Issues: (i) whether provisional attachment under the second proviso to Section 5(1) of the Prevention of Money Laundering Act, 2002 was invalid for want of recorded apprehension that the appellants would conceal, transfer or otherwise deal with the properties so as to frustrate confiscation; and (ii) whether the attachment was unsustainable because the value of the attached properties exceeded the alleged proceeds of crime and was assessed on an impermissible basis.

Issue (i): whether provisional attachment under the second proviso to Section 5(1) of the Prevention of Money Laundering Act, 2002 was invalid for want of recorded apprehension that the appellants would conceal, transfer or otherwise deal with the properties so as to frustrate confiscation.

Analysis: Section 5(1) permits provisional attachment when the authority has reason to believe, recorded in writing, that proceeds of crime are likely to be concealed, transferred or dealt with in a manner that may frustrate confiscation. The second proviso specifically permits immediate attachment where non-attachment is likely to frustrate proceedings under the Act. The recorded reasons referred not only to one individual but also to the overall conduct of the persons concerned, including concealment of material information and a likelihood of disposal of the immovable properties liable to be attached. The use of the expression "likely" was treated as sufficient to found apprehension without waiting for actual alienation.

Conclusion: The attachment was validly supported by recorded reasons to believe, and the challenge on this ground failed.

Issue (ii): whether the attachment was unsustainable because the value of the attached properties exceeded the alleged proceeds of crime and was assessed on an impermissible basis.

Analysis: The definition of "value" in Section 2(1)(zb) of the Act means the fair market value of the property on the date of acquisition, or if that date cannot be determined, on the date of possession. The appellants sought to apply a different valuation basis through an independent valuer and to compare the attachment with the quantum of proceeds of crime received by them. The Tribunal held that the statute does not permit substitution of the legislative definition by a current market valuation standard, and that the appellants did not show any provision authorising a contrary valuation method. On the facts, the value taken by the respondents was also found to be below the proceeds of crime in the appellants' hands.

Conclusion: The valuation challenge was rejected, and the attachment was not disproportionate on the statutory basis applicable.

Final Conclusion: The appeals were devoid of merit and the provisional attachment, as confirmed by the Adjudicating Authority, was sustained.

Ratio Decidendi: Under Section 5(1) of the Prevention of Money Laundering Act, 2002, provisional attachment is justified on a recorded and reasonable apprehension of likely concealment, transfer or dealing with property to frustrate confiscation, and the statutory definition of "value" must be applied as enacted without judicially substituting a different valuation standard.

1. ISSUES PRESENTED AND CONSIDERED

(a) Whether there was absence of material to establish illegal quarrying of granite and generation of proceeds of crime.

(b) Whether the appellants were not involved in any scheduled offences as they were not named in the FIR and whether reliance on an unsigned charge-sheet vitiated PMLA proceedings.

(c) Whether the Directorate of Enforcement and the Adjudicating Authority lacked valid "reason to believe" under the Prevention of Money Laundering Act, 2002 for attachment and issuance of show-cause notice.

(d) Whether the property purchased on 20.09.2007, prior to the quarrying lease/permit, was an untainted property and thus outside the ambit of "proceeds of crime" under Section 2(1)(u) PMLA.

(e) Whether attachment under PMLA was impermissible as the relevant predicate/scheduled offences were added to the Schedule only with effect from 01.06.2009 and whether PMLA had been applied retrospectively.

(f) Whether PMLA proceedings were vitiated on the ground that "illegal mining" per se is not a scheduled offence.

2. ISSUE-WISE DETAILED ANALYSIS

(a), (b) and (c): Material regarding illegal quarrying; involvement in scheduled offences; existence of "reason to believe"

Interpretation and reasoning

The Court held that investigation into the commission of predicate/scheduled offences is the domain of the police/CBI, and the Directorate of Enforcement is not empowered to re-investigate such offences. In PMLA proceedings, ED is to focus on: (i) existence of prima facie incriminating material regarding the scheduled offence; (ii) quantum of proceeds of crime; (iii) whether proceeds of crime were laundered or likely to be laundered; (iv) mode of layering/trail of proceeds; (v) identification of other attachable properties if direct proceeds are dissipated; and (vi) genuineness or complicity of claimants/vendees of the attached properties. These factors are sufficient to form "reason to believe" for provisional attachment and for filing the complaint.

