Disposed

FPA-PMLA-2609/MUM/2018 of Union Bank of India v. E.D., Mumbai

ATFP20 Mar 2025FPA-PMLA-2609/MUM/2018

Case brief

AI extract

What is this about?

The appellate tribunal disposed of an appeal filed by a bank seeking release of mortgaged properties attached under the PMLA. The court addressed the interplay between PMLA and SARFAESI acts for secured creditors.

What did the court decide?

Appeal disposed of with liberty for the bank to apply before the Special Judge to stake its claim as a secured creditor and auction the properties.

FPA-PMLA-2609/MUM/2018 of Union Bank of India v. E.D., Mumbai — Money Laundering | ATFP (2025)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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FPA-PMLA-2609/MUM/2018

Union Bank of India

Appellant

Versus

The Deputy Director Directorate of Enforcement, Mumbai … Respondent

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Advocates/Authorized Representatives who argued

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For the Appellant : Mr. Nishi Chaudhary, Adv. For the Respondent : Ms. N.K. Matta, Adv.

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CORAM SHRI G.C. MISHRA : MEMBER SHRI RAJESH MALHOTRA : MEMBER

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FINAL ORDER 20.03.2025

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Dictated by: Rajesh Malhotra

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Present appeal under Section 26 of Prevention of Money Laundering Act, 2002 (PMLA) is filed by the appellant against the order dated 29.08.2018 passed by the Adjudicating Authority in Original Complaint No. 916/2018 (OC) Zone Delhi, whereby it confirmed the attachment of the properties attached by ED in Provisional Attachment Order No. 01/2018 (PAO) dated 13.03.2018, detailed at page no. 43 to 48 of the impugned order. The properties mortgaged with the appellant bank are detailed as under:-

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LOT NO.1

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Khata no. 2307 bearing land no.10874, 10914, 10924, Khata no.1611 bearing land 10901, 10904, 10967 & Khata no.3068 bearing 1/10th part of Land No 10869, 10870, 10953, 10992, 10993, 10994 & Khata No.339 bearing 5/128th part of 10881, 10882, 10883, 10884, 10885, 10909, 10910, 10912, 10913 & Khata no.279 bearing Half Part of the land No.10961, 10963, 10965, 10966, 10875, 10906, 10916, 10923, 10953, 10970, 10962 & Khata no. 2314 bearing 3/8th part of the land No.10887, 10888, 10889, 10890, 10892, 10894, 10895, 10896, 10897, 10898, 10899, 10902, 10903, 10918, 10919, 10920, Khata No 2156 bearing land no.10875, 10876, 10906, 10916, 10923, 10953, 10961, 10963, 10965, 10966, 10970, & Khata no 1290 land No.10957&Khata No.2306 bearing land no.10938 & 10994 total admeasuring 18280 sq.mts situated at mauza Nauner, pargana, Tehsil & District Manipuri together with all the building, structures thereon attached to the earth fixtures & fitting constructed erected or installed thereon both then present and the future owned by the M/s Sai Foundations Pvt Ltd.

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LOT NO.2

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Khata no, 2196 bearing land no 10901, 10904, 10967 Khata no.338 bearing land no.10948, 10949, 10950, 10951, 10952, 10971, 10972, 10988, 10989,

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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Khatano 2374 bearing land No.10994, Khata No.1289, bearing land No.10891, khata no.1283 bearing 9/10th part of the land No.10880, Khata no.1290 bearing land No. 10874me, & half part of land No. 10886, 10957, Khata no.3068 bearing 4/5 part of Land No.10874Me, 10878, 10889, 10869, 10870, 10953, 10992, 10993, 10994 & Khata no.381 bearing 10893 & Khata No. 1289 bearing land no.10891 admeasuring 32590 sq. mts. situated at Muza Nauner, pargana Tehsil & district Mainpur together with all buildings, structure thereon attached to the earth, fixtures, constructed erected or installed thereon, both them present and future (owned by M/s Sal Foundation Pvt Ltd).

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LOT NO.3

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Khata no.339 bearing part of the LandNo. 10881, land No.10882, 10883, 10884, 10885, 10909, 10910, 10912 & 10913 admeasuring 0.344 Hectare out of the total 0.752, Hectare situated at Tehsil & District Manipuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd).

