Issues: (i) Whether immovable property purchased prior to the commission of the scheduled offence can be provisionally attached / confirmed as proceeds of crime or as property equivalent in value; (ii) Whether confirmation of a provisional attachment order passed beyond 180 days from attachment is invalid where the intervening period falling within the Covid-19 exclusion (15.03.2020 to 28.02.2022) is excluded from computation.

Issue (i): Whether property acquired prior to the commission of the scheduled offence may be attached under the definition of "proceeds of crime" or as property equivalent in value when the actual proceeds are not traceable.

Analysis: The Tribunal analysed the three-limbed definition of "proceeds of crime" in Section 2(1)(u) of the Prevention of Money Laundering Act, 2002 and followed authoritative precedents recognizing (a) tainted property derived directly or indirectly from criminal activity, and (b) the second limb permitting attachment of property of equivalent value where proceeds are not traceable. The Tribunal considered decisions including Axis Bank and subsequent High Court and Supreme Court pronouncements, and applied the tests and safeguards for attachment of deemed tainted (untainted) property. It also applied the statutory onus under Section 24 on persons claiming the property to show lawful source and relied on admissions and documentary record (including admission under Section 50(2)) showing repayment/servicing from alleged proceeds where applicable.

Conclusion: The Tribunal held that a property acquired prior to the commission of the scheduled offence can be provisionally attached / confirmed as proceeds of crime under the second limb (property equivalent in value) when the actual proceeds are not traceable and statutory safeguards and tests are satisfied. This conclusion is adverse to the appellants.

Issue (ii): Whether the confirmation order of provisional attachment dated 22.08.2022 (after attachment dated 21.02.2022) is invalid for being passed beyond 180 days in terms of Section 5(3) of the Prevention of Money Laundering Act, 2002.

Analysis: The Tribunal examined the nature of the 180-day timeline in Section 5 and the Supreme Court's orders excluding the period from 15.03.2020 to 28.02.2022 for computation of limitation and termination of proceedings (In re: Limitation and subsequent orders). It considered conflicting authorities and detailed High Court decisions interpreting applicability of the Covid exclusion to statutory time-limits for termination of proceedings. The Tribunal concluded that the Covid exclusion applies for computing the 180-day period under Section 5(3), and therefore the confirmation order fell within the permissible period once the excluded interval was omitted. The Tribunal also considered facts such as admissions regarding use/servicing of loan from proceeds and failure of appellants to discharge the onus under Section 24.

Conclusion: The Tribunal held that the confirmation of the provisional attachment was within the extended/adjusted period after excluding the Covid-19 interval and thus is not invalid under Section 5(3). This conclusion is adverse to the appellants.

Final Conclusion: On the decided issues, the Tribunal upheld the Adjudicating Authority's confirmation of provisional attachment: properties acquired prior to the scheduled offence may be attached as property equivalent in value when proceeds are untraceable and the 180-day period for confirmation must be computed excluding the Covid-19 exclusion period from 15.03.2020 to 28.02.2022; consequently the appeals are dismissed.

Ratio Decidendi: Section 2(1)(u) of the Prevention of Money Laundering Act, 2002 comprises three limbs permitting attachment of (i) property directly/indirectly derived from crime and (ii) property equivalent in value where proceeds are not traceable; and the Covid-19 exclusion (15.03.2020-28.02.2022) applies in computing the 180-day period under Section 5(3) for confirmation of provisional attachment, subject to statutory safeguards and onus on the person claiming the property.

Issues: Whether the provisional attachment of property equivalent to the proceeds received by the appellant and its confirmation by the Adjudicating Authority under the Prevention of Money Laundering Act, 2002 was legally valid.

Analysis: The matter was decided under Section 26 of the Prevention of Money Laundering Act, 2002 with material including statements recorded under Section 50(2) of the Prevention of Money Laundering Act, 2002 and contemporaneous banking and transaction records. The evidence accepted by the Adjudicating Authority comprised admissions and corroborative witness statements indicating that the appellant facilitated accommodated letter of credit transactions, charged commission and received sums identified as proceeds of those transactions. Documentary material showed loan disbursal, demand draft payments, and repeated cash deposits used to repay the loan EMIs without credible explanation of source; testimony indicated that the property was held in another's name but the funds and repayments were arranged by the appellant, supporting a finding of beneficial ownership and camouflage of proceeds.

Conclusion: The provisional attachment was properly connected to proceeds of crime and its confirmation by the Adjudicating Authority was legally justified; the appeal is dismissed and the confirmation of provisional attachment is upheld in favour of the respondent.

1. ISSUES PRESENTED AND CONSIDERED

(i) Whether an application/appeal under Section 42 of the I & B Code, 2016 challenging the liquidator's rejection of a claim can be entertained when filed far beyond the statutory 14-day limitation period, even after accounting for the Covid-19 limitation exclusion period referred to by the Tribunal.

(ii) Whether, after substantial completion of liquidation and distribution of assets under Section 53 and in view of the time-bound nature of liquidation under Regulation 44(1), the liquidation process can be reopened to consider a belated claim and a belated Section 42 challenge.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Maintainability and limitation for Section 42 challenge to rejection of claim

Legal framework (as addressed by the Court): The Court noted that Section 42 provides a remedy against rejection of a claim by the liquidator by approaching the Adjudicating Authority, and that the limitation prescribed is 14 days from receipt of the decision. The Tribunal also considered the Covid-19 limitation exclusions (15.03.2020 to 28.02.2022) while assessing timeliness.

Interpretation and reasoning: The Court accepted the finding that the claim was rejected on 17.02.2020 and that no Section 42 appeal was filed within the prescribed period. Instead, the challenge was instituted only on 19.07.2023, described as a delay of 1243 days. The Adjudicating Authority's computation was upheld: even after granting the Covid-19 exclusion period considered by the Tribunal, the 2023 filing remained barred by limitation. The Court emphasised that the Appellant "slept over" its rights after rejection and did not pursue the statutory remedy within time.

Conclusion: The belated Section 42 challenge filed in 2023 against the rejection dated 17.02.2020 was time-barred and not entertainable; no error was found in the Adjudicating Authority's refusal to condone/entertain the delayed invocation of Section 42.

Issue (ii): Reopening liquidation after distribution and passage of liquidation timelines

Legal framework (as addressed by the Court): The Court relied on the time-bound scheme of liquidation, specifically noting Regulation 44(1) (completion of liquidation within one year) and the distribution mechanism under Section 53, treating limitation and finality as central to liquidation proceedings.

Interpretation and reasoning: The Court affirmed the finding that the claim itself was lodged long after the public notice timeline (stated as delayed by 351 days) and that, by the time the Appellant approached the Adjudicating Authority years later, the liquidation had "substantially progressed" and assets had already been distributed under Section 53. Documents were noted as having been produced to show that the process had crossed the Section 53 distribution stage. The Court accepted the reasoning that, given the statutory emphasis on finality and timelines in liquidation, the process cannot be reopened to accommodate a highly belated claim, particularly when liquidation had been "laid to rest".

Conclusion: Once liquidation had progressed to and past distribution under Section 53 and in light of Regulation 44(1)'s timeline, interference to reopen the liquidation for a belated claim and delayed Section 42 challenge was impermissible. The appeal was dismissed on merits for lack of any apparent error in the impugned order.

Issues: (i) Whether the properties standing in the names of the appellants were liable to provisional attachment under the Prevention of Money Laundering Act, 2002 on the footing that they were acquired from the proceeds of crime. (ii) Whether the attachment could be sustained where the appellants claimed that the properties were purchased from salary, commission, or independent sources and where some appellants were not separately arraigned as accused.

Issue (i): Whether the properties standing in the names of the appellants were liable to provisional attachment under the Prevention of Money Laundering Act, 2002 on the footing that they were acquired from the proceeds of crime.