In this case, an FIR was registered against the appellants, inter alia, for illegal excavation of granite from unleased State land adjoining the leased area, causing loss to the Government and wrongful gain to the accused. Final reports/charge-sheets were filed wherein the appellants were arrayed as accused for multiple scheduled offences. The ED recorded its reasons to believe in the provisional attachment order and in the Original Complaint, including details of properties. The Adjudicating Authority reproduced these reasons, considered replies, rejoinders, and material including investigation reports and expert "Evaluation Report" based on scientific and systematic "Total Station Survey", showing illegal extraction and wrongful pecuniary benefits. On this basis, it concluded that the appellants had committed scheduled offences, caused wrongful loss of about Rs. 256.44 crores to the State and corresponding wrongful gain to themselves, sold granites in excess of declared quantities and realised sale proceeds which were used for acquiring properties.

The Court found that properties at Sl. No. 2 to 15 had been acquired from such proceeds of crime and that the property at Sl. No. 1 was attachable as property of equivalent value since the proceeds of crime far exceeded the value of the attached assets. The appellants failed to discharge the burden of proof to rebut the conclusions arising from investigation. It was further held that the existence and sufficiency of "reason to believe" stood clearly demonstrated on the record; lack of lengthy discussion did not undermine the validity of the reasoning. The contention that the charge-sheet being unsigned vitiated the PMLA proceedings was rejected in view of the existence of FIRs, final reports and sufficient prima facie material to show commission of scheduled offences and generation of proceeds of crime.

Conclusions

(i) There was adequate material to establish illegal quarrying and generation of proceeds of crime.

(ii) The appellants were prima facie involved in scheduled offences as reflected in FIRs and final reports; reliance by ED on such material was valid.

(iii) The ED and the Adjudicating Authority had validly recorded and exercised "reason to believe"; attachment and show-cause notice were lawful.

(d) Attachability of property acquired in 2007 as "proceeds of crime" or its equivalent value

Legal framework

The Court referred to Section 2(1)(u) PMLA defining "proceeds of crime" as: (i) any property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence; and (ii) "the value of any such property"; including, where property is outside India, equivalent property held within India or abroad, as clarified by the Explanation.

The Court relied on the interpretation of "proceeds of crime" in decisions analysing the three limbs of the definition, including discussion that action can extend to "untainted property" when attached as equivalent to the value of tainted property, particularly where the actual tainted property cannot be traced, subject to conditions and safeguards regarding the accused's interest at the relevant time and protection of bona fide third-party rights. The Court also drew support from the Supreme Court's pronouncement that the definition of "proceeds of crime" is wide enough to include the value of such property and authorises attachment of property equivalent in value for effective prevention of money-laundering.

Interpretation and reasoning

The appellants argued that the property purchased on 20.09.2007 (prior to the lease order of 14.07.2008 and prior to the period of alleged illegal quarrying) was untainted and, therefore, not "proceeds of crime". The Court held that even if the specific property is not directly derived from the criminal activity, attachment can validly extend to properties of equivalent value where the proceeds of crime are not available with the accused. The second limb of Section 2(1)(u) squarely covers attachment of property representing the value of tainted property.

Applying this interpretation, and in view of the magnitude of proceeds of crime generated vis-à-vis the value of the attached assets, the Court held that the 2007-acquired property could be attached as property of equivalent value, notwithstanding its acquisition prior to the commission of the scheduled offence, as the actual proceeds of crime were either laundered or not fully available. The earlier judicial pronouncements on this aspect, including the principle that such action is permissible where the tainted property cannot be traced and subject to the accused's continuing interest, were noted to support the ED's action.

Conclusions

(i) "Proceeds of crime" includes property representing the value of property derived from criminal activity.

(ii) The property acquired in 2007 was validly attached as property of equivalent value, even if not directly derived from the illegal quarrying.

(iii) The challenge to attachment of the 2007 property as untainted was rejected.

(e) Temporal applicability of PMLA where scheduled offences were added with effect from 01.06.2009; allegation of retrospective application

Legal framework

The Court referred to constitutional protection under Article 20 against conviction for an act which was not an offence under a law in force at the time of its commission, and to judicial authorities holding that for PMLA prosecution, what is relevant is the time of the act of money-laundering under Section 3, not the date of commission of the scheduled offence. It noted that the offence of money-laundering is a separate and, in many instances, a continuing offence, involving placement, layering, possession, use, concealment or projection of proceeds of crime as untainted, which may occur or continue after the commission of the scheduled offence and after its inclusion in the Schedule.

It relied on precedents which clarified that: (i) the relevant date for PMLA liability is when the proceeds of crime are projected or claimed as untainted; (ii) incorporation of offences into the Schedule brings the proceeds of those crimes within PMLA; and (iii) if a person continues, after the scheduled offence has become so notified, to possess, conceal, use or project proceeds of crime as untainted, he may be prosecuted for money-laundering regardless of when the predicate offence was committed. It also relied on the Supreme Court's conclusion that the offence of money-laundering is independent of the date of the scheduled offence and that the critical date is the date of engaging in the process or activity connected with proceeds of crime, which may be a continuing offence.

