Provisional attachment of properties sustained where a traced money trail linked assets to diverted customer funds and proceeds of crime.

Provisional attachment of properties was justified where the record showed a prima facie case that customer advances were diverted through group entities and used to acquire assets traceable to proceeds of crime. The Tribunal relied on multiple FIRs, the enforcement investigation, forensic audit material and the documented money trail linking the attached properties to a structured chain of transactions. Because the appellants failed to explain the source and commercial purpose of the transfers satisfactorily, the Tribunal found a sufficient nexus between the assets and the alleged laundering activity and upheld the attachment.

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Issues: Whether the provisional attachment of the properties was justified on the ground that they were involved in money-laundering and represented diverted funds traceable to the alleged proceeds of crime.

Analysis: The Tribunal found that multiple FIRs had been registered against the principal company and its directors for cheating, breach of trust, forgery and conspiracy, and that the enforcement investigation had traced a money trail showing diversion of customer advances through group entities for acquisition of land. It noted that the attached properties were linked to a structured chain of transactions, including transfers to land-holding entities and subsequent acquisition of assets, while the appellants failed to explain the source and commercial purpose of the transactions satisfactorily. The Tribunal also accepted the forensic audit material and investigative findings indicating large-scale irregularities, misutilisation of funds and laundering of the amounts collected from homebuyers.

Conclusion: The attachment was held to be justified, and the challenge to the impugned order failed.

Ratio Decidendi: Properties traceable to diverted funds forming part of proceeds of crime may be provisionally attached where the record discloses a prima facie case of money-laundering and a sufficient nexus between the assets and the alleged offence.

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