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LOT NO.4

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Khata No.2322 bearing Land No. 10967, 10874, Khata no. 2875 bearing land no.10900 Khata No. 2311 bearing 1/4th part of the land No. 10962 Khata N 0.381 bearing 2/3rd part of the land No. 10893 total admeasuring 10690 sq.mts. situated at mauza Nauner, paragana Tehsil & district Manipuri together with all buildings, structures thereon attached to earth, fixtures and fittings constructed erected or the installed thereon both then present and future(owned by M/s Sai Foundation Pvt Ltd).

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LOT NO. 5

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Khata No 2704 bearing part of the land No.10893, admeasuring 0.449 Hectare, Khata No.3068 bearing part of the land No. 10869, 10870, 10874, 10878, 10879, 10953, 10992, 10993, 10994 total admeasuring 1.433 Hectare out of which 1/5th 0.286 Hectare had been sold out of total 1.433 hectare thus total land 0.735 Hectare (7350 Sqmt.) situated at Mauza Nauner, Pargana, Tehsils District Manipuri together with all buildings, structure thereon attached to the earth, fixture and fittings, constructed erected or installed thereon, both then present and future(owned by M/s Sal Foundation Pvt Ltd).

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LOTNO.6

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Khatano.2875 bearing Land No. 10891 &Khata No.182 bearing Land No.10891 me total admeasuring 5420.sq.mts.situated at MuzaNauner, Pargana Tehsil &District Manipuri together with all building, structure, thereon attached to the earth fixture and fittings, constructed erected or installed thereon, both then present and future (owned by M/s Sal Foundation Pvt Ltd).

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LOT NO-7

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Khata No.1735 bearing 1/5th Part of the land No.10994, Khata No.3068 bearing Land No. 10869, 10870, 10953, 10992, 10993, 10994, situated at MuzaNauner, Pargana Tehsil & District Manipuri admeasuring 0.3378 Hectare out of total admeasuring 0.879 attached to the earth fixture and fittings, constructed erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd).

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LOT NO.8

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Khata no 3068 bearing part of 10869, 10870, 10953, 10992, 10993, 10994, Khata No, 596 Bearing land No.10872, 10907, 10911, 10949, 10953

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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admeasuring 0.4838 Hectare situated at MuzaNauner, Pargana Tehsil & District Manipuri attached to the earth fixture and fittings, constructed erected or installed thereon, both then present and future(owned by M/s Sai Foundation Pvt Ltd).

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LOT NO.9

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Land no. 10891 Me (having Khata no. 2770), Khata No. 2314 bearing land no. 10887 Me, 10888 Me, 10889 Me, 10890 Me, 10892 Me, 10894 Me, 10895 Me, 10896 Me, 10897 Me, 10898 Me, 10899 Me, 10902 Me, 10903 Me, 10914, 10919, 10920 Me total admeasuring 0.728 Hectare Khata No. 279 bearing no. 10961, 10963, 10965, 10966, 10875, 10906, 10916, 10923, 10953, 10970, land under Khata No. 2311 bearing No. 10962 and land under Khata No. 2156 bearing No. 10875 Me, 10876 Me, 10906 Me, 10916 Me, 10923 Me, 10953 Me, 10961 Me, 10963 Me, 10965 Me, 10966 Me, 10970 Me, land under Khata No. 1468 bearing No. 10868, 10871 total admeasuring 0.4926Hectare situated at Mauza Nauner, Pargana Teshil and district Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed erected or installed thereon, both then present and future (owned by M/s Sal Foundation Pvt Ltd)

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LOT NO. 10

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Khata No. 1468 bearing 2/6 part of land No. 10868 Me admeasuring 0.049 Hectare and land No. 10871 Me admeasuring 0.093 Hectare admeasuring 0.0473 Hectare out of total 0.142 Hectare situated at Mauza nauner, Pargana Tehsil and District Mainpuri together with all bulldings, structures thereon attached to earth, fixtures and fittings, constructed erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd)

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LOT NO. 11

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Khata No. 2527 bearing Half part of Land No. 10893 Me admeasuring 0.2835 Hectare l.e. 2835 sq. mts out of total 0.567 Hectare situated at Mauza Nauner, Pargana Tehsil and District Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or Installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd)

