Proceeds of Crime attachment sustained for residential property, while secured creditor must seek statutory relief before the Special Judge

Residential property purchased after the alleged offence period may remain under attachment where the record links payments and EMI servicing to proceeds of crime; the attachment was therefore upheld. A secured creditor with a mortgage over the same property is recognised, but the proper course is to seek relief before the Special Judge under the statutory procedure governing disposal and adjustment of sale proceeds. The secured creditor may pursue that remedy without affecting the criminal proceedings, but the mortgage does not by itself displace attachment where the property is traceable to illicit funds.

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Issues: (i) whether the attachment of the residential property was sustainable on the ground that it was acquired from proceeds of crime, and (ii) whether the secured creditor was entitled to seek relief in respect of the mortgaged property.

Issue (i): whether the attachment of the residential property was sustainable on the ground that it was acquired from proceeds of crime.

Analysis: The property was purchased after the alleged period of offence had commenced. The record indicated that part of the consideration was paid from loan funds, but the remaining payments, including the EMI servicing, were linked to proceeds of crime. On these facts, the property was treated as having been acquired from proceeds of crime, justifying continuation of the confirmed attachment.

Conclusion: The attachment in respect of the residential property was upheld and the challenge to it failed.

Issue (ii): whether the secured creditor was entitled to seek relief in respect of the mortgaged property.

Analysis: The property stood mortgaged to the bank, and the bank's position as a secured creditor was recognised. The proper course was to move the Special Judge for action regarding the mortgaged property in accordance with the statutory procedure, including the safeguards governing disposal and adjustment of sale proceeds. Liberty was therefore granted to pursue the statutory remedy, without affecting the criminal proceedings.

Conclusion: The secured creditor was permitted to seek appropriate relief before the Special Judge in accordance with the statutory mechanism.

Final Conclusion: The challenge to the attachment of the property failed, but limited liberty was granted to the secured creditor to pursue the statutory course in relation to the mortgaged property.

Ratio Decidendi: Property acquired after the commencement of the alleged offence period, and traceable on the record to proceeds of crime, may remain under attachment notwithstanding a third-party mortgage, while a secured creditor must pursue the remedy provided under the statute before the competent criminal court.

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