Delhi High Court – Orders
Deputy Director, Directorate Of … vs Punjab National Bank on 19 March, 2026
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~47 & 48
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL.A. 85/2020 & CRL.M.A. 1367/2020, CRL.M.A. 3492/2022
DEPUTY DIRECTOR, DIRECTORATE OF
ENFORCEMENT .....Appellant
Through: Mr. Zoheb Hossain Spl. Counsel for
DoE, Mr. Vivek Gurnani Panel
Counsel for DoE, Mr. Pranjal Tripathi,
Mr. Kanishk Maurya, Mr. Kaushalesh
Pandey LC for ED Ms. Akshita
Chaubey, Adv. (M: 9873340111).
versus
PUNJAB NATIONAL BANK
.....Respondent
Through: Ms. Nishi Chaudhary & Ms.
Yashartha Gupta, Advs. for PNB.
48
+ CRL.A. 86/2020 & CRL.M.A. 1370/2020
DEPUTY DIRECTOR, DIRECTORATE OF ENFORCEMENT
.....Appellant
Through: Mr. Zoheb Hossain Spl. Counsel for
DoE, Mr. Vivek Gurnani Panel
Counsel for DoE, Mr. Pranjal Tripathi,
Mr. Kanishk Maurya, Mr. Kaushalesh
Pandey LC for ED Ms. Akshita
Chaubey, Adv. (M: 9873340111).
versus
PUNJAB NATIONAL BANK .....Respondent
Through: Ms. Nishi Chaudhary & Ms.
Yashartha Gupta, Advs. for PNB.
CRL.A. 85/2020 & CRL.A. 86/2020 Page 1 of 9
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CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE MADHU JAIN
ORDER
% 19.03.2026
1. This hearing has been done through hybrid mode.
CRL.A. 85/2020 & CRL.M.A. 1367/2020, CRL.M.A. 3492/2022
2. The present appeal has been filed under Section 42 of the Prevention of
Money Laundering Act, 2002, inter alia, assailing the impugned order dated
6th August, 2019 passed by the Appellate Tribunal, PMLA.
3. The brief background in CRL.A. 85/2020 is that, a criminal complaint
was filed by the Serious Fraud Investigation Office (hereinafter, ‘SFIO’)
being Criminal Complaint No. 57463/2016 dated 29th November, 2016 under
Section 120-B read with Sections 420, 468 and 477A of the Indian Penal
Code, 1860 and Section 628 read with Sections 211/233 & 240(3) of
Company’s Act, 1956 before the Additional Chief Metropolitan Magistrate,
Tiz Hazari Courts, Delhi. This criminal complaint was filed based on an
investigation that was conducted and matter was taken up by the Enforcement
Directorate, Delhi Zonal Office-II and ECIR No. 0l/DLZO-II/2017 dated 11th
February, 2017 was recorded for investigation. It was revealed that there was
a possible offense of money laundering.
4. Pursuant thereto, investigation was carried out by the Enforcement
Directorate. Thereafter, a provisional attachment order bearing PAO No.
05/2017 dated 14th March, 2017 along with corrigendum dated 5th April,
2017 was passed by the Directorate of Enforcement, Delhi Zonal Office-II
under the Prevention of Money Laundering Act, 2002 (hereinafter, ‘PMLA’)
(hereinafter, ‘provisional attachment order’).
CRL.A. 85/2020 & CRL.A. 86/2020 Page 2 of 9
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5. The subject property which was attached by the provisional attachment
order was Plot No. 04, Sector 13, Dwarka, New Delhi where the Radisson Blu
Hotel is located (hereinafter, ‘the subject property’). It is alleged that there
was material evidence to believe that the subject property was involved in
money laundering to the extent of Rs. 64.70 Crores. Thereafter, a complaint
being Original Complaint No. 713/2017 was filed by the Directorate of
Enforcement before ld. Adjudicating Authority, PMLA for confirmation of
the provisional attachment order.
6. The Adjudicating Authority, PMLA vide order dated 10th August,
2017 confirmed the provisional attachment order.
7. Subsequently, an appeal was filed by the Punjab National Bank before
the Appellate Tribunal, PMLA. Vide the impugned order dated 6th August,
2019, the provisional attachment order was set aside.
8. The primary ground on which the same appears to have been set aside
is that the ‘PNB consortium’ had a charge on the subject property through a
borrower namely M/s Divine Infracon Pvt. Ltd. who had obtained certain loan
facility. Punjab National Bank was the lead bank which was part of the ‘PNB
consortium’ and it had initiated proceedings under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002 (hereinafter, ‘SARFAESI Act, 2002‘) against M/s Divine Infracon Pvt.
