INDIAN OVERSEAS BANK Vs. GOVERNMENT OF INDIA MINISTRY OF FINANCE ENFORCEMENT DIRECTORATE; KANNYA ELECTRONICS PVT LTD; B SUBASH; MAPLE EXIM LIMITED; MATHAN BALARAMAN

JUDGEMENT

(1.) The petitioner bank has filed this writ petition challenging the provisional attachment order dated 07.12.2015 issued by the first respondent by which the first respondent provisionally attached the sum of Rs.1.71 crore which is available with the petitioner bank for a period of 180 days in terms of Section 5 (1) of The Prevention of Money Laundering Act, 2002 (hereinafter referred to as The Act).

(2.) For disposal of this writ petition, certain facts which are necessary and germane are stated hereunder:-

(3.) When the writ petition is taken up for consideration, the learned counsel appearing for the petitioner would contend that the petitioner bank initiated proceedings under the SARFAESI Act against the property which was mortgaged with the petitioner bank. As against the said proceedings, the third respondent filed S.A. No. 97 of 2007 before the Debts Recovery Tribunal-II, Chennai contending that he has purchased the property. As against the same, the petitioner has filed CRP No. 839 of 2007 before this Court and it was allowed on 21.07.2007. Challenging the same, the third respondent filed Special Leave to Appeal No. 12617 of 2007 before the Honourable Supreme Court. While entertaining the Special Leave to Appeal, the Honourable Supreme Court directed the third respondent to deposit Rs.1,71,00,000/- with the petitioner bank and he has also deposited it. Ultimately, the Special Leave Petition was dismissed on 07.12.2007 thereby the action initiated by the petitioner bank has been held as valid and proper. At the time of dismissal of the Special Leave Petition, the Supreme Court directed the petitioner bank to refund the amount deposited by the third respondent to the tune of Rs.1,71,00,000/-. Accordingly, the petitioner bank refunded the sum of Rs.1,71,00,000/- deposited by the third respondent by a demand draft dated 31.01.2008, but the third respondent refused to receive it for the reasons best known to him. In the meantime, the fourth respondent availed certain credit facilities with the Hong Kong Bank of the petitioner's branch in which the respondents 2, 3 and 5 stood as guarantors. After availing the loan amount, the fourth respondent committed default which led to filing of a case in Civil Action No. 1892 of 2008 before the High Court of Hong Kong Special Administrative Region for recovery of US $ 937,908.02 with interest and costs and it was allowed on 29.10.2008. Thereafter, to enforce the said order passed by the Court at Hong Kong on 29.10.2008, the petitioner bank filed O.A. No. 95 of 2010 before the Debts Recovery Tribunal-I, Chennai. During the pendency of the said application the petitioner bank filed O.A. No. 95 of 2010 seeking permission of the Court to adjust the sum of Rs.1,71,00,000/- as the petitioner bank came to know that the sum of Rs.1,71,00,000/- deposited by the third respondent is part of the loan amount availed from their Hong Kong Branch by the fourth respondent. Further, during the pendency of the said application, the petitioner bank exercised its general lien over the sum of Rs.1,71,00,000/- and obtained an order from the Tribunal on 05.09.2012 for appropriation of the amount in part satisfaction of its dues. The Tribunal also issued a recovery certificate on 29.10.2014, while so, the impugned order of provisional attachment issued by the first respondent, purportedly on the ground that the amount was generated out of proceeds of crime is illegal.