Ld. Counsel for the appellant argued that the subject case is only manipulation of entries and fraud being played within the banking system and the origin of the fund is from a public undertaking. The money received by the Appellant Bank which ought to have been deposited in the account of NCL has landed in the account of Mr. T.V. Krishna Rao on account of commission of fraud by the accused persons. Hence, the appellant bank was duty bound to compensate M/s NCL alongwith interest, and accordingly, it stepped into the shoes of M/s NCL. The right to confiscate the property is available to the ED only in the cases where there is no actual owner of the same, as in cases of accumulation of proceeds of crime from the commission of offences like extortion, NDPS, illegal arms and ammunition, disproportionate assets to the known sources of income, contract killings, terrorist activities, smuggling etc. In the present case, since the actual owner of the funds is available, there is no question to confiscate the same by the ED. As far as the bank is concerned, the bank has right to recover the lost property by the application of the concept of doctrine of tracing back. Ld. Counsel for the appellant submitted that the action of the authorities would only result in enlarging the non-performance account of the Bank and would result in great loss for want of liquidity of funds, which cannot be made good. Prayer is accordingly made to allow the present appeal.