Interpretation and reasoning

The appellants contended that the predicate offences were added to the PMLA Schedule only from 01.06.2009 and that invoking PMLA amounted to impermissible retrospective application. The Court rejected this contention, holding that there can be no prosecution for money-laundering in respect of proceeds of crimes which were exhausted before PMLA became applicable, but where the acts of possession, use, concealment, or projection of proceeds of crime as untainted continued after the inclusion of the predicate offences in the Schedule, PMLA validly applies.

The Court emphasised that the relevant date is when the property is being projected or claimed as untainted or is otherwise being dealt with in the manner described in Section 3. Since the appellants continued to hold, possess, and utilise the proceeds of the scheduled offences and acquired properties therefrom after the relevant scheduled offences had come within the PMLA Schedule, the attachment and proceedings did not suffer from retrospective operation. The acts constituting money-laundering were independent and, in fact, continuing beyond 01.06.2009.

Conclusions

(i) The decisive factor is the timing of the acts constituting money-laundering, not merely the date of the predicate offence.

(ii) Where the appellants continued to deal with and project proceeds of crime as untainted after 01.06.2009, PMLA proceedings are not retrospective.

(iii) The objection based on post-2009 inclusion of predicate offences in the Schedule was rejected.

(f) Effect of "illegal mining" per se not being a scheduled offence

Interpretation and reasoning

The appellants urged that the alleged illegal mining activity itself was not a scheduled offence and hence PMLA could not be invoked. The Court held that this contention was misconceived because the prosecution for money-laundering was not founded solely on "illegal mining" as an independent head, but on multiple IPC and other statutory offences, which are included in the PMLA Schedule and which were invoked in the FIRs and final reports. The existence of one or more non-scheduled offences among several charges does not nullify PMLA proceedings where other scheduled predicate offences are clearly made out and have generated proceeds of crime.

Conclusions

(i) The fact that "illegal mining" simpliciter is not a scheduled offence does not invalidate PMLA action where other scheduled offences are involved.

(ii) Since multiple scheduled offences were alleged and supported by material, the PMLA proceedings and attachments remained valid.

Overall Outcome

All issues were decided against the appellants. The attachments of the properties and the impugned order confirming them were upheld, and the appeals were dismissed.

Issues: Whether the appeal against confirmation of provisional attachment required interference, and whether the appellant's protection in possession of the attached properties should continue upon disposal of the appeal.

Analysis: The appeal was pressed for disposal on the basis that the appellant was not contesting the impugned order further and sought continuation of the earlier status quo protection over possession. The attachment related to properties taken as equivalent value property under the PMLA, and the relief sought was aligned with the position that possession should ordinarily not be disturbed until the stage contemplated by the statute and the trial proceedings. The order notes that the interim protection earlier granted was to continue to that limited extent, and that any future entitlement of the appellant would depend upon the outcome of the trial and the statutory consequences under PMLA.

Conclusion: No interference was made with the provisional attachment or the impugned confirmation order, but the appellant's limited protection in relation to possession of the attached properties was continued.

Final Conclusion: The appeal was disposed of while maintaining only the existing interim protection regarding possession, leaving the merits to be dealt with independently in the PMLA trial proceedings.

Ratio Decidendi: Under the PMLA, confirmation of provisional attachment does not by itself foreclose limited interim protection regarding possession, and any further action concerning attached property remains dependent on the statutory stage reached in the trial proceedings.

1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the appellant's property could be validly attached under the Act of 2002 on the allegation that she was a recipient of "proceeds of crime", despite not being named as an accused in the FIRs or the ECIR.

(ii) Whether the specific monetary receipts relied upon by the respondents (salary from a group company; refund amounts received from a real infrastructure company; and advance amounts received under an agreement to sell from an associate company) were conclusively established, on the record, to be "proceeds of crime" or whether the appellant had disclosed legitimate sources supported by documentary evidence, thereby defeating the basis for attachment and confirmation.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Attachment of property of a person not named as an accused

Legal framework (as discussed by the Tribunal): The Tribunal considered the contention that absence of the appellant's name in the FIRs/ECIR prevents attachment, and held that for provisional attachment it is not necessary that proceeds should be in the hands of the accused; it can be in the hands of any person.