Ltd. in respect of the loan qua the subject property.
9. The appeal before the Appellate Tribunal, PMLA challenging the
attachment order, was filed by the Punjab National Bank on the ground that it
held the first charge on the subject property and, therefore, the provisional
attachment of the subject property deserves to be set aside.
10. The amount that was stated to be due by the M/s Divine Infracon Pvt.
CRL.A. 85/2020 & CRL.A. 86/2020 Page 3 of 9
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Ltd in favour of the ‘PNB Consortium’ was to the tune of Rs. 401.84/- crores.
Since there was a default in payment, the recovery proceedings had been
initiated by the ‘PNB Consortium’ before the Debt Recovery Tribunal-I,
Delhi, under which the subject property was attached.
11. The PMLA, Appellate Tribunal primarily took into consideration the
fact that the Directorate of Enforcement had only attached the subject
property. However, the prior charge and encumbrance of the secured creditors
would not be rendered illegal. Accordingly, the PMLA Appellate Tribunal
had recorded in the impugned order dated 6th August, 2019 as under:-
“[…]
25. As per settled law that the appellant bank is the
rightful claimant of the attached property, which are
already in the possession of the Appellant bank since
July 2015 under the SARFAESI Act. The legal right
under SARFAESI is taken away from the Appellant Bank
by the Enforcement Directorate vide provisional
attachment Order No.08/2016 dated 30-09-2016. The
Respondent failed to understand that the Appellant Bank
has stakes in the attached Hotel Raddison Blu prior in
time. Therefore, the Appellant Bank has the right to
recover the loan amount against the mortgaged
Property under law. The valuable right will be lost if the
Order of attachment would continue. The impugned
order passed by Respondent would cause miscarriage of
justice if it is not set-aside.
XXX
27. The Respondent does not have any lien over the said
Property as the Appellant bank is now the Legal
transferee of said Property. The Respondent cannot
retain the property over which they have no legal title
and the property is to returned to the persons lawfully
entitled as the bank is the victim and even after trial.
xxx xxxx xxxx xxx
CRL.A. 85/2020 & CRL.A. 86/2020 Page 4 of 9
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30. As such, in the present case once it has been
showed by the Bank of India that proper due diligence
was conducted before the properties/ assets were
mortgaged to them, the properties thus cannot be
attached, neither as a ‘tainted property’ nor as
‘alternative attachable property’ since it is nobody`s
case that the secured creditor had not done the due
diligence and/or the transactions were not legitimate.
31. It is the case of appellant that the appellant before
seeking to create a mortgage of the afore-mentioned
properties had conducted due diligence of the purchase
of the properties and upon being satisfied that the
properties are in no way tainted and or benami got
created mortgage in favour of the Appellant. No
contrary evidence is available on record to show that
the mortgaged properties were purchased from proceed
of crime.
32. The attachment of the encumbered property by
Respondent No. 1 treating to be tainted is not valid
argument if the bonafide third party claimant (as
aforesaid) is a “secured creditor”, pursuing
enforcement of “security interest” in the property
(secured asset) sought to be attached, it being an
alternative attachable property (or deemed tainted
property), it having acquired such interest from
person(s) accused of (or charged with) the offence of
money-laundering (or his abettor), or from any other
person through such transaction (or inter-connected
transactions) as involve(s) criminal activity relating to
a scheduled offence, such third party (secured creditor)
having initiated action in accordance with law for
enforcement of such interest prior to the order of
attachment under PMLA, the directions of such
attachment under PMLA shall be valid and operative
subject to satisfaction of the charge or encumbrance ofCRL.A. 85/2020 & CRL.A. 86/2020 Page 5 of 9
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such third party and restricted to such part of the value
of the property as is in excess of the claim of the said
third party. In the situations covered by the preceding,
the bonafide third party claimant shall be accountable
to the enforcement authorities for the “excess” value
of the property subjected to PMLA attachment.
Counsel for the appellant is agreeable to deposit the
excess value with the respondent no. 1.
Therefore, it is not possible to hold that the mortgaged
properties claimed by the Appellant in no way can be
considered to be “Proceed of Crime” under Section 2(u)
of PMLA. The impugned order does not disclose any
reasoning. There is no application of mind whatsoever
and it is assumed that the properties in question are the
proceeds of the crime. There is no reasoning to show
as to how the attached properties mortgaged prior to
the date of alleged offence are the subject matter of
proceeds of crime. The Adjudicating Authority has not
analysed the facts at all. The order suffers from a
fundamental error. There is no understanding by the
Adjudicating Authority of the contents of the statute,
much less its application to the facts of the case.
xxx xxxx xxxx xxx
36. The Appellant undertakes to deposit any amount
realized, which is in excess of its outstanding dues,
with the ED if such situation would arise….”
