TaxTMI 
TaxTMI 
2026 (9) TMI 1925
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.... value of Rs. 43,54,10,927/- in the name of M/s Mahamaya Exports Pvt. Ltd. was confirmed. 2. Ld. Counsel for the Appellant Bank submitted that Shri Atul Bansal and Smt. Sona Bansal opened the bank account in the name of ABWIL (M/s ABW Infrastructure Ltd.) with the Appellant Bank on 22.03.2010 in Nehru Place Branch, New Delhi. The account was then shifted to New Friends Colony Branch, New Delhi. Shri Atul Bansal and Smt. Sona Bansal then approached the Appellant Bank for sanctioning of Bank Guarantee of Rs. 9.18 Crores. Pursuant to the request made by them, the Bank had sanctioned the bank guarantee vide sanction letter dated 13.04.2011 against mortgaging the property of M/s Mahamaya Exports Pvt. Ltd. (Guarantor). Ld. Counsel for the Appellant Bank submitted that Shri Atul Bansal and Smt. Sona Bansal submitted an application dated 22.10.2011 with request for Term Loan of Rs. 15 Crores against the same said property of M/s Mahamaya Exports Pvt. Ltd. which was mortgaged earlier. Fresh term loan of Rs. 15 Crores was sanctioned to M/s ABWIL against the extension of equitable mortgage of the land in the name of M/s Mahamaya Exports Pvt. Ltd. vide sanction letter dated 31.10.2011. Ld. ....
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.... aside by the Hon'ble DRAT, Delhi vide its order 16.10.2018 and the Appellant Bank was permitted to confirm the sale in favour of highest bidder of auction held on 08.08.2018. The highest bidder then failed to deposit complete sale consideration in terms of auction held on 08.08.2018, however, the part payment deposited by highest bidder was refunded to the auction purchaser in terms of order dated 14.05.2019 passed by the Hon'ble Punjab and Haryana High Court, Chandigarh in CR no. 8890/2018 titled Allahabad Bank vs. M/s RSDR Builders Pvt. Ltd. 4. Ld. Counsel for the Appellant Bank submitted that the Respondent herein issued PAO No. 05/2019 dated 25.07.2019 provisionally attaching the property of M/s Mahamaya Exports Pvt. Ltd. i.e., 14 acres 6 Kanals 11.5 marlas of land which was mortgaged to the Appellant Bank by Shri Atul Bansal and Smt. Sona Bansal. Ld. Counsel for the Appellant Bank submitted that the Respondent filed an Original Complaint No. 1181/2019 in the PAO No. 05/2019 against the Appellant. The Ld. Adjudicating Authority issued notice to the Appellant Bank on 30.08.2019 in OC No. 1181/2019. The Appellant submitted its reply dated 04.11.2019 against OC No. 118....
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....nner, land measuring about 400 acres, whose market value at that time was above Rs. 4 crores per acre, totalling about Rs. 1600 crores, was purchased by the builders from the innocent land owners for only about Rs. 100 crores. Thus, some politicians who were also important functionaries of the State Government, Government Officers and their agents caused a wrongful loss of Rs. 1500 crores to the land owners of Village Manesar, Naurangpur and Lakhnoula of District, Gurgaon and corresponding wrongful gains to themselves. 7. Ld. Counsel for the Respondent submitted that it may be seen that the bank and its officials cannot give clean chit to themselves and become judge of their own cause as while distributing public money and coming into the shoe of a so called 'secured creditor', they should have done due diligence. When the Enforcement Directorate has unearthed the proceeds of crime, the Appellant bank is trying to portray that being a 'secured creditor' the provisions of PMLA should not be enforced. Being a Bank, working under the same economic system, the perpetrators of such economic crimes should not be shielded in such manner as is being done by the Bank. The....
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....e Hon'ble Delhi High Court in the matter of Deputy Director, Directorate of Enforcement v. Axis Bank & Ors., [2019 SCC OnLine Del 7854], are being cited below: "139. From the above discussion, it is clear that the objects and reasons of enactment of the four legislations are distinct, each operating in different field. There is no overlap. While RDBA has been enacted to provide for speedier remedy for banks and financial institutions to recover their dues, SARFAESI Act (with added chapter on registration of secured creditor) aims at facilitating the secured creditors to expeditiously and effectively enforce their security interest. In each case, the amount to be recovered is "due" to the claimant i.e. the banks or the financial institutions or the secured creditor, as the case may be, the claim being against the debtor (or his guarantor). The Insolvency Code, in contrast, seeks to primarily protect the interest of creditors by entrusting them with the responsibility to seek resolution through a professional (RP), failure on his part leading eventually to the liquidation process." 10. The Hon'ble Delhi High Court in Axis Bank (supra), while considering the very q....
