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2019 (6) TMI 1206 - AT - Money LaunderingOffence under PMLA - attachment of property involved in “money laundering” - connection with the allegation of crime committed by the borrowers and other persons concerned involved for the offences of money-laundering - commission of offence under Section 420, 467, 468, 471 r/w 120-B of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 - HELD THAT:- Since the action taken by the Bank of India was in accordance with law and was prior to the proceedings initiated under PMLA Act, the proceedings initiated by the Bank of India under the Code is ought to be given precedence over the proceedings initiated under PMLA Act in respect of the aforementioned properties - The said position has been clarified by the Hon’ble High Court of Delhi in the matter of THE DEPUTY DIRECTOR DIRECTORATE OF ENFORCEMENT DELHI, UNION OF INDIA VERSUS AXIS BANK & ORS., STATE BANK OF INDIA & ORS. IDBI BANK LTD., PUNJAB NATIONAL BANK [2019 (4) TMI 250 - DELHI HIGH COURT] wherein it was held that the directions of such attachment under PMLA shall be valid and operative subject to satisfaction of the charge or encumbrance of such third party and restricted to such part of the value of the property as is in excess of the claim of the said third party. The rights of Appellant Bank being the secured creditor would survive in spite of the order of the attachment under PMLA remains operative. Therefore, the Appellant being the lawful mortgagee/transferee of the interest in the Subject Properties are entitled to recover its dues with the sale of the Subject Properties. The acquisition of such interest cannot be presumed to have been created with mala fide intent to defeat and/ or frustrate the proceeding under the PMLA Act and hence the said properties can be held to be “tainted property”. Since in the present case, the bona fide third party claimant, secured creditor, had initiated action in accordance with law for enforcement of interest prior to the order of attachment under PMLA, the PMLA attachment takes a back seat allowing the secured creditor to enforce its claim and only the remainder to be made available for purposes of PMLA. The properties in the present case are thus not liable to be attached even as “alternative attachable property”. In the present case once it has been showed by the Bank of India that proper due diligence was conducted before the properties/ assets were mortgaged to them, the properties thus cannot be attached, neither as a ‘tainted property’ nor as ‘alternative attachable property’ since it is nobody`s case that the secured creditor had not done the due diligence and/or the transactions were not legitimate. This Tribunal is of the considered opinion that the proceeding u/s 8 of PMLA,2002 before the Adjudicating Authority is a civil proceeding and the Adjudicating Authority should have stayed the proceedings on passing of the moratorium order by the NCLT. The continuation of the proceedings from the date of commencement of the moratorium order is contrary to the intention of the legislature hence the consequential order of confirmation of PAO is contrary to law - In the facts of the present case, it appears that hurdle has been created in the process after passing the order of NCLT which ought not to have been done. The question of registering ECIR does not arise. The passing of provisional attachment order was not application of mind and without consulting the facts and law. The period of continuation of proceedings before the Adjudicating Authority, PMLA, and before this Tribunal till the passing of the present judgment and order, from the date of commencement of the moratorium order, be treated as excluded while calculating limitation of the period of completion of the Corporate Insolvency Resolution Process. Appeal allowed - decided in favor of appellant.
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