Interpretation and reasoning: The Tribunal rejected the proposition that non-implication as an accused is, by itself, a ground to invalidate attachment, and treated the decisive inquiry as whether the appellant was in fact a recipient of proceeds of crime, or could disclose a legitimate source for the amounts relied upon for attachment.

Conclusion: Non-naming of the appellant as an accused did not, by itself, bar attachment; the legality of attachment depended on proof that the relevant amounts in her hands were proceeds of crime.

Issue (ii): Whether the alleged receipts constituted proceeds of crime or were explained by documentary evidence

Legal framework (as applied in reasoning): The Tribunal proceeded on the premise that if the person discloses the source and is not a recipient of proceeds of crime, the provisional attachment cannot be sustained. It evaluated the evidentiary worth of documentary material (bank statements, income-tax scrutiny/assessment records, appointment order, agreement to sell, and tax disclosures) against the respondents' reliance on oral assertions.

Interpretation and reasoning (salary receipts): The Tribunal found the appellant produced documentary records showing salary credited over time (not as a lump sum), corresponding TDS deductions, income-tax scrutiny/assessment acceptance for the relevant years (including scrutiny under section 143 and block assessment under section 153), and an appointment order. The respondents relied mainly on a statement of an officer claiming he had not seen the appellant working during 2010-2016 and treated the salary as layering. The Tribunal held that documentary evidence could not be ignored in favour of such oral evidence, and concluded the salary receipts could not be treated as proceeds of crime.

Interpretation and reasoning (refunds from real infrastructure company): The Tribunal accepted the appellant's explanation, supported by bank statements, that she paid amounts for booking a villa (including a bank loan disbursal and other payments through banking channels) and, upon cancellation, received refunds in instalments. The Tribunal held the respondents wrongly characterized these refunds as proceeds of crime while ignoring the loan and transaction documents, and treated the receipts as return of booking money rather than illicit proceeds.

Interpretation and reasoning (advance under agreement to sell): The Tribunal accepted that the appellant received two RTGS payments totalling 50 lakhs as advance under an agreement to sell, with a contractual stipulation that failure to pay the balance within two years would result in forfeiture. The Tribunal further noted the appellant's tax return reflected tax paid on the forfeited advance amount, and held that the respondents ignored the agreement and tax disclosure while treating the receipts as proceeds of crime.

Conclusions: On all three components relied upon as "proceeds of crime", the Tribunal held the respondents' inference was contrary to documentary evidence. Since the appellant disclosed the sources and the amounts were not established as proceeds of crime, the provisional attachment and its confirmation were unsustainable; accordingly, both the provisional attachment order and the confirming order were set aside and the appeal was allowed.

Issues: (i) Whether the appellant NBFC had outsourced core lending and recovery functions in violation of RBI outsourcing directions, and (ii) whether the attachment and related findings based on the alleged proceeds of crime could be interfered with.

Issue (i): Whether the appellant NBFC had outsourced core lending and recovery functions in violation of RBI outsourcing directions.

Analysis: The service agreement and app-based lending model showed that the fintech/service providers were not confined to incidental support functions. They handled customer identification, KYC collection, processing of applications, disbursal mechanics, collections, recovery, and control of the lending platform. The arrangement effectively placed the core business of lending and recovery with the service providers, while the NBFC derived revenue without retaining meaningful control over the outsourced activities. The RBI outsourcing framework permits limited outsourcing but prohibits delegation of core management and sanctioning functions and requires the NBFC to retain ultimate control, due diligence, and compliance responsibility. On the facts found, the model was held to be a misuse of the outsourcing permission and contrary to RBI directions.

Conclusion: The issue was answered against the appellant and in favour of the respondent.

Issue (ii): Whether the attachment and related findings based on the alleged proceeds of crime could be interfered with.

Analysis: The material on record, including the complaints, FIRs, investigation findings, merchant-account routing, deductions as processing fees, abusive recovery practices, and the flow of funds through the app-based lending structure, supported the conclusion that the funds represented proceeds generated through the alleged scheduled offences. The Tribunal accepted the respondent's case that the bank accounts linked to the merchant IDs were traced to the alleged unlawful gains and that the appellant's explanations did not displace the factual basis for the impugned action.

Conclusion: The issue was answered against the appellant and in favour of the respondent.

Final Conclusion: The appeal failed on merits, and the Tribunal sustained the impugned order and the consequential attachment-related findings.

Ratio Decidendi: An NBFC cannot lawfully outsource its core lending, sanctioning, and recovery functions in a manner that cedes effective control to fintech service providers, and where the lending model is used to generate and route unlawful gains through such arrangements, the resulting funds may be treated as proceeds of crime for enforcement action.