Analysis: The appellants were found to have played an active role in promoting and canvassing the illegal investment schemes floated by the company and in collecting public deposits. Their statements and the surrounding material were relied upon to conclude that the amounts earned by them were not legitimate earnings but were derived from and connected with the criminal activity. The properties were acquired during the relevant period when the illegal schemes were operating, and the Tribunal accepted the finding that the assets were purchased out of the proceeds of crime rather than from lawful income.

Conclusion: The properties were validly treated as proceeds of crime and were liable to provisional attachment.

Issue (ii): Whether the attachment could be sustained where the appellants claimed that the properties were purchased from salary, commission, or independent sources and where some appellants were not separately arraigned as accused.

Analysis: The Tribunal held that the plea of salary or commission did not assist the appellants because the earnings themselves were generated through participation in the unlawful scheme. As regards the wives, the Tribunal found that no independent source of income was disclosed and the statements recorded indicated that the funds came from their husbands' unlawful earnings. The absence of a separate criminal array was held to be immaterial where the person was found to be a recipient of proceeds of crime.

Conclusion: The challenge based on alleged lawful income and non-array as accused was rejected.

Final Conclusion: The attachment orders were upheld and the appeals failed on merits, leaving no ground for interference.

Ratio Decidendi: Assets acquired from earnings generated by participation in an unlawful scheme may be treated as proceeds of crime and attached under the money-laundering law, and a recipient of such proceeds need not be separately arraigned as an accused for attachment to stand.

Issues: Whether property acquired prior to the commission of the scheduled offence can be attached under the Prevention of Money Laundering Act, 2002 as equivalent value of proceeds of crime when the tainted property is not traceable.

Analysis: The definition of proceeds of crime was treated as comprising multiple limbs, including not only property derived or obtained directly or indirectly from criminal activity relating to a scheduled offence, but also the value of such property. On that construction, attachment is not confined to property physically traceable as tainted property. Where the proceeds generated from the offence have been siphoned off, vanished, or are otherwise unavailable, the statute permits attachment of other property of equivalent value, even if such property was acquired before the offence. This interpretation was held necessary to preserve the efficacy of the scheme against money laundering and to avoid rendering the equivalent-value limb redundant.

Conclusion: Property acquired prior to the commission of the offence can be attached as equivalent value under the Act when the actual proceeds of crime are not traceable. The appellants' challenge failed.

Issues: (i) Whether the coal block allocation letter constituted property and could form the basis of proceeds of crime under the Prevention of Money Laundering Act, 2002. (ii) Whether the share application money and share premium collected by the appellant were proceeds of crime liable to attachment notwithstanding the timing of receipt, the absence of mining, and their deployment for business purposes.

Issue (i): Whether the coal block allocation letter constituted property and could form the basis of proceeds of crime under the Prevention of Money Laundering Act, 2002.

Analysis: The definition of property under Section 2(1)(v) of the Prevention of Money Laundering Act, 2002 is expansive and includes intangible rights and interests. The allocation letter conferred a valuable commercial right on the appellant and was treated as property involved in the offence. In view of the proved scheduled offences of cheating and criminal conspiracy, the allocation obtained by misrepresentation was held to be property derived from criminal activity relatable to a scheduled offence and therefore within the ambit of proceeds of crime under Section 2(1)(u) of the Act.

Conclusion: The coal block allocation letter was rightly treated as property and as tainted property/proceeds of crime.

Issue (ii): Whether the share application money and share premium collected by the appellant were proceeds of crime liable to attachment notwithstanding the timing of receipt, the absence of mining, and their deployment for business purposes.

Analysis: The Court held that the offence under Section 3 of the Prevention of Money Laundering Act, 2002 is not confined to direct gains from actual mining. The money raised by share capital and premium was found to have been collected on the strength of the prospect of coal block allotment and was inextricably linked to the tainted allocation. The fact that some receipts preceded the formal allotment, that no coal was mined, or that the funds were deployed for legitimate business purposes did not alter their character where they were traceable directly or indirectly to the criminal activity relating to the scheduled offence. The broad definitions of property and proceeds of crime, together with the proved predicate offences, supported the attachment.

Conclusion: The share application money and share premium were correctly treated as proceeds of crime and remained attachable.

Final Conclusion: The attachment was upheld, and the appellant's challenge failed because the connected property and funds were held to be derived, directly or indirectly, from criminal activity relating to the scheduled offences.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, intangible rights arising from a tainted allocation and any funds derived directly or indirectly from criminal activity relatable to a scheduled offence constitute proceeds of crime, even if no separate physical exploitation of the asset occurred and even if the funds were later used for legitimate purposes.

Issues: Whether the Adjudicating Authority's confirmation under Section 26 of the Prevention of Money Laundering Act, 2002 of provisional attachment of properties alleged to be proceeds of crime should be set aside.

Analysis: Evidence recorded in the investigation included seizure of marksheets/certificates issuing registers from the institution and documentary information from the University Grants Commission indicating issuance and backdating of large numbers of degrees, manipulation of admissions and faculty lists, and bank transactions reflecting receipt and transfer of funds. Investigative findings quantified alleged proceeds of crime and showed transfers from institutional accounts to accounts of the accused and their relatives. Notices under the adjudicatory provisions called for disclosure of sources of acquisition of assets, and the persons on whom attachment was effected failed to satisfactorily disclose sources. Attempts to rely on bank statements filed in rejoinder were not admitted as fresh evidence because no application for additional evidence at the appellate stage was made and no permission was granted; in any event, the provisional attachment related to properties of value less than or equal to the amounts reflected even in those statements. The combination of seized records, external confirmations and unexplained receipt/transfers supported continued classification of the impugned assets as proceeds of crime for purposes of provisional attachment confirmation.

Conclusion: The confirmation of the provisional attachment under Section 26 of the Prevention of Money Laundering Act, 2002 is upheld and the appeals are dismissed in favour of the respondent.

1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the provisional attachment and its confirmation could be sustained when the respondent failed to produce a prima facie money trail connecting the consideration paid for the Alibaug property to "proceeds of crime".

(ii) Whether the attachment of the Mumbai (Dadar) property could be sustained where the alleged "proceeds of crime" component (loan amount) was shown, prima facie, to have been repaid prior to the recording of the ECIR, and where the confirming authority proceeded on an erroneous factual premise about the timing of repayment.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Sustainability of attachment of the Alibaug property in absence of prima facie money trail linking purchase funds to proceeds of crime

Legal framework (as reflected in the decision): The Tribunal proceeded on the requirement that, for sustaining attachment, there must be prima facie material connecting the property (or funds used to acquire it) with "proceeds of crime", including a demonstrable money trail linking the consideration to such proceeds.

Interpretation and reasoning: The Tribunal found that the Alibaug property was purchased between 2010-2012 for stated consideration paid through banking channels, contrary to the allegation of a cash component. The appellant's contribution was limited, and the balance was stated to have come through an interest-free loan arrangement sourced from a third person. The Tribunal further noted that allegations of undervaluation were not supported by the FIR and, in any event, property registration occurs after valuation consistent with the applicable benchmark for the area. Critically, the respondent did not place prima facie material showing that the funds used were received from entities allegedly involved in the predicate offence, nor did it show that the lender/source was a recipient of proceeds of crime or involved in the crime.

Conclusion: In the absence of prima facie proof and money trail connecting the purchase consideration of the Alibaug property to proceeds of crime, the attachment and its confirmation, to that extent, could not be sustained.

Issue (ii): Sustainability of attachment of the Mumbai (Dadar) property where the alleged tainted loan component was repaid prior to ECIR and the confirming authority relied on an incorrect factual basis

Legal framework (as reflected in the decision): The Tribunal treated the existence of proceeds of crime "in the hands" of the appellant and the need for prima facie factual foundation as material to sustaining attachment, particularly where attachment was premised on funds allegedly received from a person linked to the proceeds of crime.

