SAFEMA Tribunal affirms ED’s PMLA attachment despite Indian bank mortgage, citing lack of registration and due diligence.
Indian Bank Mortgage Fails to Defeat PMLA Attachment
The SAFEMA Tribunal has upheld the Enforcement Directorate’s provisional attachment of properties under PMLA, despite claims by an Indian bank of a prior mortgage over the assets.
The Tribunal found that the bank failed to register the charge under Section 77 of the Companies Act and had not conducted adequate due diligence before advancing loans. Further, the proceeds of crime were traced directly to the acquisition of the attached properties, giving ED priority under Section 5(1) of PMLA.
This reinforces the primacy of PMLA attachments over civil claims where benami or illicit funds are involved. Lenders must ensure strict compliance with charge registration and KYC norms to preserve their secured creditor status during enforcement actions.
Citations
- PMLA, 2002, Section 5(1)
- Companies Act, 2013, Section 77
