Upon execution of a mortgage, a lender believes that a valid
security is in place and could be enforced if the borrower defaults
in repayment. The question lies – How enforceable is it when
it comes to intervention from the enforcement directorate in
respect of the mortgaged property which is a ‘Tainted
Property'?
The Prevention of Money Laundering Act, 2002
(PMLA) came into force on July 1, 2005 and was
enacted by the Central Government with the principal objective to
prevent money-laundering and to provide for confiscation of
property derived from, or involved in, money-laundering.
The scheme of PMLA is broadly two-fold in as much as it (a)
allows for attachment of property if it is a proceed of crime to
fulfil the ultimate objective of confiscation, upon adjudication;
and (b) provides criminal sanction to the act of money laundering
as a penal offence. The application of the PMLA finally results in
confiscation of property, which takes away the right and title
