Issues: (i) Whether confirmation of attachment lapsed because no scheduled-offence proceedings were pending against the appellant companies; (ii) Whether the fixed assets could remain attached as value of proceeds of crime despite the appellants' claims of explained sources, prior acquisition, and repayment of investments; (iii) Whether attachment could exceed the quantified proceeds of crime.

Issue (i): Whether confirmation of attachment lapsed because no scheduled-offence proceedings were pending against the appellant companies.

Analysis: Under the version of Section 8(3) applicable when the confirmation order was made, attachment continued during pendency of proceedings relating to a scheduled offence before a court. Proceedings concerning the scheduled offence against the principal accused were pending on the relevant date. The statutory scheme does not require that the person whose property is attached must himself be an accused in the scheduled offence, where the property is alleged to be connected with proceeds of crime.

Conclusion: The attachment did not lapse merely because the appellant companies were not accused in the scheduled offence; the issue is decided against the appellants.

Issue (ii): Whether the fixed assets could remain attached as value of proceeds of crime despite the appellants' claims of explained sources, prior acquisition, and repayment of investments.

Analysis: The material recorded substantial inflows linked to associates of the principal accused and indicated layering through the appellant companies. The appellants did not substantiate the asserted repayments or establish, by cogent evidence, that the assets were unconnected with the tainted funds. The presumptions and burden under Sections 23 and 24 applied. Property may be attached as value of proceeds of crime, and is not immune merely because it was acquired before the alleged infusion of tainted funds or from asserted explained sources.

Conclusion: The confirmed attachments of the fixed assets were sustained pending the criminal proceedings; the issue is decided against the appellants.

Issue (iii): Whether attachment could exceed the quantified proceeds of crime.

Analysis: Attachment cannot extend beyond the value of proceeds of crime. However, the final quantification from all scheduled offences and the prosecution complaints were not available on record, while the Special Court remained seized of the prosecution proceedings.

Conclusion: The legal limitation against attachment beyond quantified proceeds of crime is affirmed, but the appellants must seek appropriate relief before the Special Court under Section 8(8); the issue is not finally resolved on the factual quantum.

Final Conclusion: The confirmed attachments remain operative, while the appellants retain liberty to pursue appropriate relief before the Special Court concerning the final quantification and extent of proceeds of crime.

Ratio Decidendi: A PMLA attachment may subsist against a person not accused in the scheduled offence where scheduled-offence proceedings are pending and the person fails to rebut the statutory case that the attached property represents value of proceeds of crime.

Issues: Whether the provisional attachment of bank balances as equivalent value of proceeds of crime was sustainable when the direct proceeds were no longer traceable; and whether the appellant had discharged the burden of showing that the attached assets were not proceeds of crime.

Analysis: The attachment covered a comparatively small value of movable assets, while the alleged proceeds of crime were assessed at a much higher figure. The Tribunal held that, under the PMLA, proceeds of crime include not only the direct tainted property but also property of equivalent value where the direct proceeds have been dissipated, layered, or are otherwise unavailable. It relied on the settled principle that where the tainted property cannot be reached, other property near or equivalent in value may be attached as alternative attachable property. The Tribunal also found that the appellant did not satisfactorily displace the statutory burden as to the source and character of the attached amounts.

Conclusion: The attachment of the bank balances as equivalent value of proceeds of crime was upheld and the challenge failed.

Ratio Decidendi: Where the direct proceeds of crime are unavailable, dissipated, or layered, property of equivalent value may be attached under the PMLA as alternative attachable property, and the attachment need not be defeated merely because individual balances are asserted to be from explained sources.

Issues: Whether the freezing and retention of the immovable property was liable to be set aside on the ground that the appellants were not parties to the original proceedings and had not been issued the initial notice; and whether the appellants had shown that the property was acquired from untainted funds rather than proceeds of crime.

Analysis: The Tribunal noted that the property had been frozen in proceedings under the Prevention of Money Laundering Act, 2002 arising from a large banking fraud and that the appellants' ownership claim was linked to transactions traced through entities connected with the alleged laundering trail. It held that the earlier assertion made in proceedings by another claimant had resulted in the property being treated as belonging to that claimant, while the present appellants' purchase was not disclosed at that stage. The Tribunal further found that the appellants failed to discharge the statutory burden to establish legitimate sources for the property, and that the presumptions under the Act operated against them. It also observed that the question whether the underlying transactions were genuine was a matter for the trial courts, and that the existence of pending criminal trial and framed charges weighed against release of the property at that stage.

