2022 (3) TMI 1599 - HC - Money Laundering

Money Laundering - Seeking mandamus against respondents to take legal action against financial institutions for favoring illegal group of companies - action against officials involved in fraudulent transactions related to loan advancement by a financial institution - HELD THAT - It is not appreciated as to how the petitioner can raise any grievance in relation to the said sale transaction, which has been undertaken through a public sale. The petitioner s submission that the property was sold at a price lower than the market price, cannot be accepted since the sale was a public sale through a public auction. In any event, that is a matter which does not concern the petitioner, and the borrowers have already challenged and lost the said challenge. Moreover, we are informed that the sale has already been confirmed. This petition is nothing but a motivated exercise undertaken by the petitioner at the behest of the borrowers after they have failed to obstruct the sale of the property. It appears that the petitioner has now been set up by them - Petition dismissed.

Summary

Issues involved:
The petition seeks writs of mandamus against respondents to take legal action against financial institutions for favoring illegal group of companies, action against companies siphoning money, and action against officials involved in fraudulent transactions related to loan advancement by a financial institution.

Relief sought and background:
The petitioner sought writs to take legal action against financial institutions for favoring illegal group of companies and individuals who siphoned off money. The loans in question were advanced by respondent No. 13, India Infoline Finance Limited, to specific borrowers, M/s AVJ Developers (India) Private Limited and M/s Best View Properties Limited. Notably, the borrowers were not made parties in the proceedings.

Challenge and submissions:
While the petition initially seemed to challenge the loan disbursement process, the focus shifted during arguments to questioning the sale of mortgaged assets under the SARFAESI Act by the financial institution. The petitioner raised concerns about the auction sale of the mortgaged asset, alleging it was sold below market price. However, the Financial Institution's representative highlighted that the auction sale was conducted publicly and confirmed, with the borrowers having already challenged and lost on this matter.

Dismissal and costs:
The court dismissed the petition, deeming it a motivated exercise orchestrated by the borrowers after failing to obstruct the property sale. The petitioner's attempt to withdraw the petition was denied, and costs of Rs. 1 Lakh were imposed to be deposited within two weeks with the Delhi State Legal Services Authority. Additionally, another writ petition by the petitioner was noted, with a requirement to provide proof of cost deposit in that case.