Provisional attachment under money laundering law sustained where reasons to believe and supporting material were recorded, with limited possession relief granted.

Provisional attachment under the Prevention of Money Laundering Act was treated as sustainable where the authority had recorded reasons in writing and relied on material such as the charge-sheet and investigation record. The Tribunal noted that sections 5 and 8 allow provisional attachment and adjudication, and that prohibitory directions may be issued during investigation to preserve the property. A plea of bona fide purchase did not defeat attachment at that stage, and the retrospectivity argument failed because the scheduled offences were already included from 1 June 2009 and the relevant transaction steps were later. Limited interim possession was nevertheless allowed on monthly deposit terms pending the Special Court proceedings.

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Issues: (i) Whether the confirmation of provisional attachment under the Prevention of Money Laundering Act, 2002 was vitiated for want of jurisdiction, absence of reason to believe, the appellant's alleged bona fides, or the plea of retrospectivity. (ii) Whether the appellant was entitled to retain possession of the attached property during the pendency of proceedings on terms.

Issue (i): Whether the confirmation of provisional attachment under the Prevention of Money Laundering Act, 2002 was vitiated for want of jurisdiction, absence of reason to believe, the appellant's alleged bona fides, or the plea of retrospectivity.

Analysis: The attachment was supported by material referred to in the show-cause notice, including the charge-sheet and investigation material, and the authority had recorded reasons in writing. The Tribunal held that the scheme of sections 5 and 8 permits provisional attachment and its adjudication, and that the Enforcement Directorate could issue prohibitory directions during investigation to preserve the property. The plea that the appellant was a bona fide purchaser and that the property was purchased from legitimate sources did not displace the attachment at this stage. The contention based on retrospectivity was rejected because the relevant scheduled offences stood included from 1 June 2009 and the transaction steps and payments were subsequent. The challenge to the order confirming attachment therefore failed.

Conclusion: The confirmation of provisional attachment was upheld and the appellant's challenge on merits failed.

Issue (ii): Whether the appellant was entitled to retain possession of the attached property during the pendency of proceedings on terms.

Analysis: The Tribunal noted that the appellant had already paid substantial consideration and was in possession of the property. Balancing equities, it accepted the alternative prayer for continued possession subject to monthly deposit, with the amount to abide the result of the proceedings before the Special Court.

Conclusion: The appellant was permitted to continue in possession subject to compliance with the deposit condition.

Final Conclusion: The attachment order was sustained, but limited interim relief regarding possession was granted on conditions, leaving the ultimate rights of the parties to be determined in the pending trial.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, provisional attachment may be sustained where the authority records reasons to believe on the basis of material in its possession that the property is involved in money laundering, and a bona fide purchase plea does not by itself defeat attachment at the adjudicatory stage.

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