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2019 (1) TMI 329 - AT - Money LaunderingProvisional attachment of assets - recovery of dues by banks - mortgaged/hypothecated properties - charge/lien over the property - priority over debts due to the Appellant Bank - Section 26E of the SARFAESI Act, 2002 - Section 31B of the Recovery of Debts due to Banks and Financial' Institutions Act, 1993 - non-obstante clause - Held that:- The Appellant-Bank being a Secured Creditor, since it had lent its own money to the Predicate Offender earlier, is entitled to priority over all other debts and government dues, including revenues, taxes, cesses and rates due to the Central Government, State Government or local authority. Hence, the Respondent - Deputy Director has no power to attach the property of the mortgagors. The Hon'ble Andhra Pradesh High Court in the case of B. Rama Raju vs. Union of India &Ors. [2012 (5) TMI 240 - HIGH COURT OF ANDHRA PRADESH] in which the Hon'ble High Court has held that if the Adjudicating Authority is satisfied as to the bona fide acquisition of property, it should relieve such property from provisional attachment by declining to pass anOrder of confirmation of the provisional attachment. The Adjudicating Authority also has no power to confirm the Attachment under Section8(2) of PMLA. Similarly, it is a simple case of recovery by the Appellant-Bank from its Borrower its own stressed Asset, since the Bank had already lent the money owned by it, which the Bank is entitled to recover the same - In the present case, this Appellant - Bank is an innocent party since it had already lent its own money to the Predicate Offender and the property in question being mortgaged to the Bank which is provisionally attached by the Respondent- Deputy Director ought to have been released by the Adjudicating Authority under Section 8(2) of PMLA. The provisions of The Prevention of Money-Laundering Act, 2002 cannot be construed and implemented to the detriment of third parties having no connection with and involvement in the scheduled offences which fall within the domain of the Act. The provisions of the Act can only entail penal consequences on those who are not guilty of committing of scheduled offences - The rights of a third party having no involvement in the scheduled offences cannot be jeopardized and decimated by the operation of Act as the same would be violative of their legal right under bond fide contracts. The provisional attachment order is legally erroneous and untenable and could not have been passed more particularly in view of the fact that the complainant was aware of the fact that there is an exclusive and paramount claim of the Appellant Bank, therefore, The Adjudicating Authority had no justification/jurisdiction for attachment of the aforesaid hypothecated/Equitably Mortgaged Moveable and immovable properties.
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