MUMBAI, June 6 -- A special Prevention of Money Laundering Act (PMLA) court on Friday allowed restoration of assets worth around Rs.252 crore attached by the Enforcement Directorate (ED) to a UCO Bank-led consortium of lenders in the Gangakhed Sugar and Energy Ltd (GSEL) money laundering case, holding that the banks were victims of the alleged offence and had a legitimate interest in the properties as secured creditors. GSEL promoter and RSP MLA Ratnakar Gutte was one of the accused in the money laundering case. Apart from UCO Bank, the consortium included Union Bank of India, Punjab National Bank, IDBI Bank and the Indian Renewable Energy Development Agency (IREDA). The assets that were provisionally attached in December 2020 included land parcels, factory buildings, sugar, distillery and co-generation plant machinery, bank balances and equity shares. The UCO Bank-led consortium informed the court that it had extended term loans and working capital facilities to GSEL between 2008 and 2015, which were subsequently enhanced to Rs.541.68 crore and secured through registered mortgage deeds, hypothecation agreements and consortium arrangements. Special judge Mahesh K Jadhav noted that the consortium's lending transactions predated the ED's attachment of assets and the banks had acted bona fide. It further recorded that the ED had no objection to the lenders recovering funds allegedly misappropriated by the accused, after the agency said it had been making "continuous efforts for restitution of properties to the rightful owners and victims of money laundering". The court noted that the consortium's claims were backed by registered mortgages and recovery proceedings before the Debt Recovery Tribunal, and it was entitled to recover about Rs.854.87 crore under tribunal proceedings. "The applicant bank has a legitimate interest in property mentioned at schedule-A as a secured creditor and applicant bank has suffered loss as a result of the offence," the court said. The lenders had acted in good faith, had suffered losses despite having taken all reasonable precautions and were not involved in the offence of money laundering, the court noted. It directed release of the attached properties in favour of the consortium, subject to an undertaking to restore the assets or their value if so directed during the course of the proceedings. The money laundering case stems from allegations that GSEL and its promoters obtained crop loans worth Rs.772.31 crore from the consortium between 2012-13 and 2016-17, of which a big part was routed through fictitious farmer accounts and siphoned off....