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IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on : February 25, 2019/

March 27, 2019

Decided on : April 02, 2019

+

CRL.A. 143/2018 & Crl.M.A. 2262/2018

THE DEPUTY DIRECTOR DIRECTORATE

OF ENFORCEMENT DELHI

..... Appellant

Through:

Mr. Amit Mahajan, CGSC with

Mohammed

Faraz

&

Ms.

Mallika Hiremath, Advs.

versus

AXIS BANK & ORS

..... Respondents

Through:

Mr. Shri Singh, Advocate with

Mr. Pradyumna Sharma, Ms.

Maneka Khanna & Ms. Sayali

Kadu, Advocates for R-1.

+

CRL.A. 210/2018 & Crl.M.A. 3233/2018

THE DEPUTY DIRECTOR

DIRECTORATE OF ENFORCEMENT

..... Appellant

Through:

Mr. Amit Mahajan, CGSC with

Mohammed

Faraz

&

Ms.

Mallika Hiremath, Advs.

versus

STATE BANK OF INDIA & ORS

..... Respondents

Through:

Mr. Ankur Mittal, Advocate for

R-1.

+

CRL.A. 623/2018 & Crl.M.A. 10886-87/2018, 48245/2018

DEPUTY DIRECTOR DIRECTORATE

OF ENFORCEMENT

..... Appellant

Through:

Mr. Amit Mahajan, CGSC with

Mohammed

Faraz

&

Ms.

Mallika Hiremath, Advs.

versus

IDBI BANK LTD

..... Respondent

Through:

Mr. Ajay Bahl, Advocate with

Mr. Vikas Sharma, Advocate

+

CRL.A. 764/2018 & Crl.M.A. 28500/2018, 199/2019,

202/2019

UNION OF INDIA

..... Appellant

Through:

Mr. Amit Mahajan, CGSC with

Mohammed

Faraz

&

Ms.

Mallika Hiremath, Advs.

Versus

PUNJAB NATIONAL BANK

..... Respondent

Through:

Mr. Vipul Agarwal, Advocate

Mr. Rajesh Rattan Adv. for

PNB.

Mr. Jayant Mehta, Mr. Ashu

Kansal & Mr. Milan Singh

Negi, Advs. for Resolution

Professional.

+

CRL.A. 1076/2018 & Crl.M.A. 34565/2018, 34567/2018

DIRECTORATE OF ENFORCEMENT

.... Appellant

Through:

Mr. Amit Mahajan CGSC with

Mohammed

Faraz

&

Ms.

Mallika Hiremath, Advs.

versus

PUNJAB NATIONAL BANK & ANR

..... Respondents

Through:

Mr. Rajesh Rattan Adv. for

PNB.

Mr. Saumyen Das, Adv. for R-

2/DBS.

CORAM:

HON'BLE MR. JUSTICE R.K.GAUBA

J U D G M E N T

1.

These five appeals presented under Section 42 of the Prevention

of Money-Laundering Act, 2002 (“PMLA”, for short) against more or

less similar orders of the appellate tribunal (constituted under Section

25), such orders having been rendered on appeals of the respondents

(“banks”) vis-à-vis the orders of provisional attachment issued by the

enforcement officers under Section 5, as confirmed by the

adjudicating authority under Section 8, give rise, inter alia, to certain

common questions of law of import concerning nature of property that

may be attached under this special law as indeed the conflict arising

from claim of bonafide acquisition of interest by third parties. Hence,

they have been heard together and are being decided by this common

judgment.

THE ISSUES

2.

The measure of attachment of property involved in “money

laundering”, it essentially representing “proceeds of crime” (as

defined in law), is provided to ensure that the ultimate objective of

“confiscation” of such ill-gotten property be not frustrated, the power

and jurisdiction to order confiscation being vested in the Special

Court. As would be seen at length in later part of this judgment, the

provisions for attachment (followed by adjudication) leading to

confiscation are sanctions in addition to the criminal sanction

rendering the act of “money laundering” a penal offence (by virtue of

section 4). The order of “confiscation” of property attached under

PMLA takes away the right and title of its owner and vests it

“absolutely in the Central Government free from all encumbrances”

(Section 9).

3.

The appeals at hand relate to claims of entities other than the

persons in whose name the attached properties are held – to be

referred hereinafter as “third party” – such claims of the third party

emanating from charge, lien or encumbrances legitimately created. To

put it simply, the conflict meriting resolve here concerns the sovereign

authority of the Sta