Issues: Whether the retention of the seized cash and documents under the Prevention of Money Laundering Act, 2002 was justified when the appellants claimed that the cash was supported by cash book entries, balance-sheets and income-tax records.

Analysis: The Tribunal held that the appellants failed to discharge the burden of explaining the source of the seized cash. Mere production of cash books, balance-sheets and income-tax returns was held insufficient in the absence of corroborative bank statements or other reliable evidence showing lawful availability of cash with the individuals or firms concerned. The cash book and balance-sheet were treated as incapable of by themselves establishing possession of legitimately sourced cash, especially when they were not produced at the time of search and the surrounding circumstances indicated involvement in scheduled-offence proceeds. The retention order was also noted to be provisional and linked to the outcome of the pending trial.

Conclusion: The challenge to the retention of the seized cash and documents failed. The impugned order was sustained, and the appeals were dismissed.

Final Conclusion: The Tribunal upheld the continued retention of the seized cash and related documents, holding that the appellants had not satisfactorily proved the lawful source of the amount.

Ratio Decidendi: In proceedings under the Prevention of Money Laundering Act, 2002, a claimant seeking release of seized cash must establish its lawful source by reliable and corroborative evidence; unaided entries in cash books, balance-sheets or returns are insufficient.

Issues: (i) Whether the attachment of the appellant company's fixed deposits could be sustained as value equivalent property despite the absence of direct evidence of transfer of proceeds of crime to the appellant; (ii) whether the appellant was entitled to release of the attached deposits on the basis that the bank account and fixed deposits belonged to an independent legal entity.

Issue (i): Whether the attachment of the appellant company's fixed deposits could be sustained as value equivalent property despite the absence of direct evidence of transfer of proceeds of crime to the appellant.

Analysis: The appeal arose under Section 26 of the Prevention of Money Laundering Act, 2002 against confirmation of provisional attachment. The attachment was upheld on the basis that the accused company had allegedly committed a large-scale fraud, the appellant company had a common director with the accused company, and the accused company held a substantial shareholding in the appellant company. The Tribunal treated the attached fixed deposits as attachable to the extent of the quantified fraud, even though direct tracing of the proceeds of crime to the appellant company was not established.

Conclusion: The attachment of the fixed deposits as value equivalent property was sustained.

Issue (ii): Whether the appellant was entitled to release of the attached deposits on the basis that the bank account and fixed deposits belonged to an independent legal entity.

Analysis: The appellant relied on the bank's clarification regarding ownership of the account and disputed the assumption that the deposits belonged to the accused company. The Tribunal nevertheless held that the appellant's separate corporate identity did not warrant release of the attachment in the facts of the case, particularly in view of the common management link, shareholding pattern, and the absence of available assets of the accused company and its director.

Conclusion: The appellant was not entitled to release of the attached deposits.

Final Conclusion: The attachment was upheld and the appeal failed.

Ratio Decidendi: Property of a closely linked company may be attached as value equivalent property under the money-laundering framework even without direct tracing, where the tribunal finds a sufficient nexus through common control, shareholding, and the need to secure the quantified proceeds of crime.

Issues: (i) Whether the penalty for delayed or refiled CTRs was sustainable and whether the Bank's plea of technical difficulties and absence of an effective internal mechanism could reduce the penalty; (ii) Whether the penalties for delayed, incomplete, or non-filed STRs were sustainable, including the treatment of incomplete grounds of suspicion and repetitive penalty for lack of internal mechanism; (iii) Whether the penalties for delayed or non-filed NTRs and CBWTRs, and the penalty under section 12A, were justified.

Issue (i): Whether the penalty for delayed or refiled CTRs was sustainable and whether the Bank's plea of technical difficulties and absence of an effective internal mechanism could reduce the penalty?

Analysis: The reporting obligations under section 12 of the Prevention of Money Laundering Act, 2002 and the corresponding rules required timely furnishing of transaction reports and maintenance of an effective internal mechanism for detection and reporting. The refiled CTRs were not to be counted against the Bank where the filing defect was cured, but first-time filing delays remained relevant. The explanation of persistent portal difficulty was rejected, and the finding that the Bank lacked an effective internal mechanism was upheld. The penalty had to be aligned with the delay attributable to non-compliance, and duplication of penalty for the same internal-mechanism lapse was not justified where already accounted for.

Conclusion: The penalty for first-time delayed CTR filings was sustained to the extent of the reduced delay, but the additional penalty for failure to maintain an effective internal mechanism was set aside insofar as it duplicated punishment.