12. A perusal of the impugned order would show that the Appellate
Tribunal, PMLA proceeded with the fact that since the Punjab National Bank
as also the ‘PNB consortium’ had a charge over the subject property, it had
the right to take possession and realise the value of the subject property. The
impression that was conveyed before the Appellate Tribunal, PMLA was that
the Punjab National Bank would take steps to redeem the mortgage and,
thereafter, if any excess amount was recovered, the same would be deposited
CRL.A. 85/2020 & CRL.A. 86/2020 Page 6 of 9
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with the Directorate of Enforcement.
13. Thus, on this basis the provisional attachment order was set aside by
the Appellate Tribunal, PMLA.
14. However, what has transpired subsequently is that, Punjab National
Bank has on the basis of a one-time settlement, given a No objection
Certificate to the concerned borrower to auction the subject property and has
collected a sum of Rs.350/- crores and the charge on the subject property has
been released by the Punjab National Bank.
15. Mr. Zoheb Hussain, ld. Counsel for the Directorate of Enforcement
submits that the Punjab National Bank has completely acted contrary to the
undertaking given before the Appellate Tribunal, PMLA and the subject
property has now been released without any amount being deposited with the
Directorate of Enforcement.
16. Further, it is also submitted by ld. Counsel that the subject property has
been sold at Rs.161/- crores, whereas the admitted market value at the relevant
point in time, as admitted by one Shri. Sant Lal Aggarwal, the Director of M/s
Jagat Overseas Pvt. ltd., is that the subject property was worth Rs.800/- crores.
17. Ms. Nishi Chaudhary, ld. Counsel for the Punjab National Bank
submits that the Bank was permitted in law to enter into a one-time settlement.
She further contends that it was only if any excess amount was realised, that
the amount had to be deposited with the Directorate of Enforcement. The
Bank, merely collected the amount of Rs. 350/- crores which was a reduced
amount payable to the Bank. Hence, no fault can be attributed to the Punjab
National Bank.
18. Heard. The turn of events in the present case clearly shows how the
Directorate of Enforcement and the Punjab National Bank, have been at
CRL.A. 85/2020 & CRL.A. 86/2020 Page 7 of 9
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loggerheads over the subject property which has been sold, without the
knowledge of the Directorate of Enforcement.
19. Mr. Shri Sant Lal Aggarwal, Director of M/s Jagat Overseas has stated
in the proceedings before the Appellate Tribunal as under:
“11. That pursuant to order dated 06.08.2019,
whereby the PAO(s) and consequential order of
confirmation stood quashed by this Hon’ble Tribunal,
PNB disposed of/alienated the subject property to M/s
NRV Hospitality Private Limited, vide Sale Deed dated
21.03.2023 bearing no. 7176 in Book no. 1 Volume No.
8814 Page No 114 to 140, to recover the entire dues.
{Copy of No dues of Consortium Member Banks are
Annexed herewith as Annexure No. 2 (Colly)}.”
20. Thus, there is lack of clarity as to who has sold the subject property,
how the dues came to be realised by the banks and whether the undertakings
given by the Punjab National Bank to the Appellate Tribunal, PMLA were
violated.
21. Under these circumstances, it is deemed appropriate to implead the
following parties as Respondents.:
i) Name: Shri Sant Lal Aggarwal;
Address: R/O D-31, Pushpanjali Enclave, Pitampura, Delhi-
110034
ii) M/s Jagat Overseas Pvt. Ltd.
Address: Hotel Radisson, Dwarka, New Delhi
iii) M/s Divine Infracon Private Limited;
Address: Plot No. 45, Sector-13, Dwarka City Centre, New Delhi
22. The said Respondents shall also be impleaded as Respondents in
CRL.A. 86/2020 as well.
CRL.A. 85/2020 & CRL.A. 86/2020 Page 8 of 9
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23. Let an amended memo of parties be filed by the Appellants in both of
the appeals being CRL.A. 85/2020 and CRL.A. 86/2020. Upon an amended
memo of parties being filed, let Court notice be issued to all the newly
impleaded Respondents.
24. The newly impleaded Respondents upon being served, are at liberty to
file their affidavits responding to allegations made in the present cases.
25. List both these matters on 19th May, 2026.
PRATHIBA M. SINGH, J.
MADHU JAIN, J.
MARCH 19, 2026
MR/SM
CRL.A. 85/2020 & CRL.A. 86/2020 Page 9 of 9
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