2026 (3) TMI 1076 - AT - Money Laundering

Provisional Attachment upheld where unregistered transfers, large refunds and undisclosed fund sources suggested layering of proceeds of crime.

Provisional attachment of specified flats was confirmed because transaction records showed no registered sale deeds and title had not passed, substantial ... Provisional attachment of property - involvement with proceeds of crime - bona fide purchaser - modus operandi for generation of proceeds of crime and its deployment was revealed in the investigation after recording of the ECIR - commission of offence under Section 420, 467, 471 and 120-B of the Indian Penal Code, 1860 - failed to disclose the source of the amount involvement for payment of loan at the time of Agreement to Sell. Whether the appellants were bona fide purchasers whose properties could not be provisionally attached - HELD THAT:- The Tribunal held that the appellants were not shown to be bona fide purchasers because no sale deed had been executed and title had not passed; significant portions of the advance payments made by the appellants had been returned to them (and in one case returned in full or in excess), and the appellants failed to disclose or justify the source of the consideration. The Tribunal treated these facts as sufficient to infer that the appellants were not innocent third parties entitled to protection and that the provisional attachment could be maintained pending trial. The adjudicatory reasoning and factual findings on these points are recorded in the impugned order and were accepted by the Tribunal as determinative of the entitlement to relief. [Paras 11, 12, 13, 15] Appellants are not bona fide purchasers and the provisional attachment of their properties was properly confirmed Final Conclusion: The appeals were dismissed; the Tribunal upheld confirmation of the provisional attachment on the finding that the appellants were not bona fide purchasers, while noting that the attachment remains subject to the final outcome of the trial. Issues: Whether the Adjudicating Authority was right in confirming the provisional attachment of specified flats on the ground that the purchasers were not bona fide purchasers and the consideration and subsequent refunds indicated involvement with proceeds of crime.Analysis: The Tribunal examined the transaction records, agreements to sell, payments received and subsequent refunds to the purchasers. Although agreements to sell were executed, no sale deeds had been registered and title had not passed. The Tribunal analysed the payments ledger showing substantial refunds in multiple cases, including instances where the refund equalled or exceeded the payment, and noted the failure of purchasers to disclose legitimate sources for the amounts paid. The Tribunal considered whether these facts supported an inference that the purchasers were instruments used to layer or conceal proceeds of crime rather than bona fide purchasers entitled to protection. On that basis, and having regard to the role of provisional attachment pending trial, the Tribunal concluded that the Adjudicating Authority had sufficient material to confirm the provisional attachment subject to the outcome of the trial.Conclusion: The confirmation of the provisional attachment is upheld; the appeals are dismissed and the provisional attachment of the properties remains in force subject to the final outcome of the trial.