 151/2011 were: a. Agricultural land beari....
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....together with equipments machines etc. installed therever. (iii) Immovable property at office no. 507, shakuntala Building, 59, Nehru Place, New Delhi in the name of Vinod Kumar Gupta (R-5 in appeal no. 729/2014) (iv) A/c no. 629401139789 of Shri V.K. Gupta in ICICI Bank, Nehru Place having Rs. 1,15,688.79/- 15. We have gone through the appeal papers and reply of the respondent in appeal no 729/2014 and we have heard both the parties. 16. The appellant bank has challenged the impugned orders under appeal on identical grounds. The Most important legal issue raised before us is over-ridding effect of PMLA-2002 and SARFAESI Act, 2002. 3. Having elaborately considered the rival submissions of the parties, this Appellate Tribunal held as below: "21. Admittedly, neither the banks nor employees of these appellants are accused in any criminal proceedings nor there is any allegations against them that they are involved in the commission of alleged crime or generating "proceeds of crime". The amounts of loan sanctioned are public money and they are entitled to get back their money by selling the mortgaged property as a first charge. 22....
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....vailable to show that it was created to defeat the said law. He next referred to annexure para (xii) and submitted that the said paragraphs establish the bonafide of the bank. He also referred to para (xiv) and (xv) as well as para 173 of the said judgment. Para (xv) states that where a bonafide third party claimant is secured creditor pursuing enforcement of security interest of the property sought to be attached the direction of attachment under PMLA shall be valid and operative subject to satisfaction of the charge or encumbrance of the such third party and restricted to such part of the value of the property as is in excess of the claim of said third party. Further in para 173, the Hon'ble High Court has also observed that it appears that the assets which have been subject matter of attachment in the appeals before them (including the case of appellant herein) were not tainted property and had been acquired prior to the criminal activity giving rise to acquisition of money laundering and had been attached as alternative attachable properties or deemed tainted properties. 6. Ld. Counsel for the appellant also placed before the bench a copy of the judgment of the Hon'ble Karna....
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....ttaching these properties, the Bank would not be able to proceed against these properties to recover its loans and that cannot be the object of the PMLA. Considering the provisions of Section 3 and the mandate of Section 8(8) of the Act, we are of the view that the Appellate Tribunal has correctly held that the attachment order was bad in law and has rightly set aside the same. 18. The Bank is a secured creditor and had commenced the recovery proceedings under the SARFAESI Act before the Debt Recovery Tribunal. The blocking of recovery under the SARFAESI Act would cause grave prejudice to the Bank and the recovery proceedings and it would not be in the interest of justice and the interest of the Bank which itself had filed the criminal complaint on the basis of which, the CBI undertook the investigation and the proceedings under the PMLA have been undertaken against the then Branch Manager and the then Manager and borrowers. The Bank is entitled to enforce its security interest by attaching the secured assets. The Bank's right should not be nullified. If the Enforcement Directorate is permitted to proceed with the matter, this conflict puts the Bank in a precarious pos....
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....Hon'ble Delhi High Court is as follows: • The interest vesting in a third party which has acted bona fide, for lawful and adequate consideration and had acquired the said interest in the property prior to the commission of the scheduled offence, cannot be defeated or frustrated by attachment the property (para 164); • Where third party interest was prior to criminal activity, a bonafide third party claimant has a legitimate right to enforcement of its claim in accordance with law, notwithstanding attachment of the property under PMLA. In such situations, the order of attachment under PMLA would remain valid and operative, but would be restricted to such part of the value of the property as exceeds the claim of the third party (para165); • As both the actions are in accord with law, the PMLA attachment, though valid and operative, would take a back-seat allowing the bonafide third party secured creditor enforce its claim by disposal of the subject property. The remainder of its value, if any, thereafter is to be made available for purposes of PMLA (para 165). 12. In the present case it is not disputed even by the respondent directorate that ....