Provisional attachment under PMLA: confirmed where recipient fails to discharge reverse burden proving legitimate origin.

Provisional attachment under the Prevention of Money Laundering Act was upheld on the legal ground that property in the possession of a recipient may be attached if material satisfies authorities that it is derived from criminal activity; the recipient bears a reverse burden to adduce credible documentary evidence that transfers derive from legitimate savings. The appellant failed to produce bank statements or other proof to rebut transfers and ownership links to diversion of investor funds, so the appellate tribunal (AT) confirmed the Section 26 provisional attachment and dismissed the appeal.

---

---

Issues: Whether the provisional attachment of properties belonging to the appellant under the Prevention of Money Laundering Act, 2002 was justified on the finding that such properties represented proceeds of crime or were purchased with proceeds of crime.

Analysis: The appeal challenged confirmation of a provisional attachment order under Section 26 of the Prevention of Money Laundering Act, 2002. The record shows multiple FIRs and an ECIR describing a scheme of collecting funds from investors and diverting them into purchases and transfers. Material on record includes direct transfers from the main accused to sellers and transfers into the appellant's bank account and property acquisitions in the appellant's name. The appellant relied on asserted transfers to her husband and on her alleged government service and savings, but did not produce the husband's bank statements or other documentary evidence to establish that the impugned transfers derived from legitimate savings and not from proceeds of crime. The principle that provisional attachment may be made in respect of property in the possession of a person who is a recipient of proceeds of crime, even if not an accused, applies; the precondition under Section 5(1) is satisfaction from material in possession that the property is derived from criminal activity. The appellant failed to discharge the reverse burden to show that the impugned transfers were legitimate and maintained over the intervening period.

Conclusion: The provisional attachment of the appellant's properties was justified and the confirmation of the provisional attachment order is upheld; the appeal is dismissed.

Final Conclusion: The appellate challenge to the confirmation of provisional attachment under the Prevention of Money Laundering Act, 2002 is rejected for failure to rebut material indicating that the properties or funds were proceeds of crime.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, provisional attachment under Section 5(1) may be ordered against a person in possession of proceeds of crime even if not an accused, and the recipient must discharge the reverse burden by adducing credible evidence that the property or transfers are not derived from criminal activity; failure to do so permits confirmation of provisional attachment.

---