Conclusion: The challenge to the freezing and retention of the property failed, and the property was not directed to be released.

Final Conclusion: The appeals were dismissed, and the impugned restraint on the property was maintained without affecting the merits of the ongoing trial.

Ratio Decidendi: In proceedings under the Prevention of Money Laundering Act, 2002, property may continue to remain under restraint where the claimant fails to prove a lawful source of acquisition and the statutory presumptions as to proceeds of crime are not rebutted.

Issues: Whether the subsequent purchaser was entitled to challenge the confirmation of attachment of the property on the plea of bona fide purchase and prior sale for valuable consideration, and whether the property retained its attachable character as proceeds of crime under the PMLA.

Analysis: The property was found to have originated from transactions linked to the scheduled offence and was treated as proceeds of crime under the PMLA. A transferee from such property could not obtain a better title than the transferor, and a subsequent sale during the pendency of attachment proceedings did not purge the tainted character of the asset. The transfer was viewed as lacking credibility as a genuine arm's length transaction, particularly in light of the inter-connected dealings between the groups, the timing of the transfer, the below-valuation consideration, and the pendency of enforcement action. The availability of a remedy before the Special Court under the PMLA for a genuine claimant also weighed against interference with the confirmed attachment.

Conclusion: The challenge to the confirmed attachment failed, and the property remained attached against the appellants.

Issues: Whether the provisional attachment and its confirmation could be sustained where the fixed deposit was held by the Bureau of Prevention of Corruption pursuant to the Special Court's direction and was not transferable by the appellant.

Analysis: The fixed deposit represented cash placed in deposit under the Special Court's order and remained under the custody of the Bureau of Prevention of Corruption. Since the appellant could not transfer the deposit, the statutory condition requiring a basis to apprehend transfer or dealing with the property so as to frustrate confiscation was not established.

Conclusion: The provisional attachment and its confirmation were unsustainable and were interfered with in favour of the appellant.

Issues: Whether substitution of the deceased appellants by their legal heirs could be allowed when the applications were filed after a long delay without an application for condonation of delay, and whether the appeals could be continued under Section 72 of the Prevention of Money Laundering Act, 2002.

Analysis: Section 72 of the Prevention of Money Laundering Act, 2002 permits proceedings to continue on the death of an appellant, but it does not dispense with the requirement of taking steps for substitution within a reasonable time. The Tribunal held that though it is not strictly bound by the Code of Civil Procedure, the principles underlying Order 22 of the Code of Civil Procedure, 1908 and Article 120 of the Limitation Act, 1963 can be applied to regulate substitution and preserve the lis. An application for substitution filed beyond the reasonable period of three months must therefore be supported by an application for condonation of delay with sufficient explanation. In the present matter, the delay ranged from 122 days to several years, no condonation application was filed, and the oral explanation based on non-functioning of the Tribunal was not accepted.

Conclusion: The applications for substitution were not maintainable in the absence of condonation of delay and were rejected; consequently, the appeals abated and stood dismissed.

Ratio Decidendi: Even where the governing statute is silent on limitation, substitution of deceased parties must be sought within a reasonable time, and long-delay substitution applications require condonation on sufficient cause before the proceedings can be continued.

Issues: (i) Whether the application under section 32A of the Insolvency and Bankruptcy Code, 2016 was maintainable at the stage where no resolution plan had been approved and no liquidation asset had been sold. (ii) Whether a secured creditor or assignee of debt could seek release or lifting of attachment of the properties under challenge in the light of the safeguards available under section 8(5) to 8(8) of the Prevention of Money Laundering Act, 2002.

Issue (i): Whether the application under section 32A of the Insolvency and Bankruptcy Code, 2016 was maintainable at the stage where no resolution plan had been approved and no liquidation asset had been sold.

Analysis: Section 32A operates only when the statutory conditions are satisfied, namely approval of a resolution plan resulting in change of control, or sale of liquidation assets to a qualifying person. The relief under that provision is not available in the abstract or before those triggering events occur. On the admitted facts, no resolution plan had been approved and no sale of liquidation assets had taken place.

Conclusion: The application under section 32A was not maintainable at that stage and was premature.

Issue (ii): Whether a secured creditor or assignee of debt could seek release or lifting of attachment of the properties under challenge in the light of the safeguards available under section 8(5) to 8(8) of the Prevention of Money Laundering Act, 2002.

