Union Bank of India Vs Deputy Director Directorate of Enforcement (Appellate Tribunal Under Safema At Delhi)
Bank’s Mortgage Rights Yield to Money-Laundering Attachment- PMLA Overrides SARFAESI- Secured Creditors Can’t Trump PMLA: SAFEMA Tribunal Follows SC’s NSEL Verdict
The Appellant – Union Bank of India – challenged the order dated 24.06.2016 passed by the Adjudicating Authority (AA) under the Prevention of Money Laundering Act, 2002 (PMLA), confirming the Provisional Attachment Order (PAO) dated 04.08.2014. The case pertained to a housing loan of ₹11.57 crore granted by the Bank in 2012 to Shri Surender Gupta & Smt. Sheetal Gupta for purchasing a residential flat at 194, Block 172, Jor Bagh, New Delhi. The borrowers defaulted in paying EMIs from March–April 2015. When the Bank’s officials sought repayment, they discovered that the property had been attached by the Enforcement Directorate (ED) under PMLA & also under the Maharashtra Protection of Interest of Depositors (MPID) Act, 1999. Union Bank filed a Miscellaneous Application before the Adjudicating Authority contending that the mortgaged property was not “proceeds of crime” & should be released. The AA, however, dismissed the application on 24.06.2016, leading to this appeal.
Grounds of Appeal by the Bank
Prior Mortgage: The property was already mortgaged with the Bank prior to its attachment; thus, ED’s action prejudiced a bona fide secured creditor.