Interpretation and reasoning: The Tribunal recorded that the Mumbai (Dadar) property was purchased for consideration and that a substantial portion was paid from a loan received from a friend. The respondent's case was that this loan amount constituted proceeds of crime because of the alleged proceeds in the hands of the lender's spouse. The Tribunal accepted, prima facie, the appellant's showing (supported by bank statement) that the borrowed amount had been repaid in December 2020, i.e., prior to the recording of the ECIR dated 08.09.2021. On that basis, the Tribunal reasoned that, with the repayment, nothing remained with the appellant "out of the proceeds of crime"; the alleged proceeds stood returned to the lender, and the respondent's observation that repayment occurred after initiation of investigation proceeded on a materially incorrect timeline.

Conclusion: The Tribunal held that these facts warranted interference; the confirming order was set aside and the appeal allowed. The Tribunal clarified that its decision would not affect the pending criminal case.

Issues: (i) Whether the provisional attachment and confirmation of the entire sum received by the appellant for supply of 11 additional bogey frames (Rs. 1,80,77,400.00 / Rs. 1,88,77,400/- as noted) can be treated wholly as proceeds of crime; (ii) Whether the provisional attachment should be modified or quantified in light of legitimate manufacturing costs and contractual terms.

Issue (i): Whether the entire amount received for supply of 11 additional bogey frames is proceeds of crime and therefore liable to provisional attachment and confirmation under the Prevention of Money Laundering Act, 2002.

Analysis: The record includes FIR and investigation material indicating payment of alleged bribe (Rs. 1,80,000/-) and a chain of transactions linked to the award of additional supply. A prima facie case for the offences alleged exists and the matter remains pending criminally. However, the supplies were performed under a contract containing an express clause permitting enhancement up to 30% and the additional bogey frames involved real manufacturing costs and consideration paid by the contracting authority. The attachment regime must account for the distinction between illicit gain attributable to criminal activity and legitimate business receipts that cover cost of production.

Conclusion: The Tribunal holds that the entire amount received for the additional 11 bogey frames cannot be treated wholly as proceeds of crime; provisional attachment of the entire sum is not warranted.

Issue (ii): Whether and how the provisional attachment should be quantified or modified given legitimate costs and contractual entitlement.

Analysis: A balanced and equitable approach is required where part of the gross receipts represents legitimate costs of manufacture and supply while only the illicitly obtained profit component can be equated to proceeds of crime. The respondent is to assess and quantify the portion properly to be regarded as proceeds of crime rather than treating the full contract value as such. A limited period is appropriate for such re-quantification to avoid prolonged uncertainty.

Conclusion: The Tribunal directs that the proceeds of crime be quantified by the respondent by isolating the profit element (or other appropriate measure) from the total value received for the 11 additional bogey frames, and that the provisional attachment be confirmed only to the extent of that quantified proceeds of crime. The respondent is directed to complete the quantification within four weeks from receipt of the order.

Final Conclusion: The appeal is partly allowed by modifying the scope of the provisional attachment - the attachment confirmed only to the extent of the quantified proceeds of crime (profit component) after respondent's assessment within four weeks; the remainder of the attached amount shall not be treated as proceeds of crime for confirmation purposes.

Ratio Decidendi: Where a contracted supply generates both legitimate business receipts covering production costs and an alleged illicit advantage, provisional attachment under the Prevention of Money Laundering Act, 2002 must be confined to the portion that reasonably represents proceeds of crime (for example the profit element), and not the entire gross contract value.

1. ISSUES PRESENTED AND CONSIDERED

(i) Whether a movable asset purchased partly through a bank loan and partly through unexplained funds could validly remain under attachment as "proceeds of crime" under the Prevention of Money Laundering Act, 2002 (PMLA), notwithstanding the bank's hypothecation/secured interest in the asset.

(ii) Whether the secured creditor's claim based on hypothecation under other recovery/secured-creditor regimes could, on the facts, defeat or nullify attachment under PMLA; and what forum/remedy was available to protect such third-party interest.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Attachment of an asset funded partly by loan and partly by unexplained funds

Legal framework (as discussed by the Tribunal): The Tribunal proceeded on the basis that PMLA governs attachment of "proceeds of crime" and that third-party claims may be protected through the mechanism recognised under Section 8(8) PMLA, subject to the claimant's good faith and reasonable precautions.

Interpretation and reasoning: The Tribunal examined the funding pattern for the vehicle purchase and found it was financed up to a fixed amount through the bank loan, while the balance came from the borrower's savings account. The Tribunal accepted the enforcement finding that the deposits in that savings account were substantially cash deposits whose source was not properly explained or substantiated. It also noted the borrower's limited income-tax filings and absence of supporting documents for claimed sources of income, leading to the conclusion that the portion of consideration coming from the savings account was not demonstrably untainted. On this factual foundation, the Tribunal held that at least to the extent of the unexplained contribution used for purchase, the asset could not be treated as free from taint.

Conclusion: The Tribunal upheld the continued attachment of the vehicle under PMLA, holding that the asset could not be treated as wholly untainted because a material portion of the purchase consideration was sourced from unexplained deposits.

Issue (ii): Effect of secured creditor's hypothecation/first charge vis-à-vis PMLA attachment; remedy for the creditor

Legal framework (as discussed/applied by the Tribunal): The Tribunal applied the principle that, by virtue of the PMLA's overriding provision, PMLA attachment can operate notwithstanding secured-creditor statutes, and that the statutes should be construed harmoniously so as to preserve PMLA objectives while also protecting bona fide secured interests. It further treated Section 8(8) PMLA as the route for safeguarding a legitimate third-party claim, conditioned upon good faith and reasonable precautions.

Interpretation and reasoning: The Tribunal rejected the contention that hypothecation/secured-asset status by itself renders PMLA attachment impermissible. It reasoned that secured interest does not automatically negate attachment; rather, the secured creditor's protection depends on demonstrating bona fides, including that reasonable precautions were exercised and the creditor acted in good faith. On the record, the Tribunal also observed that the bank's claimed due diligence was not adequate in light of the borrower's antecedents and the inability to explain sources of funds, reinforcing that the question of protection of the bank's claim required examination within the PMLA framework for legitimate claimants. The Tribunal relied on the adjudicating authority's recording that the bank's claim could be "well protected" under Section 8(8) PMLA subject to the stated conditions.

Conclusion: The Tribunal did not lift the attachment on the ground of hypothecation/first charge. Instead, it disposed of the appeal by granting the secured creditor liberty to seek appropriate relief before the Special Court under Section 8(8) PMLA, treating that statutory mechanism as the proper avenue to protect any legitimate secured interest while the attachment otherwise remains operative.

Issues: Whether the provisional attachment confirmed under the Prevention of Money Laundering Act, 2002 could be sustained on the basis of the appellant's cash deposits and whether the appellant had rebutted the statutory presumption by a credible and corroborated explanation.

Analysis: The cash deposits in the appellant's bank accounts were substantial, occurred in multiple tranches over a short period, and were not satisfactorily explained by the marriage-gift theory or other asserted sources. The explanations regarding deposits by family members, cash savings, medical funds, and demonetisation-related deposits were found inconsistent, uncorroborated, or unsupported by reliable evidence. The materials on record showed that the deposits did not match the appellant's known income and earning capacity. In these circumstances, the statutory presumption under Section 24 remained unrebutted, and the finding that the attached assets were involved in money laundering was upheld.

Conclusion: The attachment was sustained and the challenge to the impugned order failed.

Final Conclusion: The appeal was dismissed and the confirmation of attachment under the money-laundering was left undisturbed.

