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2019 (4) TMI 137 - AT - Money LaunderingOffence under PMLA - provisional attachment order - proceeds of crime - Appellant Bank priority over the mortgaged property - Attaching the mortgaged properties without any valid reasons - HELD THAT:- In order to recover the monies taken by the Respondent Nos. 5&6, the only recourse the Bank has is the Mortgaged properties and if the same is attached the Bank will have no other recourse and will lose large amounts without any fault of the Bank. The consequence of the attachment would be borne by the general public and depositors. The Bank in its usual course of business provides finance and credit facilities to its customers. The Appellant Bank has therefore no reason to doubt the source for which the money has been borrowed by the Bank. Respondent Nos. 5&6 had approached the Appellant Bank in the year 2015 and requested the Appellant and Bank of India to constitute a consortium for sum of ₹ 91.00 Crores (Rupees Ninety One Crores only) on the terms and conditions contained in the respective sanction letters of the said banks and also the terms and conditions contained in the working capital Consortium Agreement dated 13.03.2015 entered into by and among the borrower and the said banks. If the bank is an innocent party and victim from the hand of borrowers, who mortgaged the properties which were not acquired from the proceed of crime, being a secured creditors, the mortgaged properties cannot be attached equivalent to the value thereof if the said properties are not purchased from the proceed of crime or as a result of criminal activity at the time of sanctioning the loan. The finding of both authorities are against law for attaching the mortgaged properties without any valid reasons. Banking system cannot be destroyed in this manner. It is settled law that the money advanced by them for the purchase of the property cannot be taken to be the proceeds of crime. The Adjudicating Authority is obliged to record a finding to that effect and to allow the provisional order of attachment to lapse. Otherwise, a financial institution will be seriously prejudiced - impugned order of attachment is set aside.
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