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....e of money- laundering objects to the attachment, his claim being that the property attached was not acquired or obtained (directly or indirectly) from criminal activity, the burden of proving facts in support of such claim is to be discharged by him. (vi) The objective of the PMLA being distinct from the purpose of the RDBA, SARFAESI Act and Insolvency Code, the latter three legislations do not prevail over the former. (vii) The PMLA, by virtue of section 71, has the overriding effect over other existing laws in the matter of dealing with "money-laundering" and "proceeds of crime" relating thereto. (viii) The PMLA, RDBA, SARFAESI Act and Insolvency Code (or such other laws) must co-exist, each to be construed and enforced in harmony, without one being in derogation of the other with regard to the assets respecting which there is material available to show the same to have been "derived or obtained" as a result of "criminal activity relating to a scheduled offence" and consequently being "proceeds of crime", within the mischief of the PMLA. (ix) If the property of a person other than the one accused of (or charged with) the offence of money-laund....
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.... time of acquisition of such interest. (xiv) If it is shown by cogent evidence by the bona fide third party claimant (as aforesaid), staking interest in an alternative attachable property (or deemed tainted property) claiming that it had acquired the same at a time anterior to the commission of the proscribed criminal activity, the property to the extent of such interest of the third party will not be subjected to confiscation so long as the charge or encumbrance of such third party subsists, the attachment under the PMLA being valid or operative subject to satisfaction of the charge or encumbrance of such third party and restricted to such part of the value of the property as is in excess of the claim of the said third party. (xv) If the bona fide third party claimant (as aforesaid) is a "secured creditor", pursuing enforcement of "security interest" in the property (secured asset) sought to be attached, it being an alternative attachable property (or deemed tainted property), it having acquired such interest from person(s) accused of (or charged with) the offence of money-laundering (or his abettor), or from any other person through such transaction (or inter-co....
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....ertain 'middlemen' and builders enriched themselves at the expense of the landholders and public interest which was to be achieved by acquisition. b] The decisions dated 24.08.2007 and 29.01.2010 as well as entertaining of applications for grant of licence from those who had bought the lands after the acquisition was initiated, were not bona fide exercise of power by the State machinery. The exercise of power under the Act was guided by considerations extraneous to the provisions of the Act and as a matter of fact, was designed to enrich the builders/private entities. These decisions were nothing but fraud on power." 12. The judgment Rameshwar (supra) assumes significance because the subject property cannot be examined in isolation from the underlying transactions and the chain of properties and entities forming part of the alleged scheduled offence. The Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India, [2022 SCC OnLine SC 929], while explaining Section 2(1)(u) of the PMLA, has held that "proceeds of crime" is the core ingredient for invocation of the provisions of the PMLA and that the property must be derived or obtained, directly or indirectly,....
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.... a result of criminal activity with which the offender involved in money laundering offence may not be directly concerned at all. Even so, he becomes liable to be proceeded with under Section 3 and punished under Section 4 of the 2002 Act. The principle of an accessory after the fact will have no application to the offence of money laundering. Suffice it to observe that the argument under consideration is devoid of merit." 13. In the present case, the Respondent has not sought to attach the subject property merely because it belongs to a borrower of the Appellant Bank. The attachment has been made pursuant to the investigation into the scheduled offences and into the alleged chain of transactions involving the land and the entities connected with M/s ABWIL. The property has accordingly been identified by the Respondent Directorate as proceeds of crime. The Respondent Directorate has stated in the OC 1181/2019 that huge amount was transferred from the account of M/s AWBIL and was credited in the account of M/s Mahamaya Exports Pvt. Ltd. The amount so transferred was used for procuring the attached land i.e. 14 acres 6 Kanals and 11.5 Marlas in the name of M/s Mahamaya Exports Pvt....
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....ity and to ultimately secure confiscation of such property in accordance with law. The Appellant Bank has also contended that there is no allegation of participation or connivance on its part in the scheduled offence. This submission, however, does not by itself warrant release of the attached property. The attachment proceeding is directed primarily against the property which is alleged to constitute proceeds of crime. The liability of the property for attachment cannot be defeated merely because the person claiming an interest therein is not himself an accused in the scheduled offence. The distinction between the liability of the property and the culpability of the person claiming an interest therein is material. The absence of criminal liability on the part of the Appellant Bank does not, by itself, establish that the property is free from attachment if the statutory ingredients for attachment under Section 5 are otherwise satisfied. 16. The Appellant has further relied upon its contention of having conducted due diligence and the fact that the loan was sanctioned against an equitable mortgage. However, in the present case, the Bank's security interest was created in resp....