Ratio Decidendi: Where the recorded transactions and surrounding circumstances show unexplained cash deposits inconsistent with known sources of income, and the explanation offered is not corroborated by reliable evidence, the statutory presumption against the holder of the assets is not rebutted and the attachment may be sustained.

Issues: (i) Whether the property under attachment was acquired prior to the crime period and therefore could not be treated as proceeds of crime; (ii) Whether the appellant's claim that the property was purchased from her own earnings as an agent established a lawful source; (iii) Whether the alleged contribution from the appellant's husband was shown to be from a legitimate source; (iv) Whether the provisional attachment was bad on the ground that the property value exceeded the alleged proceeds of crime.

Issue (i): Whether the property under attachment was acquired prior to the crime period and therefore could not be treated as proceeds of crime.

Analysis: The attached property was examined in the light of the investigation record, bank transactions, and the appellant's statement. The material showed that the acquisition was during the relevant crime period and that the property had nexus with the diverted funds. The plea that the property was purchased before the offence was not supported by the record.

Conclusion: The issue was decided against the appellant.

Issue (ii): Whether the appellant's claim that the property was purchased from her own earnings as an agent established a lawful source.

Analysis: The appellant's statement did not disclose any credible or specific role as an agent, and she admitted that her husband and brother managed the transactions. The explanation of independent earnings was not substantiated by evidence and was inconsistent with the account activity found during investigation.

Conclusion: The issue was decided against the appellant.

Issue (iii): Whether the alleged contribution from the appellant's husband was shown to be from a legitimate source.

Analysis: The appellant asserted that part of the purchase consideration came from her husband, but no legitimate source for that amount was established. Since the husband was found to be involved in the fraudulent scheme, the source, even if accepted, would still trace back to unlawful proceeds.

Conclusion: The issue was decided against the appellant.

Issue (iv): Whether the provisional attachment was bad on the ground that the property value exceeded the alleged proceeds of crime.

Analysis: The Tribunal applied the statutory meaning of value as the fair market value on the date of acquisition. On that basis, the attachment was not shown to be excessive or contrary to the governing definition.

Conclusion: The issue was decided against the appellant.

Final Conclusion: The challenge to the provisional attachment and its confirmation was rejected, and the impugned order was sustained in full.

Ratio Decidendi: For attachment under the money laundering law, property is assessable by its nexus with proceeds of crime during the relevant period, and the statutory value is the fair market value on the date of acquisition.

Issues: Whether the confirmed provisional attachment was sustainable where the properties were treated as proceeds of crime or as properties of equivalent value, including properties acquired prior to the alleged scheduled offence, and whether the appellants displaced the statutory burden under the money-laundering law.

Analysis: The Tribunal held that the respondent had furnished a workable basis for assessing the alleged proceeds of crime by relying on excess excavation of red sand beyond the permissible quantity and the resulting revenue loss. It found that the appellants did not establish that excavation was confined to the permitted limit or that the amounts reflected in the returns represented legitimate income alone. The Tribunal further held that disclosure of property in income-tax returns did not make the assets untainted for the purposes of the money-laundering law if the underlying income itself arose from illegal activity. On the scope of attachment, it accepted that the expression "proceeds of crime" is wide enough to include not only directly derived property but also property of equivalent value, and that such equivalent-value property may be attached even if acquired prior to the commission of the predicate offence when the actual tainted property is unavailable. It also found that the appellants failed to discharge the burden cast by the statutory presumption.

Conclusion: The provisional attachment and its confirmation were upheld, and the challenge to the attachment failed.

Ratio Decidendi: Under the money-laundering law, "proceeds of crime" includes the value of illicit gains, and where the actual tainted property is not traceable, property of equivalent value may be attached even if it was acquired before the predicate offence, unless the affected party rebuts the statutory presumption.

Issues: Whether the interim application seeking immediate return of INR 1,54,15,300/- and related interim reliefs during the pendency of appeals should be granted.

Analysis: The re-quantification order of the Adjudicating Authority dated 11.03.2025 is under challenge by the Directorate in a cross-appeal pending before this Tribunal; allowing the interim application would risk dissipation of funds and frustrate the object of attachment under Section 5 of the Prevention of Money Laundering Act, 2002 which ensures availability of proceeds of crime for confiscation. The impugned sum is not traceable as specific, identifiable attached properties; the factual matrix differs from cases where specific immovable properties were not confirmed and could be released. Granting the relief sought would amount to granting final relief at an interlocutory stage and could render the Directorate's pending appeal infructuous. On balance of convenience and to prevent irreparable loss to the respondent, the interim relief is inappropriate pending final adjudication of the appeals. The Tribunal directed expeditious consolidation and hearing of connected matters to protect the interests of both parties.

Conclusion: Interim application dismissed; relief refused and the application stands dismissed in favour of the Respondent.

1. ISSUES PRESENTED AND CONSIDERED

(i) Whether properties acquired prior to the alleged scheduled offence can be provisionally attached under the Act of 2002 as "proceeds of crime" on an equivalent value basis when the actual proceeds of crime are not traceable/available.

(ii) Whether, on the material placed, the confirmation of provisional attachment was justified on the footing that a prima facie case of money-laundering existed and that unpaid loan amount represented proceeds of crime which had allegedly been siphoned off/vanished.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Attachment of properties acquired prior to the offence as "proceeds of crime" (equivalent value)

Legal framework (as discussed by the Tribunal): The Tribunal examined the definition of "proceeds of crime" and treated it as comprising distinct limbs, including (a) property derived/obtained directly or indirectly from criminal activity relating to the scheduled offence, and (b) "the value of any such property", i.e., attachment of property of equivalent value when the tainted property is not available/traceable. The Tribunal also relied on binding higher-court interpretation that the definition is wide enough to cover not only tainted property but also the value thereof, so as to further the object of the Act of 2002.

Interpretation and reasoning: The Tribunal rejected the contention that properties acquired prior to the alleged offence are immune from attachment. It held that such a reading would render the "value of any such property" limb redundant and would frustrate the statute's purpose, because an accused could siphon off or make unavailable the actual tainted property and thereby defeat attachment. The Tribunal accepted the respondent's position that, since the proceeds of crime to the relevant extent were not found available during investigation (having allegedly vanished/siphoned off), attachment of properties of equivalent value was permissible even if those properties were acquired earlier, provided the attachment is limited to the quantified value of proceeds considered untraceable.

Conclusion: The Tribunal conclusively held that properties acquired prior to the commission of the alleged offence can be provisionally attached as "proceeds of crime" on an equivalent-value basis where the actual proceeds of crime are not traceable/available, and that the appellants' contrary argument was untenable.

Issue (ii): Justification for confirmation of provisional attachment on a prima facie money-laundering case and quantified untraced proceeds

Legal framework (as applied): The Tribunal proceeded on the basis that provisional attachment may be confirmed where there is a prima facie case of money-laundering and where the attachment corresponds to proceeds of crime (including equivalent value where proceeds are not traceable). It also noted that final determination of guilt for the scheduled offence is for the trial court, while attachment proceedings can proceed on prima facie evaluation.

Interpretation and reasoning: The Tribunal found it undisputed that a substantial loan remained unpaid to the extent quantified, and that multiple facts were recorded regarding irregularities connected with the securing/liquidation of policies (including dishonour of instruments and irregular/forged documentation). It rejected the appellants' attempt to shift blame to the insurer/bank for non-liquidation, holding that the onus to repay the loan remained on the borrowers. While observing that the final finding on the scheduled offence would be recorded by the trial court, the Tribunal held that the material nevertheless disclosed a prima facie case of money-laundering and supported the conclusion that proceeds of crime to the quantified extent were not available and, therefore, attachment for equivalent value was warranted.