Issue (ii): Whether the penalties for delayed, incomplete, or non-filed STRs were sustainable, including the treatment of incomplete grounds of suspicion and repetitive penalty for lack of internal mechanism?

Analysis: For suspicious transaction reporting, the statutory scheme required prompt reporting and proper particulars. The delay in reporting STRs was found to be established, and the explanation based on shortage of staff or the date of internal approval was rejected. As regards the refiling of STRs, the absence of a time limit supplied by the regulator was considered relevant, but incomplete and inaccurate grounds of suspicion were treated as a substantive defect amounting to non-filing. The separate penalty imposed again for lack of an effective internal mechanism was considered repetitive where the same deficiency had already been addressed elsewhere.

Conclusion: The penalty for delayed STR reporting and for incomplete STRs was sustained, while the penalty attributable to the repeated internal-mechanism lapse was set aside.

Issue (iii): Whether the penalties for delayed or non-filed NTRs and CBWTRs, and the penalty under section 12A, were justified?

Analysis: The findings on delayed filing of NTRs and the non-reporting of a substantial number of reportable NPO transactions were accepted. The delay in CBWTR reporting was also upheld because furnishing of generic or incorrect information did not satisfy the reporting obligation, and the technology-based filing system did not excuse non-compliance. The separate penalty under section 12A for failure to submit correct data relating to FCRA-registered accounts was also supported by the record. However, the additional penalty for an effective internal mechanism was dispensed with where it duplicated earlier sanctions.

Conclusion: The penalties for delayed or non-filed NTRs, delayed CBWTRs, and the section 12A violation were sustained, while the repeated internal-mechanism penalty was set aside.

Final Conclusion: The appeal succeeded only in part, with the total penalty being reduced by deleting the unsustainable and duplicative components while maintaining the penalties for the established substantive reporting defaults.

Ratio Decidendi: In proceedings under the reporting-compliance provisions of the Prevention of Money Laundering Act, 2002, a monetary penalty may be sustained for each established failure to furnish accurate and timely reports, but repetitive punishment for the same internal-mechanism lapse is not justified where it duplicates an already imposed sanction.

Issues: Whether the provisional attachment confirmed under the Prevention of Money Laundering Act, 2002 was liable to be set aside on the ground that the dispute was merely contractual and civil in nature, that no loss was caused to the Railways, and that prior approval was not required before supplying non-Rail Neer packaged drinking water.

Analysis: The Appellate Tribunal relied on the Delhi High Court's earlier findings that the licensee was bound to supply Rail Neer, that supply of other brands was permissible only if Rail Neer was unavailable and with prior written approval, and that the alleged conduct of supplying cheaper brands while claiming reimbursement at the Rail Neer rate disclosed more than a mere contractual breach. The Tribunal also rejected the contention that absence of prosecution sanction for public servants or the asserted absence of loss to the Railways could defeat the allegations against the private appellant at this stage. It held that no material showed shortage of Rail Neer or any prior approval for alternate brands, and that the reimbursement claims supported the finding of wrongful gain and corresponding loss.

Conclusion: The attachment was upheld and the appeal failed.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the Appellate Tribunal vested under the Prevention of Money-Laundering Act (PMLA) has power to allow substitution of immovable property attached/confirmed under section 8 by acceptance of equivalent security in the form of bank guarantee or Fixed Deposit Receipts (FDRs) pending disposal of the appeal.

1.2 Whether substitution is permissible where the impugned attachment is of "amount equivalent to proceeds of crime" rather than attachment of property as direct "proceeds of crime".

1.3 Applicability and effect of Rule 5(5) of the PML (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013 where the immovable property is under joint ownership-i.e., whether an authorised officer/tribunal may accept fixed deposits equivalent only to the share of one joint owner.

1.4 The precedential weight of decisions of constitutional courts (High Courts/Supreme Court) permitting substitution and whether those decisions can be applied by this Tribunal, which is a statutory/quasi-judicial body created under PMLA.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Tribunal's power to permit substitution of attached immovable property by bank guarantee/FDR pending appeal

Legal framework: The PMLA and its Rules define powers of Adjudicating Authority, Special Court and the Appellate Tribunal (section 26 and section 35 of PMLA and Rules of 2013). Section 35 confers procedural powers on the Tribunal (guided by principles of natural justice; civil-court powers for certain matters) but does not expressly confer power to release or substitute attached property, a power specifically provided to the Special Court under section 8(6)-(8) in certain circumstances. Rule 4 and Rule 5 of the 2013 Rules govern manner of taking possession and treatment of attached movable/immovable property; Rule 5(5) deals with joint ownership substitution by FDR to extent of concerned person's share.