LOT NO. 12

LOT NO.13

Khata No. 1131 bearing part of Land No. 10994 Me admeasuring 1620 sq. mts out of total 0.405 Hectare situated at Mauza Nauner, Pargana Tehsil and District Mainpurl together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd)

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LOT NO. 14

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Kata No. 1131 Part of Land Gata No. 10994 Me admeasuring 2430 sq. mts out of total 0.405 Hectare situated at Mauza Nauner, Pargana Tehsil and district Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd)

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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LOT NO. 15

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Khata No. 596 bearing 1/4 part of Land No. 10872, 10907, 10911, 10949, 10953, 10964, admeasuring 0.164 Hectare (1640 Sq. mt.) situated at Mauza Nauner, Pargana Tehsil and district Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd).

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LOT NO. 16

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Khata No. 1336 bearing part of 10887 Me, 10888 Me, 10889 Me, 10890 Me, 10894 Me, 10895 Me, 10896 Me, 10897 Me, 10898 Me, 10899 Me, 10902 Me, 10903 Me, 10918 Me, 10919 tile 10920 Me, 10962 Me admeasuring 0.194 Hectare situated at Mauza Nauner, Pargana Tehsil and District Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd).

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LOT NO. 17

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Khata No. 1091 bearing part of Land No. 10983, Khta No. 1090 bearing Land 10994/0.004 Heс., 10994/0.024Нес., 10953, 10983 total admeasuring 0.066 Hectare (660 Sqmt.) situated at Mauza Nauner, Pargana Tehsil and District Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or installed thereon, both then present and future (owned by M/s Sal Foundation Pvt Ltd).

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LOT NO. 18

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Khata No. 1091 & 1090 bearing Land No. 10983, 10994/0.012Нес., 10994/0.064Нес., 10953, 10983 total admeasuring 0.182 Hectare (1820 Sqmt.) situated at Mauza Nauner, Pargana Tehsil and District Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd).

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LOT NO. 19

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Khata No. 596 bearing Land No. 10872 admeasuring 0.063 Hectare, Khata No. 1090 bearing Land No. 10907 admeasuring 0.031 Hectare, Khata No. 1091 bearing Land No. 10911 admeasuring 0.044 Hectare Khata No. 1336 bearing Land No. 10949 admeasuring 0.013 Hectare Land No. 10953 admeasuring 0.022 Hectare Land No. 10964 admeasuring 0.068 Hectare, Land No. 10944 admeasuring 0.0114 Hectare Land No. 10953, 10983 admeasuring 0.035 Hectare Land No. 10994 Me admeasuring 0.017 Hectare, Land No. 10887 Me admeasuring 0.011 Hectare, Land No. 10888 Me admeasuring0.001, 10889, Land No. 10890, admeasuring 0.004 Hectare Land No. 10894 Me admeasuring 0.006 Hectare Land No. 10895 Me admeasuring 0.003 Hectare Land No. 10896 Me admeasuring 0.010 Hectare Land No. 10897 Me admeasuring 0.008 Hectare Land No. 10898 Me admeasuring 0.004 Hectare Land No. 10899 Me admeasuring 0.009 Hectare Land No. 10902 Me admeasuring 0.001 Hectare Land No. 10903 Me admeasuring 0.011 Hectare Land No. 10918 Me admeasuring 0.009 Hectare Land No. 10919 Me admeasuring 0.003 Hectare Land No. 10920 admeasuring 0.004 Hectare Land No. 10962 admeasuring 0.006 Hectare admeasuring 0.299 Hectare 2990 sq.mts out of total 0.598 Hectare situated at Mauza Nauner, Pargana Tehsil and district Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or installed thereon, both then present and future (owned by M/s Sal Foundation Pvt Ltd).

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LOT NO 20

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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Khata No. 596 bearing half part of Land No. 10872 Khata No. 1090 bearing Land No. 10907, Khata No. 1091 bearing Land No. 10911, Khata No. 1336 bearing land No. 10949, 10953, 10964, 10953, 10983, 10994, 10983, 10994 Me, 10887 Me, 10888 Me, 10889, 10890, 10894 Me, 10895 Me, 10896 Me, 10897 Me, 10898 Me, 10899 Me, 10902 Me, 10903 Me, 10918 Me, 10919 Me, 10920 and 10962 admeasuring 0.299 Hectares (2990 Sqmt.) situated at Mauza Nauner, Pargana Tehsil and district Mainpuri together with all buildings, structures thereon attached to earth, fixtures and fittings, constructed, erected or installed thereon, both then present and future (owned by M/s Sai Foundation Pvt Ltd).