Conclusion: The Tribunal upheld the confirmation of the provisional attachment to the quantified extent, found no merit in the appellants' limited challenge (confined mainly to pre-acquisition of properties), and dismissed the appeals.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether, in the absence of identifiable "proceeds of crime", properties in the possession of accused persons or their associates can be attached as "value thereof" under the Prevention of Money Laundering Act, 2002, even if acquired prior to the commission of the scheduled offence.

1.2 Whether the Appellate Tribunal has the power to permit a secured creditor bank to auction a mortgaged property already attached and its attachment confirmed under the Prevention of Money Laundering Act, 2002, prior to conclusion of the criminal trial, and if so, on what conditions.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Attachment of properties as "value thereof" in absence of direct proceeds of crime

Legal framework (as discussed)

2.1 The Court proceeded on the basis of the scheme of attachment under the Prevention of Money Laundering Act, 2002, including attachment of "proceeds of crime" and of other properties as "value thereof" when the direct proceeds are not available.

Interpretation and reasoning

2.2 The Court noted that, based on investigation and charge-sheets, loan funds sanctioned and disbursed to the borrowing firm had been largely siphoned off and mis-utilized by the borrowers in connivance with certain other accused, resulting in the account turning into a Non-Performing Asset with substantial outstanding dues.

2.3 It was observed that the direct proceeds of crime could not be traced in the possession of the borrowers or their firm, and therefore the Enforcement Directorate had attached four properties as "value thereof", including the mortgaged flat at serial no. 1, even though that flat had been purchased earlier under a separate housing loan transaction.

2.4 The Court expressly recorded its view that, in the absence of direct proceeds of crime, "any property in possession of the accused persons, their relatives, associates & employees can be attached as value thereof, seeing their role for helping in layering/siphoning of the proceeds of crime."

Conclusions

2.5 The attachment of properties as "value thereof" in the hands of accused persons or their associates is permissible where direct proceeds of crime are not available or traceable, irrespective of whether such properties were acquired prior to the commission of the scheduled offence, provided their possession and the role of the concerned persons in the offence justify such attachment.

Issue 2 - Power of the Appellate Tribunal to permit auction of attached mortgaged property by the secured creditor before conclusion of trial, and conditions thereof

Legal framework (as discussed)

2.6 The Court considered the operation of attachment under the Prevention of Money Laundering Act, 2002, the rights of a secured creditor bank over a mortgaged property, and the procedure for enforcement of security interest under the SARFAESI Act.

2.7 The respondent contended that, under Sections 8(6) to 8(8) of the Prevention of Money Laundering Act, 2002, recourse should be taken before the Special Court (PMLA Court) for auction of an attached property, and that the Appellate Tribunal was not empowered to grant such permission.

Interpretation and reasoning

2.8 The Court accepted in principle that properties could be attached as "value thereof", but distinguished the position where such properties were mortgaged to a bank as a secured creditor.

2.9 It held that, in the case of mortgaged properties, "no useful purpose will be served by directing the bank to wait for conclusion of the trial and thereafter, obtain permission from the trial court for auction of the said properties."

2.10 The Court expressly rejected the contention that the Appellate Tribunal lacked power to permit auction before the conclusion of trial, stating that "there is no bar that this Appellate Tribunal cannot exercise the said power to grant permission to the Appellant Bank even prior to the conclusion of the trial", and cautioned that refusal to do so "may result in financial constraint to the Appellant Bank."

2.11 The Court also took note that the appeal was pressed only in relation to the property at serial no. 1, which had been independently mortgaged to the appellant bank under a housing loan well before the generation of the alleged proceeds of crime, and that the loan account of the borrowing firm had subsequently been settled with the bank under a one-time settlement.

Conclusions

2.12 The Appellate Tribunal possesses the authority to permit a secured creditor bank to auction an attached mortgaged property even prior to conclusion of the trial under the Prevention of Money Laundering Act, 2002; it is not restricted to directing the bank to seek such relief only from the Special Court under Sections 8(6) to 8(8).

2.13 In exercising such power, the Tribunal may balance the enforcement needs under the Prevention of Money Laundering Act, 2002, with the secured creditor's rights and financial constraints, and can impose conditions to safeguard the interest of the Enforcement Directorate.

2.14 Applying this approach, the Court allowed the appeal in respect of property at serial no. 1 and directed that the appellant bank is permitted to auction the said mortgaged flat in accordance with the procedure laid down in the SARFAESI Act, subject to the condition that, after discharge of its outstanding liabilities from the sale proceeds, the bank shall deposit the excess amount, if any, with the Enforcement Directorate in the form of a fixed deposit receipt, to be dealt with in accordance with law.

2.15 The Court clarified that these directions regarding auction and deposit of surplus amounts are without prejudice to, and shall not affect, the merits of the pending criminal trial.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the material on record established that the appellant was involved in fraudulent remittances abroad and thereby generated "proceeds of crime" liable to action under the Prevention of Money Laundering Act, 2002.

1.2 Whether properties of the appellant and his family, including those acquired prior to the alleged criminal activity, could be attached as "proceeds of crime" or as property of "equivalent value" under Section 2(1)(u) read with Section 5 of the Act.

1.3 Whether ongoing SARFAESI proceedings, mortgage, and NPA status of the attached properties barred or affected attachment under the Act.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Existence of "proceeds of crime" and involvement of the appellant

Legal framework (as discussed)

2.1 The Tribunal proceeded on the basis of the definition of "proceeds of crime" under Section 2(1)(u) of the Act, including any property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence, and the value of any such property.

2.2 The Tribunal relied on the scheme of the Act concerning money laundering as a process or activity connected with "proceeds of crime" as explained by the Supreme Court in Vijay Madanlal Choudhary.

Interpretation and reasoning

2.3 The Tribunal found, on the basis of statements recorded under Section 50 of the Act and extensive documentary evidence obtained from Bank of Baroda and other banks, that the appellant had created and used multiple front firms in the names of employees and persons of no financial means solely for the purpose of remitting funds abroad under the guise of import of software.

2.4 It was noted that the purported import firms had no infrastructure or capacity to import or process software; Chartered Accountants' statements and fake certificates were used to project sham software imports; and the software was admittedly never imported.

2.5 The Tribunal recorded that proforma invoices and declarations were generated in India and submitted to banks to obtain foreign exchange for remittances to foreign companies controlled or managed by the appellant in Hong Kong and Dubai, without any genuine import intention.

2.6 The Tribunal held that the appellant was the key person orchestrating the scheme, using 59 firms/companies and dummy proprietors/directors to effect bogus remittances of foreign exchange equivalent to approximately Rs. 39 crores, thereby acquiring "proceeds of crime".

Conclusions

2.7 The Tribunal concluded that overwhelming evidence established a fraudulent modus operandi of obtaining foreign exchange and remitting it abroad without actual imports, constituting "proceeds of crime" under Section 2(1)(u), and justified action under the Act.

Issue 2 - Attachment of properties acquired prior to the alleged crime and concept of "equivalent value"

Legal framework (as discussed)

2.8 Section 2(1)(u) of the Act (definition of "proceeds of crime"), including "the value of any such property" and "property equivalent in value" where property is taken or held outside the country, was reproduced and relied upon.

2.9 The Tribunal referred to and relied on: (i) the Supreme Court judgment in Vijay Madanlal Choudhary explaining that the relevant date for money-laundering is the date of the laundering process/activity, not the date of the predicate offence; and clarifying that money-laundering is a continuing offence; (ii) paragraph 68 of the same judgment upholding the width of "proceeds of crime" including "value of any such property", irrespective of whether the property is held outside India; (iii) the Delhi High Court judgment in Prakash Industries (following Axis Bank), clarifying the scope of "value of any such property" and "property equivalent in value held within the country or abroad"; and (iv) this Tribunal's own judgment in Sadananda Nayak reiterating that all three limbs of the definition of "proceeds of crime" must be given effect and that properties acquired prior to the commission of crime may be attached as "equivalent value" in appropriate circumstances.

