Disposed

FPA-PMLA-1426/HYD/2015 of State Bank of India v/s The Joint Director, Directorate of Enforcement, Hyderabad

ATFP4 May 2017FPA-PMLA-1426/HYD/2015

Case brief

AI extract

What is this about?

The Tribunal heard an appeal by State Bank of India against an Adjudicating Authority order under the Prevention of Money Laundering Act. The Bank filed the appeal with an eight-month delay citing internal administrative errors. The Tribunal allowed the condonation of delay subject to costs and listed the case for final hearing.

What did the court decide?

Condonation of eight months delay in filing appeal allowed subject to payment of Rs. 25,000 costs; matter listed for final hearing on 21.08.2017.

FPA-PMLA-1426/HYD/2015 of State Bank of India v/s The Joint… — Money Laundering | ATFP (2017)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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MP-PMLA-2701/HYD/2016 (COD)

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FPA-PMLA-1426/HYD/2015

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State Bank of India … Appellant/Applicant Versus The Joint Director, Directorate of Enforcement, Hyderabad … Respondent

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Advocates/Authorized Representatives who appeared

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For the appellant : Ms. Tarunika Gupta, Advocate For the respondent : Shri Neeraj Atri, Advocate CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI KAUSHAL SRIVASTAVA : MEMBER SHRI ANAND KISHORE : MEMBER

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ORDER 04.05.2017

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MP-PMLA-2701/HYD/2016 (COD) in FPA-PMLA-1426/HYD/2015

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The State Bank of India has filed the above mentioned appeal under section 26(1) of PMLA, 2002 challenging the impugned order dated 20^th October, 2015 passed by the Adjudicating Authority. Alongwith the appeal, the application for condonation of delay of eight months has also been filed.

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The prayer is opposed on behalf of the respondent who has filed his reply. The main grounds mentioned from para 2 to 5 in the said application are reproduced here below:-

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“2. That in the present case the allegations of the Respondent No. 1 are that the Respondent No. 2 Company has crime under the Environment Protection Act by storing about 40000 MTS of the hazard waste in the premises which was supposed to be disposed off by Treatment Storage

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MP-PMLA-2701/HYD/2016 (COD) in FPA-PMLA-1426/HYD/2015

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Disposal Facility. The said waste was negligently stored in the open yard which was leeched by rain water and carried down to the stream, which severally polluted and the aqua life of the area was totally perished. The stream was declared unfit for human use. It was further alleged that the polluted water has also damaged the soil rendering it unfit for agriculture. As per the Respondent No. 1 by not getting the waste treated the Respondent No. 2 has earned / saved Rs. 5 crores and has attached the 7 properties belonging to the Respondents, despite knowing very well that these properties are already transferred by the respective owners by way of mortgage to the Appellant Bank, the Appellant Bank has already taken the action under the SARFAESI Act and even has taken the symbolic possession of the properties. The action of the ED has stopped the process of recovery of the dues of the Bank.

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3. That the Appellant Bank has received the Notice from the Id. Adj. Authority and appeared in the matter. The reply was filed by the Bank and the matter was argued vehemently. On 29.9.2015 the matter was heard and the order was reserved. On the behalf of the Bank, its counsel in Delhi had been appeared and even has filed the Vakalatnama. The details of the Counsel for the Appellant were available with the Ld. Adj. Authority, however, the Ld. Adj. Authority has not preferred to send the copy of the impugned order to the Counsel. The copy of the order was sent by the Registrar, Adj. Authority to the Branch of the Bank. The same was received at the Branch on 27.10.2015 at the receipt and dispatch section of the Branch. The concerned Clerk at the Bank failed to put up this order to the AGM/Branch Manager of the Branch and kept the order in the file. Because of this mistake the order has lost the attention of the concerned authorities. It was only in or about 28.7.2016 the order come to the notice of the concerned Manager and the AGM of the Branch. The matter was immediately taken up with the Central Office at Mumbai of the Bank for consultation with the Legal Department of the Bank. The Legal Department opined the filing of the Appeal and accordingly, the Counsel was engaged and the Appeal was fiied without wasting of any time.