Precedent treatment: Several decisions of constitutional courts have allowed substitution in cases where the attachment was of equivalent value rather than direct proceeds; other decisions and previous orders of this Tribunal have denied substitution citing absence of statutory power. The Tribunal noted that orders of High Courts and Supreme Court were rendered in writ jurisdiction and involved equitable reliefs beyond the statutory regime.

Interpretation and reasoning: The Tribunal found no explicit statutory provision empowering it to order substitution of attached immovable property. Section 35 permits procedural regulation but does not enlarge substantive powers to grant release/substitution when statute vests such power with Special Court or Adjudicating Authority. The Tribunal emphasized that writ jurisdiction of High Courts/Supreme Court enables equitable remedies that a statutory tribunal, as a creature of statute, may not exercise absent express grant. Prior orders allowing substitution by this Tribunal were noted but distinguished or restrained by higher courts in some instances.

Ratio vs. Obiter: Ratio - The Tribunal concluded that, in absence of specific statutory power under the PMLA or Rules, the Appellate Tribunal cannot entertain applications for substitution of attached immovable property by bank guarantees/FDRs. Observations summarising and distinguishing constitutional court decisions are explanatory and therefore largely obiter with respect to the Tribunal's statutory-power conclusion.

Conclusion: Applications for substitution were dismissed on the ground that this Tribunal lacks statutory authority to permit substitution of attached immovable property pending disposal of appeals.

Issue 2 - Permissibility of substitution where attachment is by equivalent value (not direct proceeds of crime)

Legal framework: Distinction between property that is "proceeds of crime" and property attached as "amount equivalent to proceeds of crime" is material; constitutional courts have recognised the difference and allowed substitution where the attachment is of equivalent value.

Precedent treatment: High Court decisions have held that substitution may be permitted where attachment is of equivalent value; Supreme Court orders in some matters affirmed such reliefs. This Tribunal has earlier considered similar precedents and in some instances allowed substitution (subject to higher court intervention/stay in particular matters). Conversely, earlier Tribunal orders denied substitution where Rules/Act did not permit same.

Interpretation and reasoning: The Tribunal accepted the legal distinction and acknowledged that constitutional courts may permit substitution when attachment is by equivalent value after thorough review of precedents. However, it held that even if substitution may be appropriate in cases of equivalent attachment, the present Tribunal's lack of statutory power prevents it from granting the remedy. Thus, the substantive correctness of substitution in equivalent-value cases was recognised but not applied by the Tribunal due to institutional/ statutory limits.

Ratio vs. Obiter: Ratio - The Tribunal's operative finding is not that substitution is impermissible as a legal principle for equivalent attachments, but that this Tribunal cannot effectuate such substitution absent statutory authority. The recognition that substitution may be permissible in equivalent-value cases (as per High Court precedents) is obiter in the context of the Tribunal's power analysis.

Conclusion: While substitution is conceptually available in equivalent-value attachments under constitutional court jurisprudence, this Tribunal declined to grant such substitution because it lacks authority under the PMLA and Rules to do so.

Issue 3 - Applicability of Rule 5(5) where property is under joint ownership

Legal framework: Rule 5(5) permits acceptance of equivalent fixed deposit to the extent of the value of the share of the concerned person in jointly owned immovable property estimated by the authorised officer to be involved in money-laundering.

Precedent treatment: The Rule is part of the 2013 Rules and has been relied upon where appropriate for substitution limited to a joint owner's share.

Interpretation and reasoning: The Tribunal applied Rule 5(5) to the facts where the attached property was jointly owned by both applicants who were parties before the Adjudicating Authority. The Tribunal reasoned that pending the outcome of the main appeal, it must be presumed prima facie that the entire property is involved in money-laundering when both joint owners are defendants; consequently, the rule's mechanism to accept fixed deposit to the extent of one owner's share would not arise where the whole property is presumed implicated.

Ratio vs. Obiter: Ratio - Where all joint owners are respondents/accused and the entire property is prima facie involved in money-laundering, Rule 5(5) does not permit acceptance of fixed deposit only for one owner's share; the Tribunal applied the Rule restrictively in that factual matrix.

Conclusion: Rule 5(5) was held inapplicable to permit substitution of only one joint owner's share where both co-owners are implicated and the whole property is prima facie involved; therefore substitution under Rule 5(5) was denied in the instant joint-ownership cases.

Issue 4 - Precedential weight of constitutional court judgments and their applicability to the Tribunal

Legal framework: High Courts and the Supreme Court exercise writ jurisdiction and equitable reliefs not confined to the statutory scheme of PMLA; their decisions are binding but remedies available under writ jurisdiction may not be executable by a statutory tribunal lacking express authority.

