Analysis of Delhi High Court Judgement in Directorate of Enforcement vs. Axis Bank & Anr.

The objective of PMLA being distinct from the purpose of RDBA, SARFAESI Act and Insolvency Code, the latter three legislations do not prevail over the former. By virtue of section 71, has the overriding effect over other existing laws in the matter of dealing with “money-laundering” and “proceeds of crime” relating thereto.

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).

(i).The process of attachment (leading to confiscation) of proceeds of crime under PMLA is in the nature of civil sanction which runs parallel to investigation and criminal action vis-a-vis the offence of money-laundering.

(ii)…

(iii)…

(iv)…

(v)…

(vi). The objective of PMLA being distinct from the purpose of RDBA, SARFAESI Act and Insolvency Code, the latter three legislations do not prevail over the former.

(vii). The PMLA, by virtue of section 71, has the overriding effect over other existing laws in the matter of dealing with ”money-laundering” and “proceeds of crime” relating thereto.

(viii). The PMLA, RDBA, SARFAESI Act and Insolvency Code (or such other laws) must co-exist, each to be construed and enforced in harmony, without one being in derogation of the other with regard to the assets respecting which there is material available to show the same to have been “derived or obtained” as a result of “criminal activity relating to a scheduled offence” and consequently being “proceeds of crime”, within the mischief of PMLA.

Judgement link : http://lobis.nic.in/ddir/dhc/RKG/judgement/02-04-2019/RKG02042019CRLA1432018.pdf