Disposed

FPA-PMLA-2058/LKW/2017 of Bajaj Finance Ltd. v/s The Joint Director Directorate of Enforcement, Lucknow

ATFP20 Nov 2017FPA-PMLA-2058/LKW/2017

Case brief

AI extract

What is this about?

This appeal was filed under section 26 of the PMLA Act. The appellant argued that the Adjudicating Authority failed to follow a prior Tribunal judgment where the attachment of bona fide lender's property was set aside. The court issued notice, granted a stay on the impugned order, and listed the matter for final disposal.

What did the court decide?

Issued notice to respondent; stay of the operation of the impugned order pending final disposal.

FPA-PMLA-2058/LKW/2017 of Bajaj Finance Ltd. 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-3975/LKW/2017 (Stay) FPA-PMLA-2058/LKW/2017

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Bajaj Finance Ltd. … Appellant/Applicant Versus

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The Joint Director Directorate of Enforcement, Lucknow … Respondent

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Advocates/Authorized Representatives who appeared

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For the appellant : Mr. Rajshekhar Rao, Advocate Mr. K. Harshavardhan, Advocate For the respondent : Mr. Vikas Garg, Advocate CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI ANAND KISHORE : MEMBER

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ORDER 20.11.2017

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FPA-PMLA-2058/LKW/2017

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The present appeal has been filed under section 26 of the PMLA

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Act against the order dated 13.09.2017 passed by the Adjudicating Authority.

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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

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FPA-PMLA-2058/LKW/2017

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Page 1 of 3

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not involved in the schedule offence. It was further observed that

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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 of said properties 46 and 47 are reproduced:-

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“46. In the present case, it is undisputed facts that the attached property were purchased much prior to the period when the facility of loan sanctioned to the borrowers. The banks while rendering the facilities were boanfide parties. It is not the case of the respondent that the attached properties were purchased after the loan was obtained. The mortgaged of the properties were done as bonafide purposes. None of the bank is involved in the schedule offence. No PMLA proceedings are pending except the complainant bank was arrayed as Column;-11 at the time of framing charges. Union Bank of India has not granted sanction against its employee to proceed against him in criminal complaint. There is no criminal complaint under the schedule offence and PMLA is pending against the two banks. In case of failure on the part of borrowers to comply with the terms of settlement, the contempt proceedings are maintainable in the Court where the settlement was recorded.

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47. In view of the entire gamut of the dispute, we are of the considered opinion that the conduct of the banks are always bonafide. Both banks are innocent parties. They were legally entitled to inform the Adjudicating Authority about their innocence and they rightly did so but their contention was rejected as appeared from the impugned order.”

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The said Judgment passed by us has not been considered and followed by the Adjudicating Authority. It is a very serious matter. The Authority is supposed to give due respect to the judgment of the higher Authority and Courts. The said judgment was passed by referring the decisions of Supreme Court, Full Bench of the High Court of Madras and other High Court. But the same has not been discussed at all.

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FPA-PMLA-2058/LKW/2017

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Page 2 of 3

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However, it appears to us, in many matters, the judgments of the

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Tribunal and higher courts are not being followed. The member who has passed the impugned order is not a judicial member, he should here consulted at least the member (legal) before ignoring the judgment of higher authority and courts.

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Issue notice of the appeal. Mr. Vikas Garg, Counsel for the respondent accepts the notice and seeks time to file the reply. Let the reply be filed within four weeks with an advance copy to the counsel or the appellant.

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