Interpretation and reasoning

2.10 The appellant's primary contention that the attached properties were acquired between 1996-2007, much before registration of the FIR in 2015, and thus could not be "proceeds of crime", was rejected in light of the above precedents. The Tribunal held that: (i) the offence of money-laundering is linked to the process/activity of dealing with proceeds of crime, not to the date of acquisition of the property or date of the scheduled offence; and (ii) the date of laundering activity is decisive.

2.11 The Tribunal endorsed the view that Section 2(1)(u) covers not only property directly derived from the scheduled offence, but also any property representing "the value of any such property", as well as property equivalent in value where the tainted property is taken/held outside India or is untraceable.

2.12 Relying on Prakash Industries and Axis Bank, the Tribunal held that it is permissible to proceed against untainted properties as "value of any such property" or "property equivalent in value" when the actual tainted property is not available, provided there is equivalence in value and the other statutory safeguards are observed.

2.13 The Tribunal agreed with the reasoning that to interpret the definition of "proceeds of crime" by ignoring or restricting the "value thereof" limb would defeat the object of the Act, as it would allow an accused to siphon off or vanish the tainted assets immediately after commission of the scheduled offence, leaving no attachable property.

2.14 The Tribunal further endorsed its prior view in Sadananda Nayak that properties acquired prior to the commission of the scheduled offence are not per se immune from attachment if taken as "equivalent value" when the actual proceeds of crime are untraceable or held abroad, and that such an interpretation alone gives full meaning to all limbs of Section 2(1)(u).

2.15 On facts, the Tribunal noted that the foreign exchange constituting "proceeds of crime" had been remitted abroad and was not available in India. Therefore, attachment of the appellant's and his family's properties was made as "equivalent value" under Section 5 read with Section 2(1)(u). The Tribunal observed that the value of attached properties (Rs. 17.52 crores) was less than 50% of the alleged proceeds of crime (about Rs. 39 crores), reinforcing proportionality and the "equivalent value" rationale.

Conclusions

2.16 The Tribunal held that, consistent with the statutory definition and binding judicial precedents, properties acquired prior to the alleged crime can be attached as "value of any such property" or "equivalent in value" where the actual proceeds of crime are not available.

2.17 Accordingly, the plea that pre-crime acquisition insulated the attached properties from action under the Act was rejected, and the attachment as "equivalent value" was upheld.

Issue 3 - Effect of SARFAESI proceedings, mortgage, and NPA status on attachment under the Act

Legal framework (as discussed)

2.18 The Tribunal relied on Section 71 of the Act, which provides that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

Interpretation and reasoning

2.19 The appellant contended that certain attached properties were mortgaged to financial institutions, that loan accounts had become NPAs, and that recovery actions under the SARFAESI Act were underway; this, it was argued, should be considered against attachment under the Act.

2.20 The Tribunal, referring to Section 71, held that proceedings and rights under the SARFAESI Act cannot override or invalidate attachment under the Act, since the Act has overriding effect over other inconsistent laws.

Conclusions

2.21 The Tribunal concluded that SARFAESI proceedings, mortgage status, or NPA character of the accounts do not constitute a ground to set aside or interfere with attachment under the Act.

Overall Result

2.22 In light of the above findings, the Tribunal held that the appeal was devoid of merit and dismissed it, thereby affirming the confirmation of attachment of the properties in question.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether immovable property standing in the name of a separate company, controlled by the accused director and having no genuine business activity, can be attached as "value of such property" under the Prevention of Money Laundering Act, 2002, in connection with money-laundering involving another company.

1.2 Whether a property acquired prior to the period of commission of the scheduled offence can be attached as "the value of any such property" within the definition of "proceeds of crime" under Section 2(1)(u) of the Prevention of Money Laundering Act, 2002, where the actual proceeds of crime are not available.

1.3 Whether the appellants discharged the statutory burden under Section 8(1) of the Prevention of Money Laundering Act, 2002, to prove the legitimate source of acquisition of the attached property.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Attachment of property held by a separate company controlled by the accused

Interpretation and reasoning

2.1 The Court recorded as an admitted fact that the common individual (Sh. Luv Bhardwaj) was a director in both the borrower company (against whom the scheduled offences and diversion of funds are alleged) and the appellant company in whose name the attached property stands.

2.2 In his statement under Section 50 of the Act, the said individual categorically stated that he was the major shareholder of the appellant company and that the other director had been inducted only to complete quorum and sign documents.

2.3 Investigations revealed that the appellant company had no business activity during the relevant period. On these facts, the Court concurred with the respondent's contention that the appellant company was a "shell company" and that the other director was merely a dummy director installed by the controlling individual.

2.4 The Court noted that the Adjudicating Authority had treated the attached property not as "direct proceeds of crime" but as "value of such property," in view of the diversion of large sums from the borrower company and the flow of funds to related or offshore entities, while the appellant company itself had no legitimate business operations.

Conclusions

2.5 The Court held that, in the circumstances where the appellant company was found to be a shell entity controlled by the accused director of the borrower company, its property was liable to be proceeded against and attached as "value of such property" and the objection that it was a distinct legal entity not implicated in the predicate offence was rejected.

Issue 2 - Attachment of property acquired prior to the commission of the scheduled offence as "value of such property"

Legal framework as discussed

2.6 The Court relied upon prior detailed judgments of the Tribunal and higher courts interpreting Section 2(1)(u) of the Act, particularly as examined in earlier Tribunal decisions and in light of the judgments in Vijay Madanlal Choudhary, Axis Bank, Prakash Industries, and other authorities.

2.7 Section 2(1)(u) defining "proceeds of crime" was noted, as construed in the Tribunal's earlier decisions, to have three distinct limbs separated by the word "or": (i) property derived or obtained directly or indirectly from criminal activity relating to a scheduled offence; (ii) "the value of any such property"; and (iii) in case such property is taken or held outside the country, "property equivalent in value held within the country or abroad."

2.8 The Court adopted the reasoning that the second limb ("the value of any such property") authorises attachment of property of equivalent value when the directly traceable proceeds of crime are not available or have been siphoned off or vanished, and that this power is not confined to cases where the property has been taken outside India.

2.9 The Court endorsed the position that restricting the definition to only properties acquired after commission of crime, or ignoring the second limb, would render the middle part of the definition redundant and frustrate the object of the Act by enabling accused persons to dissipate or conceal the tainted property.

2.10 The Court referred to the detailed analysis in prior Tribunal and High Court decisions which rejected the contrary view taken in certain High Court judgments (including those holding that properties acquired prior to the crime could not be attached), on the ground that such views overlook the full import of Section 2(1)(u) as interpreted in light of paragraph 68 of Vijay Madanlal Choudhary and the concept of "deemed tainted property" explained in Axis Bank and Prakash Industries.

2.11 The Court accepted that, as clarified in these authorities, properties acquired even prior to the commission of the scheduled offence may fall within "the value of any such property" and be attachable of equivalent value when: (i) the person accused of money-laundering had an interest in such property at least till the time of the proscribed criminal activity, and (ii) the directly traceable proceeds of crime are unavailable, having been siphoned off or vanished.

Conclusions

2.12 Applying the above legal position, the Court held that the fact that the subject property was purchased prior to the period of commission of the alleged bank fraud does not by itself immunise it from attachment as "value of such property" under Section 2(1)(u), when the actual proceeds of crime are not available.

2.13 The Court therefore rejected the argument that the temporal precedence of the acquisition of the property, vis-à-vis the scheduled offence, barred its attachment and found no legal infirmity in treating it as "value of such property."

Issue 3 - Burden under Section 8(1) to prove legitimate source of acquisition

Legal framework as discussed

2.14 The Court referred to the express language of Section 8(1) of the Act, under which the onus is entirely upon the noticee to explain the sources of income, earnings or assets out of which the attached property has been acquired, and to produce the evidence relied upon to establish legitimate acquisition.

