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2017 (10) TMI 1128 - AT - Money LaunderingAppeal under section 26 of Prevention of Money Laundering Act, 2002 - Provisional Attachment - Held that:- The Adjudicating Authority (PMLA), while passing the Impugned Order, did not consider the judicial precedents cited by the appellant on the above propositions of law asserting the supremacy and priority of the charge/rights of the appellants (being Secured inconsistency between the two, before giving an overriding effect to the non obstante clause. Neither the respondent no. 1 nor the Adjudicating Authority (PMLA) have indicated what "law" was being overridden by their use of Section 71 of the Act, and how such law was inconsistent with the provisions of the PMLA, 2002. The objectives of the PMLA, 2002 do not detract or derogate from the protection of legitimate transactions and financial assets as afforded by legislation such as the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The learned Adjudicating Authority (PMLA) has failed to appreciate that the definition of “proceeds of crime” and/or “value thereof” has no application to the facts of the present case inasmuch as in the present case, the legitimacy of the transaction entered into between the Appellant and the Respondent No. 7 is not in dispute. Therefore, the attached vehicle being the subject matter of the Loan Facility which predates the allegations of money laundering against the Respondent No. 7, is clearly identifiable and admittedly, not having been obtained or derived out of any criminal activity, does not fall within the definition of “proceeds of crime” or “value thereof”. Adjudicating Authority (PMLA) has not understand that the Loan Facility provided by the Appellant to the Respondent No. 7 for purchase of the attached vehicle is public money and not proceeds of crime or value thereof. Thus, no order can be passed by the Respondent No. 1 prejudicing the genuine business transaction of the Appellant Bank. The impugned order is patently illegal and not sustainable in law. We set-aside the Impugned order dated May 31, 2017 confirming the Provisional Order passed by the Respondent No. 1/Directorate of Enforcement with respect and limited to the attachment of the vehicle AUDI Car Model-A3 35 TDI DL 2CAT 4920; and also provisional attachment order no. 01/2017 dated January 27, 2017 passed by the Respondent No. 1/Directorate of Enforcement with respect to and limited to the attachment of the vehicle AUDI Car Model-A3 35 TDI DL 2CAT 4920; and also provisional attachment order no. 01/2017 dated January 27, 2017 passed by the Respondent No. 1/Directorate of Enforcement with respect to and limited to the attachment of the vehicle AUDI Car Model-A3 35 TDI DL 2CAT 4920. The vehicle in question shall be returned to the appellant forthwith who is entitled to disposed of and after adjustment of loan amount party, the appellant is entitled to file the recovery of balance amount as per law.
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