Analysis: The statutory scheme under section 8 of the Prevention of Money Laundering Act, 2002 shows that attachment does not by itself transfer title, and the rights of a claimant with a legitimate interest are preserved until the trial concludes and confiscation or release is determined. The mechanism for restoration under section 8(8) protects lawful claimants after confiscation, and the Tribunal reasoned that immediate release at the instance of a financial institution could prejudice competing claims and the statutory scheme.

Conclusion: The secured creditor or assignee was not entitled to have the attachment lifted on that basis, and its remedy remained subject to section 8(8) of the Prevention of Money Laundering Act, 2002.

Final Conclusion: The appeal failed because the statutory preconditions for invoking section 32A were absent and the attachment challenge could not override the protective framework under section 8 of the Prevention of Money Laundering Act, 2002.

Ratio Decidendi: Section 32A of the Insolvency and Bankruptcy Code, 2016 applies only upon satisfaction of its specified preconditions, while attachment under the Prevention of Money Laundering Act, 2002 remains subject to the statute's own scheme for adjudication, confiscation, and restoration of property rights.

Issues: Whether the seizure and retention of cash, documents and digital devices under the Prevention of Money Laundering Act, 2002 had lapsed under Section 8(3) because the investigation was not completed and no prosecution complaint was filed within 365 days.

Analysis: Section 8(3) permits retention of property or seized records only during investigation for a period not exceeding 365 days or during the pendency of proceedings relating to the offence. The record showed that the investigation arising from the FIR and ECIR had not been completed, and no prosecution complaint had been filed within the statutory period. In these circumstances, the continued operation of the impugned seizure and retention order could not be sustained.

Conclusion: The seizure and the retention order had lapsed under Section 8(3) and were set aside in favour of the appellants.

Issues: (i) Whether the prosecution complaint filed after confirmation of provisional attachment was barred by limitation and whether the attachment had lapsed. (ii) Whether the appellants had locus standi to challenge the order confirming provisional attachment.

Issue (i): Whether the prosecution complaint filed after confirmation of provisional attachment was barred by limitation and whether the attachment had lapsed.

Analysis: The amendment introduced by the Finance Act, 2018 was held to operate from 19.04.2018, and the time limit for filing the prosecution complaint was treated as commencing from that date. The legislative intent was to allow the Enforcement Directorate reasonable time to file prosecution, and the amendment was not treated as retrospectively extinguishing existing attachments. Since the complaint was filed within 90 days from 19.04.2018, no illegality was found in the continued attachment.

Conclusion: The limitation objection failed and the appellants were not entitled to release of the attached properties on that ground.

Issue (ii): Whether the appellants had locus standi to challenge the order confirming provisional attachment.

Analysis: The Adjudicating Authority had recorded adverse prima facie findings against the appellants, including that they had committed the scheduled offences and generated proceeds of crime. In that context, they were persons aggrieved for the purpose of appeal under the statute, even if the attached properties did not stand in their names. Their challenge to the confirmation order was therefore maintainable.

Conclusion: The appellants had locus standi to maintain the appeals.

Final Conclusion: The challenge on limitation was rejected, the maintainability objection was overruled, and the confirmation of provisional attachment remained undisturbed.

Ratio Decidendi: A statutory time limit introduced by amendment for filing a prosecution complaint under the money-laundering regime operates from the date the amendment comes into force, and a person against whom adverse findings are recorded by the Adjudicating Authority is a person aggrieved entitled to appeal.

Issues: Whether the impugned adjudicating authority order confirming provisional attachment should be set aside and remanded for fresh hearing because the appellant was not served with notice and thereby was denied opportunity of hearing under the PMLA regime.

Analysis: The Tribunal found that notices issued by the Adjudicating Authority were sent to an incorrect e-mail ID and therefore the appellant did not receive notice or an opportunity to be represented before the Authority. The Tribunal held that this resulted in violation of the principles of natural justice and that the statutory scheme (PMLA, 2002) requires affected persons be afforded an opportunity of hearing. The respondent did not oppose remand and the parties were directed to appear before the Authority on a nominated date. The Adjudicating Authority was granted a fresh period for disposal.

Conclusion: The impugned order dated 23.09.2022 confirming provisional attachment is set aside and the matter is remanded to the Adjudicating Authority for fresh hearing; parties to appear on 20th May, 2024 and the Adjudicating Authority is granted a fresh period for disposal.