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TMI Blog2019 (6) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... end of the year 2011 and 2012 onwards which is much later to the acquisition of the mortgaged properties in question. Prior mortgage charge of secured creditors have also been registered qua the mortgaged immovable properties stating that these are under the mortgage charge of the Bank since 2005. SARFAESI Act measures under Section 13(2) and Section 13(4) were initiated in the year 2013 and Bank s OA for recovery of dues under RDB, Act was filed in the year 2014 and DRT order dated 20.01.2014 restraining the Borrowers and Guarantors to deal with the mortgaged properties are much prior to the passing of the PAO order 31.03.2016 by the ED. Bank s OA for recovery. The appellant is always at liberty to approach the Special Court to initiate the proceeding for disposal of mortgaged property, if so desired, who is agreeable to deposit the excess amount if such situation will arise. Counsel for appellants after taking the instructions from his clients stated that his clients are duty bound to deposit the excess amount with the respondent. Appellants have nothing to do and has no connection with the allegation of crime committed by the borrowers. They are not involved for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2018 allowed the banks appeal on the reasons that the mortgaged properties were acquired prior to the alleged date of crime and no money disbursed by the bank has been invested to acquire these properties and bank has created charge over the said properties prior to the date of crime and bank has already initiated measures under SARFAESI Act, 2002 and filed its OA before DRT-II, New Delhi, for recovery of its dues and there is no nexus whatsoever between the alleged crime and the PNB Consortium who is the mortgagee of the properties in question and purchased prior to the sanctioning of the loan and bank is a victim of fraud and it is an innocent bonafide claimant and not involved in the money laundering activity and bank is at liberty to move its claim before the Special Court for disposal of the properties in order to recover its dues pending in the loan accounts. 2. The Hon ble High Court of Delhi in Crl. A. No 076/2018 vide Judgement dated 02.04.2019 allowed the appeal of the respondent inter-alia on the reasons that SARFAESI Act and RDB Act do not prevail over PMLA as these 3 Special Acts operate in their separate respective fields and upon doing harmonious co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing and marketing of essence Oils, Perfumery Compounds, Flavors, Fragrances and Aromatic Chemicals. 5. The aforesaid financing facilities were provided by the Appellant Banks upon the Respondents executing various documents including creation of mortgages over the attached properties. It is pertinent to note that the attached properties were mortgaged by the Respondents with the Appellant Banks as early as 2005 and 2007 and the said properties were acquired by the Respondents between 1994 and 2005. 6. The operation of the Respondent No. 4 s account was initially regular and satisfactory due to which the Appellant Banks increased the credit limits in the year 2011. Thereafter, the account became irregular and was subsequently classified as Non-Performing Asset (NPA) as per RBI guidelines. 7. Since the Respondent No. 4 failed to regularise its account and did not provide a list of its debtors, the core committee of the Consortium of Banks decided to verify the assets of the company and get a Techno Economic Viability Study ( TEVS ) conducted for the same. The PNB led Consortium vide letter dated 20.12.2013 engaged reputed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 Company. 12. The Enforcement Directorate, Delhi Zonal Office is pursuant to the recording of the ECIR No. DLZO 101/2015/AD (VM) dated 12.02.2015 which came to be filed on the basis of Assistant General Manager, Punjab National Bank filing written complaint dated 09.12.2013 to the Banking Securities and Fraud Cell(BSFC),CBI, New Delhi for registration of a case for commission of fraud by M/s. Surya Vinayak Industries Ltd (SVIL) (Defendant no. 3) and its Directors, as they got loan/CC limit for SVIL on the basis of forged record/accounts details of the company. Accordingly, an FIR came to be registered on 01.01.2014 against Defendant Nos. 1 to 4 Directors and others. The FIR was registered for the offences punishable under Section 120-B and Section 420 of IPC. The said offences are also the scheduled offences under PMLA. Consequently as aforesaid the ECIR came to be recorded against the suspected/accused person prima facie for commission of offence of money laundering under Section 3, punishable under Section 4 of PMLA. 13. Despite the said attachment orders of the DRT, the Respondent No. 1 issued the Provisional Attachment O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.22 sq. mts. Rajiv Jain (Respondent no. 3) 6.10.1999 1.3.2005 27.12.2005 5. Land and building on plot of land bearing Khewat No. 90 at Village Naya Bans, Sampla District, Rohtak, Haryana measuring 3025 sq. Yards. Rajiv Jain (Respondent No. 3) 9.7.1999 27.05.2005 6. Land bearing Khewat No. 134 (4446.75 sq. Yds.) and 145 (6897 sq. yds.) at Village Naya Bans Sampla, District Rohtak, Haryana measuring 11343.75 sq. yds. Rajiv Jain (Respondent No. 3) 11.08.2000 21.06.2000 27.05.2005 7. Land measuring 18422.25 sq. yards at Village Naya Bans, Sampla, District Rohtak, Haryana. Rajiv Jain (Respondent No. 3) 11.10.1998 4.10.1999 21.10.1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme, it must be clarified that if the order confirming the attachment has attained finality, or if the order of confiscation has been passed or, further if the trial of a case for the offence under Section 4 PMLA has commenced, the claim of a party asserting to have acted bonafide or having legitimate interest will have to be inquired into and adjudicated upon only by the special court. 