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2019 (6) TMI 1150 - AT - Money LaunderingProvisional order of attachment of properties mortgaged with the Appellant RIICO - Nexus with the crime committed by the borrowers - reasons to believe - offences under section 120 B, 420, 467, 468, 471, 472 and 474 of IPC and section 13(2) r/w 13(1) (d) of PC Act by CBI, BS & FC - HELD THAT:- 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 this tribunal is only exclusively having jurisdiction to examine the validity of attachment and to decide the same under section 26 of the Act as to whether attachment was valid or not. The bank and financial institution are entitled to take the remedy before the Special Court after the decision of appeal or during the pendency of appeals. The Appellant has nothing to do and has no connection with the allegation of crime committed by the borrowers. Bank is 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 a innocent person who is not involved in the crime within the meaning of Section 2 (u) read with Section 3 of the Act. The appellants are not charge sheeted nor any prosecution complaint has been filed against the appellants - There is no nexus whatsoever, between the alleged crime and the appellants who are mortgagee of the properties and is a victim of the fraud and is innocent party. The definition of proceed of crime as per Section (u) of the Act comprises of the property which is derived or obtained as a result of criminal activities. The mortgaged properties are not acquired from proceed of crime. The Appellant is a Government Company and attachment of these properties would deprive the Appellant from recovering the due amount, which in turn would be a loss of public money. In the appeal filed by Gangwal Real Estate LLP, he said party through its counsel has made the statement to deposit the entire alleged proceed of crime i.e. ₹ 7.37 crores with the respondent without prejudice. The impugned order is set-aside with regard to attachment of properties mortgaged with the appellant - rest of the attachment shall continue - appeal allowed.
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