Allowed

FPA-PMLA-1616/DLI/2017 of Punjab National Bank & Ors. v/s The Deputy Director Directorate of Enforcement, Delhi & Ors.

ATFP27 Feb 2017FPA-PMLA-1616/DLI/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal considered applications for condonation of delay in appeal and for a stay on possession notices. The Tribunal stayed the operation of possession notices issued under PMLA, 2002 regarding mortgaged properties of bank borrowers involved in money laundering proceedings.

What did the court decide?

Stayed the operation of possession notices issued under section 8(4) of the PMLA.

FPA-PMLA-1616/DLI/2017 of Punjab National Bank & Ors. v/s The… — Money Laundering | ATFP (2017)

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APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI

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MP-PMLA-3237/DLI/2017 MP-PMLA-3087/DLI/2017(COD) &

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FPA-PMLA-1616/DLI/2017

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Punjab National Bank & Ors. … Appellants/Applicants Versus The Deputy Director Directorate of Enforcement, Delhi & Ors … Respondents

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Advocates/Authorized Representatives who appeared

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For the appellant : Shri Ravi Verma, Advocate For the respondent : Shri Nitesh Rana, Advocate

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CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI KAUSHAL SRIVASTAVA : MEMBER SHRI ANAND KISHORE : MEMBER

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ORDER

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27.02.2017

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MP-PMLA-3087/DLI/2017 (COD)

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This is an application filed by the applicant for condonation of delay of 58 days in filing the appeal. The prayer is initially opposed on behalf of the respondent. After small hearing learned counsel stays that incase heavy costs is imposed, the delay be condoned. Thus for the reasons stated in the application the learned counsel for the respondent the delay is condoned subject to the post of Rs. 25,000/- i.e. One thousand each appellant. The cost be paid within six weeks from today.

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The application is disposed of.

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FPA-PMLA-1616/DLI/2017

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Issue notice to the respondent. Mr. Nitesh Rana, learned counsel for

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the respondent accepts the notice and seeks time to file the reply. Reply be

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FPA-PMLA-1616/DLI/2017

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Page 1 of 4

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filed within six weeks with an advance copy to the counsel for the appellant who may file the rejoinder within four weeks thereafter.

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List on 14^th July, 2017.

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MP-PMLA-3237/DLI/2017

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The present application has been filed under section 26(4) of the Prevention of Money Laundering Act, 2002 read with section 151 of the Civil Procedure Code, 1908 for stay of possession notice under section 8(4) of the PMLA, 2002 alongwith the affidavit. The appellant has filed the copy of the possession notice received under section 8(4) of the PMLA, 2002 from the respondent no. 1. Issue notice to the respondent. The learned counsel for the respondent orally opposed the prayer therefore same is being decided. The brief facts are that the Appellant No. 1 Bank is a body corporate constituted under the Banking Companies. The Appellants no. 2 to 21 are members of consortium of banks that granted credit facilities to Respondent No. 4 who have authorized to file the appeal through the appellant, being the Lead Bank.

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The appellants no. 21 to 25 are members of the Consortium of banks, also led by appellant no. 1 herein, the sanctioned credit facilities to M/s SVIL Mines Ltd., a group company of Respondent No. 4.

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The Respondent No. 2 & 3, namely Mr. Rajiv Jain and Mr. Sanjay Jain are the directors of the Respondent no. 4 company and also stood as guarantors for the repayment of the loan amounts sanctioned and disbursed by the appellant banks to the respondent No. 4 Company and M/s. SVIL Mines Ltd., by way of personal guarantees. Respondent No. 5 is a group company of Respondent No. 4, which also executed a corporate guarantee to secure the aforesaid credit facilities. Respondent No. 6 & 7 are also part of the consortium of banks of Respondent no. 4 company

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FPA-PMLA-1616/DLI/2017

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Page 2 of 4

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and are thus, pro forma Respondents for the purpose of the instant appeal.

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The Respondent no. 4 company (hereinafter referred to as “the Company”) approached various banks from time to time to avail credit facilities to meet its working capital requirement for running/expansion of its business. Pursuant to the individual sanction letters issued by the various banks, the Company executed individual and joint loan documents with each of the member banks from time to time. In order to secure the credit facilities extended by the secured creditors, the Respondent No. 4 Company and its directors, being Respondent no. 2 & 3 herein, executed various security documents in favour of its secured creditors including submission of title documents for certain immovable properties for creation of equitable mortgages in respect of such properties owned by each of them from time to time. The immovable properties, which are attached by way of the Impugned Order, were also mortgaged by the Respondent Nos. 2 to 4 with the appellant, as early as in year 2005 and thereafter in 2007 (for property at S.No. 2 in the table hereinbelow) and thereafter, in 2008 (for property at S.No. 3). As per the records submitted to the Respondent No. 1.”

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The details of the mortgaged properties are mentioned by the appellant in para 3 in the ground of the appeal.

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The learned counsel for the appellant submits that the possession of the said property even otherwise cannot be taken as all the properties except S. No. (i) para 5 of the application are in possession of the Official Liquidator attached to the Hon‟ble High Court of Delhi. In case the possession is taken by the respondent grave prejudice would be caused to the appellant who is given loan for thousand of crores to the Respondent

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FPA-PMLA-1616/DLI/2017

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Page 3 of 4

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No. 2 to 4; the said amount has not been paid by them further the except one property out of all the properties are mortgaged with the bank.

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There is a force in the submission of the learned counsel for the appellant who has made a strong prima facie case in its favour. The balance of convenience also lies in favour of the appellant. Thus, it is directed that till the disposal of the appeal the operation of the possession notices issued by the respondent under section 8(4) shall remain stayed.

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10. M.P. is disposed of.

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(Justice Manmohan Singh) Chairman

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(Kaushal Srivastava) Member

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(Anand Kishore) Member

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New Delhi,

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27^th February, 2017