TMI Blog2017 (12) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue. The impugned order is completely silent and has been passed without even considering the documents and explanation provided by the appellants by way of reply and compilation as filed before the Adjudicating Authority.Prima facie, the provisional attachment order as well as the impugned order is an arbitrary order passed by the Adjudicating Authority whereby five (5) properties of the appellants have been attached, without any cogent reason or any basis. In view of the above, the appeal is allowed the impugned order is set aside. The matter is remanded back to the Adjudicating Authority for re-hearing after issuing the notice to all banks and shall consider and discuss the reply filed by the appellant and to be filed by the banks before passing the order on merit. Since, it is an important matter, the final order be passed within 180 days from today. - MP-PMLA-2079/AHD/2015 (Mics.) MP-PMLA-1854/AHD/2015 (Stay) & FPA-PMLA-973/AHD/2015 - - - Dated:- 13-12-2017 - Justice Manmohan Singh Chairman And Shri Anand Kishore Member For the Appellant : Shri Pawan Narang, Advocate Shri Sanjay Bhatt, Advocate Shri Abhishek Anand, Advocate For the Respondent : Shri Vikas G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling post-harvest short term loans on the basis of forged and fabricated documents without any genuine trade transactions/genuine business. The accused persons cheated the Oriental Bank of Commerce thereby causing wrongful loss to the bank to the tune of ₹ 100 crores (approx.). (iii) RCBSM2011E0001 dated 05.01.2011 was registered by CBI, BS FC, Mumbai under Sections 420, 467, 468, 471 read with 120 (B) of IPC on the written complaint of Shri S. Bharatkumar, D.G.M., Bank of Maharashtra, Ahmedabad region. The allegations in the complaint discloses that S/Shri Bharatkumar M. Kapadia, Chairman, Rajesh M Kapadia, Managing Director and others of M/s Biotor Industries Limited, Vadodara along with Village Level Aggregators (VLAs) entered into criminal conspiracy to commit the offence of cheating, forgery of valuable securities, forgery for cheating and using false documents as genuine etc. against the Bank of Maharashtra and to cause pecuniary advantage to M/s Biotor Industries Limited, Vadodara in the matter of availing post- harvest short term loans on the basis of forged and fabricated documents without any genuine trade transactions/genuine business. The accused persons cheate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw material/finished goods obtained finances in different manner. In this way, the charged persons hatched the conspiracy in connivance with each other by making false documents and submitting them as a genuine to the banks and thereby misappropriated ₹ 2,21,47,00,000/- or more and in this way committed the offence; (ii) That some of the accused persons working in the accounts department of M/s Biotor Industries Limited were authorized to sign cheques up to ₹ 1 crore as authorized signatory by the company and by misusing the authority, on the basis of the goods which was never received in the company, made payments through cheques to different merchants which enabled M/s BIL to get farmer funding from the banks; (iii) That M/s Biotor Industries Ltd. (M/s BIL) had obtained short term loan (Farmers Funding) in the name of bogus farmers from various banks viz. ₹ 100 crores from Oriental Bank of Commerce (OBC Bank), Ashram Road Branch, Ahmedabad 380009, which was credited in the M/s BIL‟s Management and Collection Agent Account (M C account). Various accounts in the name of actual and bogus Village Level Aggregators (herein after referred as VLA‟) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Adjudicating Authority has not considered the said important fact while passing the impugned order. 