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4. That the period of limitation for filing the Appeal is 45 days from the date of the receipt of the order which has expired on 11.12.2015. The period of limitation available to the Bank for filing the Appeal was upto 11.12.2015, as the copy of the order was received on 27.10.2015. Hence, there is delay of 8 months in filing the Appeal.

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5. That the delay in filing the Appeal is because of the mistake of the concerned clerk at the Branch and also on account of multilayer decision taking process.”

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The learned counsel on behalf of the respondent submits that neither valid reasons has been explained in the application nor the

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MP-PMLA-2701/HYD/2016 (COD) in FPA-PMLA-1426/HYD/2015

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sufficient cause in para 3 & 4 details reply are given. On merits, the case of the appellant is that the appellant has sanctioned the loan from the respondent no. 2 and in lieu thereof certain property are mortgaged. The appellant bank has also taken action under the SARFAESI Act and has even taken the symbolic possession of the properties. The action of the ED has stopped the process of recovery of the dues of the Bank.

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The appellant counsel has referred the decision of the Supreme Court in the case of Tukaram Kana Joshi & Ors. Thr. Power of Attorney Holder Vs. M.I.D.C and Ors. in para no. 11, 12 & 13 reads as under:

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“11. The question of condonation of delay is one of discretion and has to be decided on the basis of the facts of the case at hand, as the same vary from case to case. It will depend upon what the breach of fundamental right and the remedy claimed are and when and how the delay arose. It is not that there is any period of limitation for the Courts to exercise their powers under Article 226, nor is it that there can never be a case where the Courts cannot interfere in a matter, after the passage of a certain length of time. There may be a case where the demand for justice is so compelling, that the High Court would be inclined to interfere in spite of delay. Ultimately, it would be a matter within the discretion of the Court and such discretion, must be exercised fairly and justly so as to promote justice and not to defeat it. The validity of the party's defence must be tried upon principles substantially equitable. (Vide: P.S. Sadasivaswamy v. State of T.N. MANU/SC/0373/1974 : AIR 1974 SC 2271; State of M.P. and Ors. v. Nandlal Jaiswal and Ors. MANU/SC/0034/1986 : AIR 1987 SC 251; and Tridip Kumar Dingal and Ors. v. State of West Bengal and MANU/SC/8382/2008 : (2009) 1 SCC 768;)

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12. No hard and fast rule can be laid down as to when the High Court should refuse to exercise its jurisdiction in favour of a party who moves it after considerable delay and is otherwise guilty of laches. Discretion must be exercised judiciously and reasonably. In the event that the claim made by the applicant is legally sustainable, delay should be condoned. In other words, where circumstances justifying the conduct exist, the illegality which is manifest, cannot be sustained on the sole ground of laches. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in the injustice being done, because of a non-deliberate delay. The court should not harm innocent parties if their rights have infact emerged, by delay on the part of the

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MP-PMLA-2701/HYD/2016 (COD) in FPA-PMLA-1426/HYD/2015

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Petitioners. (Vide: Durga Prasad v. Chief Controller of Imports and Exports and Ors, MANU/SC/0004/1968 : AIR 1970 SC 769; Collector, Land Acquisition, Anantnag and Anr. v. Mst. Katiji and Ors. MANU/SC/0460/1987 : AIR 1987 SC 1353; Dehri Rohtas Light Railway Co. Ltd. v. District Board, Bhojpur and Ors. MANU/SC/0110/1993 : AIR 1993 SC 802; Dayal Singh and Ors. v. Union of India and Ors. MANU/SC/0058/2003 : AIR 2003 SC 1140; and Shankara Co-op Housing Society Ltd. v. M. Prabhakar and Ors. MANU/SC/0564/2011 : AIR 2011 SC 2161)

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13. In the case of H.D Vora v. State of Maharashtra and Ors. MANU/SC/0309/1984 : AIR 1984 SC 866, this Court condoned a 30 year delay in approaching the court where it found violation of substantive legal rights of the applicant. In that case, the requisition of premises made by the stated was assailed.”

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We appreciate the arguments on behalf of both the parties. We are

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of the view that in view of the merits of the appeal, the hearing is necessary. Thus, the prayer made in the application of condonation of delay is allowed subject to the cost of Rs. 25,000/- which shall be paid by the appellant within four weeks to the learned counsel for the respondent.

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