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
This is a digitally signed order.
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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 9This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/03/2026 at 20:47:13
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 9This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/03/2026 at 20:47:13 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 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/03/2026 at 20:47:13
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 of CRL.A. 85/2020 & CRL.A. 86/2020 Page 5 of 9 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/03/2026 at 20:47:13 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 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/03/2026 at 20:47:13 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 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/03/2026 at 20:47:13 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 9This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/03/2026 at 20:47:13
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 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/03/2026 at 20:47:13