Since 2017, Union Bank of India has been embroiled in a legal struggle to reclaim a mortgaged property—an expensive farmhouse in Delhi. However, the bank is now facing a powerful opponent, not the original loan defaulter, but the Enforcement Directorate (ED).
According to a report from The Indian Express, the farmhouse currently serves as the Gurugram Zonal Office of India’s anti-money laundering agency, the ED. The property, valued at ₹120 crores, has become the subject of a legal battle between the bank and the ED.
The case, Union Bank of India vs Assistant Director, Directorate of Enforcement, is currently pending before the Punjab and Haryana High Court. The bank has challenged a Panchkula Court’s decision to confiscate the property under the Prevention of Money Laundering Act (PMLA).
Origins of the Dispute
The controversy dates back to 2012 when ABW Infrastructure, led by Director Atul Bansal, availed credit facilities from Corporation Bank, which later merged with Union Bank of India in 2020. Wisdom Realtors, the actual owner of the farmhouse since purchasing it in 2004, served as a corporate guarantor for ABW Infrastructure’s loan. Atul Bansal was also a director at Wisdom Realtors, and the farmhouse was one of the assets mortgaged to secure the loan.
In 2015, ABW Infrastructure’s account was declared a non-performing asset (NPA). In 2016, the bank issued a demand notice for ₹121 crores and initiated recovery proceedings. While Wisdom Realtors managed to delay the bank’s actions temporarily, the Debts Recovery Appellate Tribunal (DRAT) in 2019 allowed the bank to proceed with auctioning the farmhouse to recover outstanding dues under the SARFAESI Act.
ED’s Involvement
The Enforcement Directorate got involved in December 2018, attaching the farmhouse as part of a money laundering investigation linked to a land scam in Manesar, Haryana. ABW Group, owned by Atul Bansal, was implicated in the scam, where villagers were allegedly forced to sell land at throwaway prices under the threat of government acquisition.
The ED attached several properties belonging to Bansal and his companies, worth ₹399 crores, claiming they were “proceeds of crime.” Bansal and his wife were declared proclaimed offenders, and the ED sought confiscation of the properties under PMLA.
The bank contested the ED’s claim, arguing that the farmhouse was purchased before the alleged offenses occurred, making it unrelated to the money laundering case. Additionally, the bank maintained that it had taken symbolic possession of the property in 2017 as a legitimate third-party claimant with a secured interest.
In May 2022, a special court rejected the bank’s objections, ruling that the PMLA took precedence over the SARFAESI Act. The bank then approached the Punjab and Haryana High Court to challenge the confiscation.
Current Status
In July 2023, the ED raised a preliminary objection, arguing that the bank’s revision plea was not maintainable. However, the High Court ruled in favor of the bank, stating that the trial court’s order had reached finality, making the criminal revision plea valid. The case is now set for its next hearing on October 22.
This complex legal battle between Union Bank of India and the Enforcement Directorate continues to unfold, with high stakes surrounding the ownership and rightful possession of the valuable farmhouse.