Interpretation and reasoning

2.15 During the appellate proceedings, the Court specifically requested the appellants to state how they had discharged their burden of proving the legitimate sources for acquisition of the subject property, and what explanation, if any, had been tendered before the Adjudicating Authority on this aspect.

2.16 Despite repeated queries, the appellants were unable to explain the legitimate sources of acquisition of the property or indicate any cogent explanation or supporting evidence furnished before the Adjudicating Authority.

Conclusions

2.17 The Court held that the appellants had failed to discharge the statutory burden under Section 8(1) to prove the lawful source of acquisition of the attached property, both before the Adjudicating Authority and before the Appellate Tribunal.

2.18 In view of (i) the finding that the appellant company was a shell entity controlled by the accused director, (ii) the settled legal position that properties acquired prior to the scheduled offence can be attached as "value of such property" when the proceeds of crime are not available, and (iii) the appellants' failure to discharge the burden under Section 8(1), the Court found no reason to interfere with the confirmation of attachment and dismissed the appeals.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the pendency of criminal appeal and suspension of sentence in the scheduled offence case rendered the money-laundering attachment proceedings under the PMLA liable to be deferred or untenable.

1.2 Whether the provisional attachment and its confirmation were invalid for want of pendency of PMLA prosecution proceedings and/or for lapse of the 180-day period under Section 5(1) read with Section 8(3) of the PMLA, as amended.

1.3 Whether the statutory requirement of "reason to believe" under Sections 5(1) and 8(1) of the PMLA was not complied with, vitiating the provisional attachment and adjudication proceedings.

1.4 Whether the attached immovable properties and bank balances of the primary appellant were shown to be "proceeds of crime" within Section 2(1)(u) of the PMLA, and whether the appellant discharged the burden of explaining their legitimate acquisition.

1.5 Whether offences under Sections 120-B and 420 of the Ranbir Penal Code constitute "scheduled offences" under the PMLA and whether any monetary threshold under Section 2(1)(y) barred initiation of PMLA proceedings in this case.

1.6 In respect of the daughter's appeal, whether the amount credited to her bank account from her father's account constituted "proceeds of crime," attachable under Section 5 of the PMLA notwithstanding her claim of bona fides and lack of knowledge.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Effect of pendency of criminal appeal and suspension of sentence in the scheduled offence case

Interpretation and reasoning

2.1 The Tribunal noted that the appellant stood convicted in the scheduled offence by the Trial Court. The High Court's order suspending sentence was found to be based on the precarious health condition of the appellant, and not on an evaluation of the merits of the conviction.

2.2 It was observed that there was no order of discharge, acquittal, or quashing of the FIR by any competent court. Hence, the scheduled offence subsisted and continued to form a valid predicate for PMLA proceedings.

Conclusion

2.3 The pendency of criminal appeal and suspension of sentence did not render the money-laundering proceedings untenable or warrant deferment; no relief could be granted to the appellant on the plea of innocence in the scheduled offence case.

Issue 2 - Validity of attachment and confirmation in light of Section 8(3) PMLA and alleged lapse of 180 days

Legal framework (as discussed)

2.4 The appellant argued that, post-amendment to Section 8(3), attachment could continue only if proceedings relating to an offence "under this Act" (i.e., a PMLA prosecution complaint) were pending, and that in the absence of any such proceedings within 180 days, the provisional attachment lapsed.

2.5 The Respondent relied on Section 5(3) and the legal position prior to the 2018 amendment, and on the Tribunal's decision in Indra Pal Pandey, to contend that up to 18.04.2018 there was no statutory time limit for filing a prosecution complaint under Section 8(3).

Interpretation and reasoning

2.6 The Tribunal recorded that the Provisional Attachment Order (PAO) dated 25.03.2014 was confirmed by the Adjudicating Authority on 12.08.2014, well within the 180-day period provided in Section 5(1).

2.7 It accepted the Respondent's contention, following Indra Pal Pandey, that before 19.04.2018, Section 8(3) did not stipulate any time limit for completion of investigation or for filing of prosecution complaint, nor did it impose a requirement of pendency of PMLA proceedings as a pre-condition for continuation of attachment.

2.8 The Tribunal held that the subsequent amendments introducing time limits (90 days, later 365 days) became effective only from 19.04.2018 and 20.03.2019 respectively and could not govern attachments and confirmations made in 2014.

Conclusion

2.9 The Tribunal rejected the contention that the PAO lost validity after 180 days or that the confirmation order was without jurisdiction for want of pending PMLA prosecution. The attachment and its confirmation were held to be valid and in conformity with the then prevailing statutory framework.

Issue 3 - Compliance with "reason to believe" requirements under Sections 5(1) and 8(1) PMLA

Legal framework (as discussed)

2.10 The appellant relied on judicial precedents (including P. Chidambaram, Seema Garg, J. Sekar, Mahanivesh Oils, Aftabuddin Ahmed) to contend that recording of "reason to believe" in writing, based on relevant material, and communication thereof was mandatory; mechanical reproduction of statutory phrases or mere suspicion would not suffice; non-compliance would vitiate the attachment and adjudication.

2.11 The Respondent relied, inter alia, on the decision of the Madras High Court in G. Gopalakrishnan to submit that Section 5 did not mandate communication of reasons before ordering attachment, and that Section 8(1) did not require separate recording of reasons by the Adjudicating Authority beyond subjective satisfaction drawn from the complaint under Section 5(5).

Interpretation and reasoning

2.12 Examining the PAO, the Tribunal found that the Joint Director had set out in detail: the allegations in the scheduled offence, the manner of receiving Rs. 60 lakh, the financial and property holdings of the appellant, bank transactions (including cash deposits and transfers), and the linkage to alleged criminal proceeds.

2.13 The Tribunal noted that Para 5 of the PAO expressly recorded the apprehension that non-attachment would frustrate confiscation proceedings under PMLA, including the reasoning that the properties were located at prime locations and likely to be sold or otherwise disposed of, thereby justifying preventive attachment.

2.14 Relying on G. Gopalakrishnan, the Tribunal held that Section 5 does not stipulate communication of reasons in the form of a separate show-cause notice at the stage of provisional attachment, and that a PAO, valid for 180 days, itself functions as an initial show-cause mechanism.

2.15 As regards Section 8(1), the Tribunal held that the Adjudicating Authority is not statutorily required to record separate detailed "reasons to believe" and may act on the complaint under Section 5(5) based on subjective satisfaction. The Original Complaint in this case was held to sufficiently outline the predicate offence, property details, and bank transactions to justify initiation of adjudication.

Conclusion

2.16 The Tribunal held that the requirement of "reason to believe" under Section 5(1) was duly complied with and that the Original Complaint provided adequate material for satisfaction under Section 8(1). The challenge to the attachment and adjudication on this ground was rejected.

Issue 4 - Whether the attached properties and bank balances of the primary appellant constituted "proceeds of crime" and whether the burden of proof was discharged

Legal framework (as discussed)

2.17 The Tribunal referred to the definition of "proceeds of crime" in Section 2(1)(u) and to the jurisprudence (including Vijay Madan Lal Choudhary and Nikesh Tarachand Shah as cited by the appellant) emphasising that property must be derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence, and that money-laundering under Section 3 involves processes or activities connected with such proceeds.

2.18 The Tribunal reiterated that under the PMLA scheme the burden of proving legitimate acquisition of attached properties lies on the person proceeded against.

Interpretation and reasoning - General income explanation

2.19 The appellant's reliance on aggregate salary and retirement benefits received by him and his wife over a decade, without correlating specific properties and transactions to identifiable lawful sources, was held to be broad, non-specific and insufficient to discharge the statutory onus.

