Provisional attachment of proceeds of crime upheld where bank funds were diverted through bogus loans and used to acquire properties.

Provisional attachment under the Prevention of Money Laundering Act was sustained because the attached properties were prima facie traced to diverted bank funds, routed through bogus loan accounts, and used to acquire immovable assets later treated as collateral security. The tribunal held that the preventive attachment power protects property linked to proceeds of crime, and the appellant's claim of bona fide conduct in the course of bank duties did not rebut the material showing involvement in money laundering. It also clarified that findings in attachment proceedings do not ermine criminal liability in the pending prosecution and cannot justify release of the properties at that stage.

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Issues: Whether the confirmation of provisional attachment under the Prevention of Money Laundering Act, 2002 was sustainable on the basis that the attached properties represented proceeds of crime and whether the appellant's plea of bona fide action in the course of bank duties entitled him to relief.

Analysis: The attachment power under the Act is preventive and is exercised to preserve property derived from criminal activity relating to a scheduled offence. The material relied upon showed that funds of the bank were diverted through bogus loan accounts, the amounts were used to acquire immovable properties in the name of a customer, and those properties were subsequently dealt with as collateral security. The appellant's contention that he acted in the bank's interest did not dislodge the prima facie finding that the properties were traced to diverted funds and were involved in money laundering. The Tribunal also held that findings recorded in attachment proceedings do not determine criminal liability in the pending prosecution and cannot be used to seek release of properties at this stage.

Conclusion: The attachment was rightly confirmed and the appeal failed.

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