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2019 (12) TMI 1094 - HC - Money LaunderingMoney Laundering - proceeds of crime - attachment of mortgaged property - tri-partite agreement - criminal activity or not - HELD THAT:- Admittedly, the factory premises were purchased in the year 2005. Therefore, the Tribunal accepted the contention that the said property, which was mortgaged to Bank of Baroda, could not be subject to attachment as proceeds of crime. Admittedly, the said properties had been acquired prior to the commission of the alleged crime, which is stated to be committed somewhere in 2011-12. Thus, the said properties could not be stated to be assets which were derived from any criminal activity. The proceeds of crime are defined to mean any property derived or obtained directly or indirectly by any person, as a result of criminal activity relating to a scheduled offence. Indisputably, the properties involved in this petition were not derived or obtained as a result of any criminal activity as the same had been acquired much prior to commission of the alleged scheduled crime. The contention that the value of any property derived from criminal activity can also be attached as proceeds of crime, is misconceived in the facts of this case. It is an admitted fact that the properties, as sought to be attached by the appellant, had been acquired and mortgaged by respondent no.1 prior to the commission of any scheduled offence. Thus, on the date of commission of the offence and on the date of the attachment order, the said properties did not vest with respondent no.1. Respondent no.1, being the mortgagor, was left with equity of redemption and all interest in the said property stood transferred to the mortgagee (respondent no.2), prior to the order of provisional attachment - There is no dispute that the respondent no.2 bank had acquired the mortgage of the property in question for valuable consideration. Therefore, any interest in the property acquired by them cannot, by any stretch, be considered as proceeds of crime in the hands of the mortgagee bank. The said order of Provisional Attachment, whereby the properties in question were attached and the order passed by the Adjudicating Authority confirming the said attachment, are wholly unsustainable - appeal dismissed.
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