Interpretation and reasoning - Property-wise findings

Plot of 5 marlas with shed, Sidra, Jammu

2.20 The appellant claimed acquisition for Rs. 22 lakh (against the wife's statement of about Rs. 25 lakh), partly from a bank loan of Rs. 15 lakh from J&K Bank and partly from savings. The Tribunal noted that the deed did not mention the consideration value and that the reduced figure of Rs. 22 lakh was unsupported by any evidence and appeared to be an afterthought.

2.21 Scrutiny of the relevant bank account (No. 0007040100006179) showed certain payments towards the property (Rs. 2 lakh and Rs. 50,000/- in April-May 2013) preceded by deposits with narrations like "TRF" and "Cash," the nature and source of which were unexplained.

2.22 The Tribunal found that the appellant had failed to relate the full consideration to bank entries or to explain the sources of deposits that funded the payments. It noted that while the PAO had given credit for the Rs. 15 lakh bank loan, it rightly treated the balance part of the property value (Rs. 12,90,079.99) as unexplained and attached to that extent.

Flat No. 4, Building No. 125, Block-A, Freedom Fighter Enclave, Neb Sarai, New Delhi

2.23 The property was shown in a GPA as valued at Rs. 15 lakh, but the appellant stated that the actual consideration was Rs. 25 lakh (Rs. 15 lakh by cheque, Rs. 10 lakh in cash), allegedly from his salary and bank withdrawals.

2.24 The Tribunal found that the appellant had not linked these payments to bank account entries. On examining Account No. 0007040100006179, it noted cheque payments of Rs. 5 lakh, Rs. 3 lakh, and Rs. 5 lakh in May-June 2012 to the seller, as well as Rs. 2 lakh from HDFC Account No. 04151930017391 to M/s Bonton Optics (the seller's firm), but found no coherent explanation or correlation by the appellant to legitimate, traceable sources.

2.25 The Tribunal held that the appellant failed to establish legitimate funding of this acquisition, and his explanation with regard to this flat was rejected.

Flat No. 2/2A, Custodian General Flat, Wazarat Road, Jammu

2.26 The appellant contended that this leasehold flat was acquired in 2010, two years before the alleged money-laundering transactions, and therefore unconnected. The property was attached to the extent of Rs. 11 lakh representing security deposits with the Custodian General.

2.27 Review of Account No. 04151930017391 showed a payment of Rs. 10 lakh to one Hamidullah Bhat on 26.07.2013, preceded by a receipt of an identical amount from appellant's own HDFC Account No. 041510000002228. The Tribunal noted that the source of this Rs. 10 lakh in the appellant's hands remained unexplained.

2.28 In the absence of proof of legitimate origin of the funds used in relation to this property, the Tribunal held that there was no evidence on record of lawful acquisition of the concerned interest/security deposit, justifying attachment.

HDFC Account No. 041510000002228 (balance Rs. 4,57,243/-)

2.29 The Tribunal found unexplained cash deposits of Rs. 1 lakh and Rs. 5 lakh on 02.07.2012 and another Rs. 40,000/- on 17.10.2012 totaling Rs. 6.40 lakh. Despite the appellant's reliance on his overall salary earnings, there was no specific explanation of why such amounts were received in cash or the source thereof.

2.30 Considering that the allegations involved receipt of Rs. 60 lakh as illegal consideration for leaking examination papers, and that there was no plausible lawful explanation for the cash deposits, the Tribunal upheld attachment of the balance of Rs. 4,57,243/- as traceable to proceeds of crime.

Conclusion

2.31 The Tribunal held that the appellant had entirely failed to discharge the statutory burden of proving legitimate acquisition of the attached properties and bank balances. The attached assets were rightly treated, wholly or in relevant part, as "proceeds of crime" or their value, and the confirmation of attachment was upheld.

Issue 5 - Whether Ranbir Penal Code offences are "scheduled offences" and whether any monetary threshold under Section 2(1)(y) barred proceedings

Legal framework (as discussed)

2.32 The appellant argued that offences under Sections 120-B and 420 of the Ranbir Penal Code were not "scheduled offences" and that the value of the attached property was below the monetary threshold envisaged for certain scheduled offences under Section 2(1)(y).

2.33 The Respondent contended that the relevant Ranbir Penal Code provisions correspond to Sections 120-B and 420 IPC, which are included in Part A of the Schedule to the PMLA. It was further submitted that Section 2(1)(y) prescribes no threshold for Part A offences.

Interpretation and reasoning

2.34 The Tribunal accepted that the Ranbir Penal Code provisions correspond to the IPC offences that are expressly included in Part A of the Schedule, and that PMLA extends to Jammu & Kashmir.

2.35 It was noted that no monetary threshold under Section 2(1)(y) applies to offences in Part A of the Schedule, and thus no "value" condition restricted applicability in the present case.

2.36 The Tribunal recorded that, at the stage of oral hearing, the appellant's counsel did not press the contention regarding non-applicability of PMLA to Ranbir Penal Code offences.

Conclusion

2.37 The offences under Sections 120-B and 420 Ranbir Penal Code were held to be scheduled offences for PMLA purposes, and no monetary threshold barred the proceedings. The ground was rejected.

Issue 6 - Attachment of funds in the daughter's bank account and application of PMLA to property held in another's name

Legal framework (as discussed)

2.38 The Tribunal noted the settled position under Section 5 PMLA, as explained in Vijay Madan Lal Choudhary, that the statute aims to reach proceeds of crime irrespective of in whose name or hands such property is held.

2.39 The burden, once Section 8 notice is issued, lies on the noticee to show that the property in his or her name is not proceeds of crime but legitimately acquired.

Interpretation and reasoning

2.40 It was found that Rs. 10 lakh was transferred on 26.07.2013 into the daughter's HDFC Account No. 04151530005241 from her father's Account No. 04151900017391, which in turn had been funded by unexplained amounts from the father's other account.

2.41 Since, in the father's case, it had already been held that he was in receipt of Rs. 60 lakh as proceeds of crime from leakage of examination papers and that the funds used for various transfers were unexplained, the Tribunal held that the Rs. 10 lakh transferred to the appellant-daughter's account bore the same taint.

2.42 The daughter's pleas that she is a doctor, was living separately, had received marriage gifts, and lacked knowledge of the illicit origin of money were held insufficient to rebut the statutory presumption. No concrete evidence was produced to demonstrate that the impugned funds in her account arose from lawful sources independent of her father's tainted funds.

2.43 The Tribunal emphasised that PMLA attaches proceeds of crime "in whosoever's name they are kept or by whosoever they are held," and the humanitarian or familial context does not, by itself, neutralise the illegality of the source once proceeds of crime are traced to the account.

Conclusion

2.44 The Rs. 10 lakh credited to the daughter's bank account was held to constitute proceeds of crime passed on from her father and thus validly attached. The appeal filed by the daughter was dismissed, following and adopting the reasoning in the father's case.

Issues: Whether proceedings under the Prevention of Money-laundering Act, 2002 could survive when the scheduled offence had culminated in acceptance of the closure report and no scheduled offence remained pending.

Analysis: The appeal was examined in the light of the settled principle that money-laundering proceedings are dependent on the existence of a scheduled offence and the related allegation of proceeds of crime. The closure report in the predicate case had been accepted by the trial court, and that factual position was not effectively disputed. The cited authorities relied upon by the appellant were found distinguishable on facts, as they concerned different procedural contexts, including quashing proceedings, pending parallel offences, or criminal revision before a court having appropriate jurisdiction. On the facts before the Tribunal, the order of the criminal court accepting the closure report continued to operate, and no contrary order had been shown to exist.

Conclusion: In the absence of a surviving scheduled offence, the PMLA proceedings could not be sustained, and the appeal was not fit for admission.