FPA-PMLA-382/BNG/2012 of Smt. Nasreen Taj v/s The Deputy Director Directorate of Enforcement, Bangalore & The Manager, Syndicate Bank
Case brief
What is this about?
The Madras High Court held that loan proceeds from a bank cannot be treated as 'proceeds of crime' even if obtained through a conspiracy between borrowers and bank staff, as the bank remains an innocent third party and the funds are public money not tainted by the crime. The Court ruled that mortgaged properties cannot be attached under the PMLA. Furthermore, the confirmatory attachment order was struck down because the Adjudicating Authority failed to serve a statutory notice to the bank under Section 8 of the PMLA to allow it to prove the innocence of the assets. The provisional attachment and confirmation order were quashed.
What did the court decide?
The impugned confirmation order and provisional attachment were set aside and quashed. It was clarified that the order is limited to the legality of attachment and is without prejudice to pending criminal cases.