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LOT NO. 21

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Property bearing Office no.601, 602 & 603 covering area of 101.91sq Mts, 64.38 sq mts & 98.48 sq mts respectively, CTS NO.5846, ΙON 7, Pimpri waghere, Tauka haveli, District Pune owned by Mr Rajendra Singh Yadav & Rekha Rajendra Yadav which was attached by the Complainant in Exercise of the powers conferred under section 5(1) of PMLA Act, 2002 vide a Provisional Attachment Order No: MBZO-II/01/2018 dated 13-03-2018 even after the admission of the charge of the Appellant Bank as a secured Creditor nothing survives or no case for Provisional attachment under section 5(5) of the PMLA Act, 2002, is made out against the Secured Asset of the Appellant Bank. Hence the attachment is liable to be set aside/Quashand further was also secured by Freehold Premises situated on Plot No. 23 admeasuring area of 2060sq. mts at Mauza Kharpari, Mainpuri (near office of UP Bhoomi Sudhagar Nigam) Mainpuri & Free hold premises NO. 1340/1, admeasuring area of 16.26 sqmts situated on station road, Mahalla- Uttari Chapatti Manipuri, U.P owned by Rekha Rajendra Yadav and other mortgage properties were l.eOffice No.1 at third floor specific shopping mall on the premises No c1/16, sector No13 admeasuring area of 278.70 sq mts at karkunj Road, Pd. Deen Dayal Puram, Awas Vikas Colony, Loha Mandi Ward City, Agra owned by Ms Anju Agarwal, And Office no-2 Third floor specific shopping mall on premises No.C1/77, Sector No.13 admeasuring area of 278.70 sq mts at karkunj road, Pd.Deen Dayal Puram, Awas Vikas Colony, Loha Mandi, Ward City, Agra, owned by Mrs Shobha Agarwal for due repayment of the Loan amount M/s Sai foundation UnitSiddhant School of Medical Sciences & Hospital. A copy of the Memorandum of Deposit of Title Deeds of the Mortgage properties is annexed as ANNEXURE-6 of the appeal paper book.

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As per the facts of the case, Deccan Police Station, Pune registered an FIR No. 323/2015 dated 31.10.2015 on the basis of complaint filed by one Mr. Sachin Sonawane, Assistant General Manager of the Securities and Exchange Board of India (SEBI), Mumbai for offences punishable under Section 420, 120-B & 188 of the IPC, 1860 against M/s Samruddha Jeevan Foods India Ltd. (SJFIL), Pune, Mahesh Kisan Motewar, Pune, Mrs. Vaishali Mahesh Motewar, Ghanshyam J. Patel, Pune, Rajendra Pandurang Bhandare, Solapur, all Directors of M/s Samruddha Jeevan Foods India Ltd.

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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The SEBI had carried out the preliminary enquiry which revealed that SJFIL had collected money from the people under various schemes which were „Collective Investment Schemes‟ as per Section 11AA of the SEBI Act and the said company was collecting the deposits from the people without obtaining necessary permission from SEBI in violation of the provisions of Regulation 3 of SEBI (Collective Investment Schemes) Regulations, 1999. SJFIL, through its agents had offered more than 12% returns on the investments related to farming of goats & buffaloes and promised other number of benefits to their investors, which were not reasonable.

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During the investigations, it is revealed that SJFIL was prima facie engaged in fund mobilization activity from public by floating/sponsoring/ launching “collective investment scheme” without obtaining a certificate of registration from SEBI. It is further revealed that such schemes or arrangements were offered by SJFIL under the guise of „sale and purchase of livestock‟ and it was nothing but a smokescreen for its fund mobilization activity

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During the course of preliminary enquiry by SEBI, it is further revealed that M/s Samruddha Jeevan Foods India Ltd. and its directors had carried out their schemes and defrauded hundreds and thousands of innocent depositors from all over the country for the purpose of their hidden agenda. Mr. Mahesh Kisan Motewar, Mrs. Vaishali Mahesh Motewar, Rajendra Pandurang Bhandare and Ghanshyam J. Patel (now expired) were the then directors of SJFIL. They were looking after the day-to-day affairs of the company during the relevant period and had hatched a conspiracy in a planned manner and induced large scale illegal damage to the depositors and accrued illicit profit to themselves and hence, have committed offence under Section 420 and Section 120-B of the IPC, 1860.