8. The details of the such said property are given below:- Description of Property Year when Property was acquired Plot No. 14 and 14-A, Petrochemical Complex (A B), Village Ranoli, District Vadodara 2006 Industrial Land and Construction Property at Block No. 558 Part, 560 Part, 561 Part, 562/A, 562/B, 563, 564, 566, 567 Part, 578, 580, 581 Admeasuring in all 1,42,523 Sq. Mtrs. And Construction thereon admeasuring 15,512 Sq. Mtrs. Situated at Itola-Padra Road, District- Vadodara 2005 Ekalbara Block No. 495-P and R.S. No. 369/1, Village Ekalbara, Taluka-Padra, District Vadodara 2006 Hill Park, Flat No. 4, 3 rd Floor, Bldg. No. 1, Alexandar Graham Bell Road, Malabar Hill, Mumbai 2004 Makarpura Plot No. 117, Village Vadsar, Makarpura Industrial Estate, GIDC, Vadodara 2005 From the above, it is apparent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15,512 Sq. Mtrs. Situated at Itola- Padra Road, District- Vadodara 2005 08/09/2009 30/09/2009 25/10/2010 05/11/2011 15/11/2011 Ekalbara Block No. 495-P and R.S. No. 369/1, Village Ekalbara, Taluka-Padra, 2006 23/11/2006 24/07/2007 25/10/2010 05/11/2011 15/11/2011 District Vadodara 07/07/2009 Hill Park, Flat No. 4, 3rd Floor, Bldg. No. 1, Alexandar Graham Bell Road, Malabar Hill, Mumbai 2004 09/08/2004 25/10/2010 09/08/2012 Makarpura Plot No. 117, Village Vadsar, Makarpura Industrial Estate, GIDC, Vadodara 2005 29/12/2009 04/11/2010 19/01/2011 16/11/2011 (Physical possession was taken by Bank) 14. (i) The details of mortgage created in respect of each property in favour of the Banks, which is tabulated herein belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bell Road, Malabar Hill, Mumbai Lenders (Consortium) Date of Mortgage Created Amount Secured (in crores) State Bank of India (Lead Bank) 09.08.2004 4.77 (v) Makarpura Plot No. 117, Village Vadsar, Makarpura Industrial Estate, GIDC, Vadodara Lenders (Consortium) Date of Mortgage Created Amount Secured (in crores) Allahabad Bank 06.01.2010 ₹ 50.00 15. Section 5 (1) is reproduced herebelow:- Section 5 Attachment of property involved in money- laundering - (1) Where the Director, or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty. Incase both proviso are read together under section 5, the appellant under any circumstances could not have dispose of the properties once those are already mortgagee in the reply filed by the appellant to the notice issued under section 8 of Act. 17. The case of the Appellant is closely similar to the case decided by this Tribunal on dated 14.07.2017 in State Bank of India and Ors. Vs. The Joint Director, Directorate of Enforcement, Kolkata. In Paragraphs 46 and 47 of the Judgment, this Tribunal found that the attached property was purchased much prior to the period when the facility of offending loans were sanctioned to the borrowers. Further, the Bank was not involved in the schedule offence. It was further observed that the mortgaged properties are security to the loans and cannot be subject matter of attachment particularly when the same were purchased and mortgaged prior to the events of funds diversion and frauds committed by the borrowers. A completely same scenario exists in the present case also where the Appellant is a bona fide lender and the properties in question have been originally purchased, much before the offending transactions took place. The contents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y means of which he has acquired the property attached under sub-section (1) of section 5, or, seized under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. (2) The Adjudicating Authority shall, after- (a) considering the reply, if any, to the notice issued under sub- section (1); (b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf, and (c) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Adjudicating Authority whereby five (5) properties of the appellants have been attached, without any cogent reason or any basis. 24. It is a matter of fact that on default of repayment by the appellant company, the Banks had already on 25.10.2010 called upon appellant no. 1 company to repay the due amount, which the appellant no. 1 company failed to pay and thereby the banks became entitled to enforce the security interest i.e. the immovable properties of appellant company in terms of Section 13(4) of SARFAESI Act. The banks have already taken the necessary steps. 25. Counsel for the respondent gave the suggestion that this appellate tribunal may implead the all banks as parties and their concerns may be considered. We are of the view that the said suggestion of the respondent cannot be accepted as there were no pleading of any nature either before Adjudicating Authority or before us, as admittedly, neither any notice was issued nor any opportunity of hearing was granted to the banks. 26. In view of the above, the appeal is allowed the impugned order is set aside. The matter is remanded back to the Adjudicating Authority for re-hearing after issuing the notice t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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