M/S Wave Hospitality Pvt. Ltd vs Union Of India & Ors

Prathiba M. Singh, J

This hearing has been done through video conferencing.

The present writ petition has been filed by the Petitioner, under Article 227 of the Constitution, in view of the Appellate Tribunal under the

Prevention of Money Laundering Authority, 2002, not being currently functional due to non-filling of vacancies in the Tribunal.

The Enforcement Directorate had issued a Provisional Attachment Order PAO 1/2019 dated 28th March 2019 vide which the hotel Holiday Inn

located at Aerocity was provisionally attached to the tune of Rs. 120,20,46,003/-. The said attachment was confirmed by the Adjudicating Authority

vide its order dated 19th September 2019. The Petitioner has already preferred an Appeal under Section 26 of the PMLA before the Appellate

Tribunal for PMLA. Vide order dated 4th October 2019, status quo was granted by the Tribunal in the following terms:

“ The appellant undertakes that he will serve the notice to the R-5 at the earliest. Till the next date status quo shall be maintained as on

today by both the parties till the next date. However, the attachment shall continue.

Legal and constructive possession of the ED shall remain over the property in question. Appellant shall not transfer the property in question

in any manner directly or indirectlyâ€​

It is the case of the Petitioner that post the outbreak of the COVID-19 pandemic, considering the adverse effect of the same on the hospitality

sector, the Ministry of Finance, GOI launched the Emergency Credit Line Guarantee Scheme (`ECLGS’). As per the said Scheme, companies in

this sector could avail an additional credit facilities which would be fully guaranteed by the National Credit Guarantee Trustee Company Limited

(NCGTC). The Petitioner approached Yes Bank for availing of this credit facility which got an independent valuation of the property concerned. For

the facility to be released, since the property was already attached by the ED, approval of the Appellate Tribunal was required to be taken. For the

said purpose an application was moved before the appellate tribunal. However, due to lack of quorum the application could not be taken up for

hearing.

The limited prayer of the Petitioner in the present petition is for a direction to the Respondent- Enforcement Directorate (“EDâ€) to allow the

Petitioner for permission, to avail of the additional credit facility which has been sanctioned by the Respondent No. 3- Yes Bank, to the tune of the

amount which the Petitioner is eligible to avail of under the Emergency Credit Line Guarantee Scheme launched by the Government of India, in

respect of the Hotel Property (Holiday INN), which is situated at Asset Area 12, Aero-city, Delhi International Airport, New Delhi- 110037.

On 30th April, 2021, when the matter was listed before this Court, the counsel for the ED had sought time to seek instructions in the matter. On the

said date, ld. Counsel appearing for the Bank submitted that since there is already an attachment order, permission would be required from the

Appellate Authority under the PMLA, in spite of the loan having been sanctioned.

Today, Mr. Mahajan, ld. counsel, appears for the ED and submits that so long as the interest of the ED and the priority accorded to its interest, to

the extent of the attachment of Rs. 120,20,46,000/-, is not disturbed and is safeguarded, the ED would have no objection if a further loan facility of Rs.

25 crores, is extended to the Petitioner in respect of the subject property.

Mr. Tanveer Ahmed, ld. Counsel for the Petitioner, submits that the total attachment amount qua this property is only to the extent of

Rs.120,20,46,000/-, and the Yes Bank has already valued the property at Rs. 342.4 crores, through its own valuation agency, and has approved the

loan. However, the bank has submitted that the same is subject to the permission to be granted by the Appellate Tribunal, which is currently not

functional. Hence, he submits that this Court may grant the said approval.

On behalf of the Yes Bank it is confirmed to this Court by Mr. Khurana, ld. counsel, that if the permission is granted, the extent of loan facility

under the ECLGS scheme of National Credit Guarantee Trust Company Limited (hereinafter, “trustâ€), has already been approved by the bank

and shall be extended. He further submits that the ECLGS scheme is a Scheme which is guaranteed by the Government, as per the press release of

the Ministry of Finance dated 31st March, 2021.

This Court has considered the submission of the parties and perused the record.

A perusal of the order dated 19th September, 2019 passed by the Adjudicating Authority, shows that the extent of attachment by the ED, which

has been approved by the Adjudicating Authority, is to the tune of Rs.120,20,46,000/- crores. The relevant extract of the order of the Adjudicating

Authority reads as under:-

“Accordingly, the Hotel Holiday Inn at asset area 12 Aerocity Delhi have been provisionally attached for Rs. 120,20,46,000/- u/s 5(1) of

PMLA. Hence, the PAO deserves to be confirmed for attachment is hereby confirmed.â€​

Thus, the attachment of the subject property, for the said sum, has been confirmed by the Adjudicating Authority under Section 5(1).

The Petitioner intends to obtain a further loan facility under the scheme which is operated by the trust, and has approached the Yes Bank for the

same, vide application dated 18th November, 2020. Under the ECLGS Scheme, the Yes Bank has approved the said loan. However, one of the

conditions imposed by Yes Bank is as under:

“Approval from Appellate Tribunal for creation of 2nd charge for the facility being sanctioned under ECLGS scheme to be obtained prior to any

disbursement under the facilityâ€​

A perusal of the valuation report of the property, which is confirmed by the Yes Bank, shows that the total value attributed to the property is to the

tune of Rs. 342.40 crores, and the realisable value of the said property is Rs. 325.20 crores. The valuation report has been given by the CBRE, which

is a valuation & advisory services agency, and the said report has also been placed on record.

Considering the fact that the Yes Bank’s valuation of the property is to the tune of Rs.342.40 crores which is accepted by the bank and the

bank has approved the loan, and the attachment by the ED is to the tune of Rs.120,20,46,000/- crores, this Court grants permission to availing of the

loan under the ECLGS scheme.

As the Appellate Tribunal is not currently functional, the permission is being granted, considering the time sensitivity of the matter, as also the fact

that the Petitioner expresses an apprehension that if this loan is not granted, there is a threat to the continued operation of the hotel itself.

While maintaining the ED’s attachment order to the tune of Rs.120,20,46,000/- crores, and safeguarding the ED’s rights in respect of the

said attachment, permission is granted to the Petitioner to avail of the loan to the tune of Rs.25 crores under the ECLGS scheme, by creating a second

charge in respect of the subject property- Holiday INN, which is situated at Asset Area 12, Aero-city, Delhi International Airport, New Delhi-

110037. A detailed affidavit be placed on record along with the relevant documents before the Appellate Tribunal of the PMLA, in respect of the

facility sought, once the same is released along with the copies of the charge created. The PMLA shall consider the same and pass any further

orders, if required, in accordance with law.

The petition is disposed of in these terms.