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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Furthermore, Chatushrungi Police Station, Pune had registered FIR No. 384/2014 on 20.11.2014 and the said case was transferred to Criminal Investigation Department, (CID), Pune for further investigation. CID after investigation have filed Chargesheets bearing C.S. No. 92/2016 on 27.06.2016 and C.S. No. 154/2016 on 07.11.2016 against Mr. Mahesh Kisan Motewar, Mrs. Leena Mahesh Motewar, Mrs. Vaishali Mahesh Motewar and Mr. Rajendra Bhandare for commission of offences punishable under Sections 406, 409, 420 and 120-B of IPC, 1860 and Section 3 of Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 and Sections 3, 4, 5, 6 of Prize Chit and Money Speculation Schemes (Banning) Act, 1987.

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Accordingly, ED recorded ECIR No. 01/MBZO/2016 dated 12.01.2016 for initiating investigation for commission of offence of money laundering and trace out the proceeds of crime. During investigation, ED recorded the statement of the accused/suspected persons and others and also collected the documents from investigation agency, banks and other parties.

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The CID investigation revealed that the accused persons committed the fraud with the depositors to the tune of Rs. 3500 Crores and accordingly, ED attached the properties of the appellant to the extent of 101,30,61,441/(Rupees One Hundred and One Crore Thirty Lakh Sixty-One Thousand Four Hundred Forty-One), against the fraud of Rs. 3500 Crores. Thereafter, ED filed the Original Complaint No. 916/2018 before the Adjudicating Authority for confirmation of the PAO. Adjudicating Authority after perusal of the allegations mentioned in the OC coupled with the relied upon documents and statements u/s 50 issued the Show Cause Notice to the defendants. After receiving the replies and hearing the rival submissions, the Adjudicating Authority confirmed the PAO vide order dated 29.08.2018.

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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Aggrieved by the said order, the present appellant bank filed the present appeal qua the mortgaged properties.

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Ld. Counsel for the appellant bank submitted that the in the month of October, 2014, M/s. Sai Foundation Pvt. Ltd. approached the appellant for sanction and grant of Term Loan facilities to the tune of Rs. 35.00 Crores, Cash Credit Limit of 1.00 Crore and Bank guarantee of Rs. 4.00 Crore for Medical College project situated at Village Kharra, Shikohabad Road, Mainpuri, U.P. Hence, the appellant considering the request of the M/s Sai Foundation Pvt. Ltd. sanctioned the following credit facilities vide sanction letter dated 17.10.2014. However, later-on Term Loan amount of Rs. 22.54 Crores was only sanctioned by the Appellant Bank. M/s. Sai Foundation Pvt. Ltd. vide their board Resolution dated 17.10.2014 accepted all the terms and conditions of the sanction letter. A copy of Board Resolution of M/s Sai Foundation Pvt. Ltd. (Respondent) dated 17.10.2014, accepting the terms of sanction is annexed as Annexure A-4 of the appeal paper book. In respect of the said facilities and also to secure the amount outstanding under the said facilities, (M/s Sai Foundation Pvt. Ltd.) through Mr. Rajendra Singh, Atar Singh Yadav as authorized by M/s Sai Foundation Pvt. Ltd. vide Board Resolution dated 17.10.2024 executed the loaning and security documents in favour of the appellant bank. M/s. Sai Foundation Pvt. Ltd. had availed the credit facilities with the Union Bank of India for setting up Medical College project situated at Village Kharra, Shikohabad Road, Mainpuri, UP & accordingly to the business requirements, but the M/s Sai Foundation failed to keep the banking discipline. The M/s Sai Foundation Pvt. Ltd. stopped submitting the details of hypothecated goods, stocks, as well as book debts and failed to pay their dues as per the terms of agreement and repayment schedule as agreed, whereby present Appellant Bank requested the M/s Sai Foundation Pvt. Ltd. time and again to regularize their account and to

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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adhere to the norms of banking and maintain financial discipline, but all the efforts of the bank failed to make the M/s Sai Foundation Pvt. Ltd. regularize their account. Consequently, the accounts of M/s Sai Foundation Pvt. Ltd. have been classified by the Union Bank of India as Non-Performing Assets (NPA) on 31.05.2016 as per the direction of the Reserve Bank of India and internal guidelines of the appellant bank.