6. It is not disputed by Mr. Rana that the mortgaged immovable properties in question were purchased by M/s Surya Vinayak Industries Ltd. and its Promoters Rajiv Jain and Sanjay Jain and its Group Associate Company i.e M/s SVIL Mines Ltd in the years 1994, 1997, 1998, 1999, 2000, 2002, 2003, 2005. No contrary materials are available on record. 7. It is also not disputed that the properties in question were mortgaged by deposit of original title deeds in favour of PNB Consortium by the above Mortgagors in the year 2005, 2007 and 2008 as collateral securities for availing the credit facilities in the loan A/c of Borrower Companies M/s Surya Vinayak Industries Ltd. and M/s SVIL Mines Ltd. The original title deeds of the mortgaged properties are in the possession of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble mortgage by deposit of Original Title deeds of Land bearing Khewat No. 45, Khatoni No.58, Kila No.38/7/3, Khewat No. 40/39, Khatoni No.51-53, Khewat No. 35, Kila No.22/1/1, Khewat No.73, 35, 90 145,134 situated at Village Naya Bans Sampla, District Rohtak, Haryana, total measuring 32,790 sq. yds, in the name of Sh. Rajiv Jain, Promoter/Director of the above said Borrower Company with true copies of Letters dated 21.05.2006, 06.06.2006, 09.09.2006. f) True Copy of Extract of Mortgage Register of PNB dated 27.05.2005 in respect of creation of equitable mortgage by deposit of Original Title deeds of Land measuring 32065 sq. Yds., situated at Village Naya Bans, Sampla, District Rohtak, Haryana, in the name of Sh. Sanjay Jain, Promoter/Director of the above said Borrower Company with true copies of Letters dated 21.05.2006, 06.06.2006, 09.09.2006. g) True Copy of Extract of Mortgage Register of PNB dated 27.05.2005 in respect of creation of equitable mortgage by deposit of Original Title deeds of Land measuring 32065 sq. Yds., situated at Village Naya Bans, Sampla, District Rohtak, Haryana, in the name of Sh. Sanjay Jain, Promoter/Director of the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mortgaged properties in question. 14. ED recorded ECIR No. DLZO/2001/2015/AD (VM) on 12.02.2015 for the offence of money-laundering. 15. Provisional Attachment Order dated 31.03.2016 was issued by ED qua the mortgaged properties in question alleging that the secured assets in question are proceeds of crime as the Company had provided fake list of debtors, creditors, fake invoices and indulged in diversion of funds to Overseas and the offence of money laundering commenced from the year 2011-2012 onwards and funds obtained from the PNB Consortium have been misappropriated and they are proceeds of crime. It is admitted by ED that none of the mortgaged properties in question were obtained directly or indirectly or remotely connected with the funds obtained from PNB Consortium after 2011 onwards proceeds of crime as they were acquired in the year years 1994, 1997, 1998, 1999, 2000, 2002, 2003, 2005 prior approaching the Bank for loans. 16. OC No. 600/2016 dt. 29.04.2016 was filed before the Adjudicating Authority, PMLA. 17. PAO order 31.03.2016 was confirmed by the Adjudicating Authority, PMLA vide order dt. 22.09.2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk since 2005. 21. SARFAESI Act measures under Section 13(2) and Section 13(4) were initiated in the year 2013 and Bank s OA for recovery of dues under RDB, Act was filed in the year 2014 and DRT order dated 20.01.2014 restraining the Borrowers and Guarantors to deal with the mortgaged properties are much prior to the passing of the PAO order 31.03.2016 by the ED. Bank s OA for recovery. 22. The appellant is always at liberty to approach the Special Court to initiate the proceeding for disposal of mortgaged property, if so desired, who is agreeable to deposit the excess amount if such situation will arise. Counsel for appellants after taking the instructions from his clients stated that his clients are duty bound to deposit the excess amount with the respondent. 23 The Appellants have nothing to do and has no connection with the allegation of crime committed by the borrowers. They are not involved for the offences of money-laundering. The mortgage properties are admittedly not derived from criminal activities or proceed of crime. The scope of the PMLA is to punish the accused person and not to punish the innocent person who is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achment order which has been confirmed. 28. Therefore, this Tribunal possesses the requisite jurisdiction in terms with the Act as the court of first appeal, to adjudicate upon the pleas of the Appellant and determine the bonafides and legitimacy of its claims as well as the legality of the Provisional Attachment Order. Upon an argument being raised by the Enforcement Directorate that claims of third parties are to be solely adjudicated by the Special Court before whom trial is pending, the Hon ble High Court of Delhi in the Axis Bank Decision has held that the claim of a party asserting a bonafide and legitimate claim would be inquired into by the Special Court only if the order confirming the attachment has attained finality . An order cannot be said to have attained finality until and unless all the remedies under the Act have been exhausted. No doubt the bank and financial institutions are always at liberty to approach the Special Court (if so desired) in order to invoke the amended provision of sub section 8 of Section 8, however, it is wrong to suggest that the bank and financial institutions are not entitled to challenged the order of attachment because t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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