BENGALURU: The Karnataka High Court upheld the order passed by the Appellate Tribunal, which quashed the orders of attachment passed by the Enforcement Directorate (ED) and the confirmation order passed by the Adjudicating Authority, regarding the attachment of the properties which were pledged by the borrowers to obtain credit from a bank.
The high court said that the properties which can prima facie be said to be the properties acquired from the proceeds of the crime can only be subjected to the attachment proceedings under the Prevention of Money Laundering Act (PMLA).
The properties offered as collateral security against the loans, which have been found not to be sufficient, could not be described as proceeds of crime as defined under Section 2(u) of the PMLA.
These properties had not been acquired from the proceeds of the crime and cannot be confiscated by the Centre, the court added.
The division bench of Justice D K Singh and Justice Venkatesh Naik T passed the order by dismissing the appeals filed by the ED against the order dated September 18, 2017, passed by the Tribunal under the PMLA on the appeals filed by the accused challenging the provisional attachment of properties and confirmation.