¶83

Thereafter, appellant bank issued a Notice u/s 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to M/s Sai Foundation Pvt. Ltd. dated 01.06.2016, calling upon the Respondent to discharge in full its liabilities by paying a sum of Rs. 10,39,07,175.50 together with contractual rate of interest from 01.06.2016 with monthly interest and as per the terms and conditions of the loan documents. Thereafter, appellant proceeded under the measures of Section 13(4) of the SARFASEI Act, 2002 and took the possession of the attached property on 30.08.2016 & 14.09.2016 under the provisions of Section 13(4) of SARFAESI Act, 2002. Ld. Counsel submitted that the very object of PMLA, 2002 is different from SARFAESI, 2002. However, Respondent ED in the present case under the garb of PMLA, 2002 is trying to confiscate the secured asset of the appellant.

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He further argued that appellant bank is a secured creditor and hence it is entitled to recover its dues from the mortgagees and guarantors by auctioning their properties. He further argued that appellant bank is ready to give an undertaking that in case any excess amount is realized after the auction of the mortgaged property, the same will be deposited with the ED by way of FDR. Prayer is accordingly made to allow the present appeal and release the aforementioned properties which have been mortgaged with the appellant bank.

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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On the other hand, Ld. Counsel for the Respondent ED strongly opposed the contention of the Ld. Counsel for the appellant bank and submitted that the properties were mortgaged during the period of commission of offence and the Respondent ED is entitled to attach the same. Ld. Counsel for the respondent ED submitted that the FIR was registered in the year 2015, when the loan was sanctioned by the appellant bank. Ld. Counsel for the respondent submitted that the statement of the appellant bank that SARFAESI provisions get precedence over provisions of PMLA is not correct, as PMLA is a special Act and proceedings under PMLA get precedence over other Acts in terms of Section 71 of the Act.

¶88

He also pointed out that the quantum of fraud is to the extent of ₹3500 crores, whereas the attached properties is only worth ₹101.3 crores. He further stressed that Ld. Special Judge, PMLA Court can dispose of the mortgaged properties after the conclusion of the trial, as per law. Prayer is accordingly made to dismiss the present appeal being devoid of any merits.

¶89

We have considered the rival submissions and we have given our thoughtful consideration to the same. We agree with the contention of learned counsel for Respondent ED that collusion of the officials of bank with the mortgagor M/s Sai Foundation Pvt. and its directors is not ruled out. However, this issue needs to be decided by learned Special Judge, PMLA Court, whether the appellant bank was part and parcel of any conspiracy for sanctioning and releasing the loan by taking the title deeds of the properties or not. However, being a secured mortgagee of the aforementioned properties, the appellant bank is at liberty to stake its claim before learned Special Judge, PMLA Court, u/s 8(5) to section 8(8) of the PMLA, 2002, with notice to the other secured and unsecured creditors and after seeing the role of present appellant, if any, for colluding with accused M/s Sai Foundation Pvt. and its directors. Appellant bank is also at liberty

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FPA-PMLA-2609/MUM/2018 Union Bank of India v. E.D., Mumbai

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to move application before Ld. Special Judge, PMLA Court, under section 8 (7) of PMLA, 2002, even before the conclusion of trial for auction of mortgaged properties, with an under taking to deposit the excess amount with ED by way of FDRs.

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In sequel to our discussion in the preceding para, the present appeal is hereby disposed of with liberty as aforesaid. It is made clear that nothing expressed herein will affect the right of either party in the criminal trials.

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Appeal Disposed of with direction.

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Pronounced on this 20^th Day of March, 2025.

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(Rajesh Malhotra) Member

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(G.C. Mishra) Member

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„AB‟

FPA-PMLA-2609/MUM/2018 of Union Bank of India v. E.D., Mumbai

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FPA-PMLA-2609/MUM/2018 of Union Bank of India v. E.D., Mumbai

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