Precedent treatment: Multiple High Court and Supreme Court decisions permitting substitution in certain contexts were reviewed. The Tribunal noted that some such decisions were rendered in writ petitions and that some prior Tribunal orders allowing substitution have been stayed or set aside by higher courts.

Interpretation and reasoning: The Tribunal distinguished the remedial reach of constitutional courts from the powers of a statutory tribunal. It accepted the correctness of legal principles laid down by High Courts about equivalent-value attachments but held that those courts' equitable powers cannot be mechanically exercised by the Appellate Tribunal unless the PMLA/Rules expressly confer them. The Tribunal thus limited the practical application of those precedents in its own decision-making.

Ratio vs. Obiter: Ratio - Constitutional court precedents recognising substitution for equivalent attachments are authoritative on law, but their remedial prescriptions are not automatically transferable to this Tribunal where statutory compulsion is absent; this limitation is a binding aspect of the Tribunal's reasoning. Observations on the merits of the constitutional decisions are ancillary.

Conclusion: Decisions of constitutional courts recognising substitution in appropriate cases do not empower this Tribunal to grant substitution in the absence of express statutory authority; such writ-based equitable remedies remain within the domain of High Courts/Supreme Court or the statutory bodies specifically empowered by the Act/Rules.

Overall Disposition

The Tribunal dismissed the applications for substitution of attached immovable properties with bank guarantees/FDRs on the grounds that (a) the Tribunal lacks express statutory power under the PMLA and the 2013 Rules to permit such substitution, (b) Rule 5(5) is inapplicable where the entire joint property is prima facie involved in money-laundering because all joint owners are respondents, and (c) constitutional court precedents permitting substitution do not confer on the Tribunal the remedial authority to order substitution in absence of statutory mandate.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the order confirming provisional attachment of the appellant's bank account was vitiated for not being passed within 180 days as required under Section 5(3) of the Prevention of Money Laundering Act, 2002, in the backdrop of the COVID-19 limitation orders passed by the Supreme Court.

1.2 Whether the attached amount in the appellant's bank account was shown to be from legitimate sources so as to warrant release from attachment, and whether the Adjudicating Authority erred in relying upon the appellant's statement recorded under Section 50(2) of the Act.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of confirmation order vis-à-vis 180 days under Section 5(3) PMLA and exclusion of COVID-19 period

Legal framework (as discussed)

2.1 Section 5(1) of the Act permits provisional attachment of property for a period not exceeding 180 days. Section 5(3) stipulates that every order of attachment shall cease to have effect after expiry of that period or on the date of an order under Section 8(3), whichever is earlier.

2.2 The Tribunal referred to the Supreme Court's suo motu orders extending and excluding limitation for the period from 15.03.2020 to 28.02.2022 for all judicial and quasi-judicial proceedings, including where statutes prescribe outer limits for completion/termination of proceedings, and to its own prior decision applying those orders to proceedings under the Act.

2.3 The Tribunal also relied extensively on a High Court decision which held that the period from 15.03.2020 to 28.02.2022 is to be excluded while computing the statutory 180 days under Section 5(3), treating it as a period for "termination of proceedings" within the meaning of the Supreme Court's limitation orders, and expressly disagreed with contrary High Court views.

Interpretation and reasoning

2.4 The Tribunal treated the 180-day ceiling in Section 5(1) read with Section 5(3) as a "maximum period" for continuation of provisional attachment and, following the Supreme Court's directions and the relied-upon High Court judgment, held that such maximum or outer-limit periods also attract exclusion of the COVID-19 duration.

2.5 The Tribunal accepted that the Supreme Court's limitation orders are binding upon all courts and tribunals and should not be narrowly construed. It endorsed the reasoning that those orders extend not only to initiation of proceedings but also to time limits prescribed for termination of proceedings, including the 180-day life of provisional attachment.

2.6 The Tribunal adopted the view that decisions relying on S. Kasi to deny applicability of the limitation orders to Section 5(3) proceedings are not to be followed, as that line of reasoning is confined to matters of personal liberty and criminal investigation timelines, not to property attachment under the Act.

Conclusions

2.7 Excluding the COVID-19 period (15.03.2020 to 28.02.2022) from computation, the Tribunal held that the confirmation order was passed within the permissible period and did not lapse under Section 5(3). The challenge to the confirmation on the ground of expiry of 180 days was rejected.

Issue 2: Justification of attachment and reliance on statement under Section 50(2) PMLA

Legal framework (as discussed)

2.8 The Tribunal considered Section 50(2) of the Act, which empowers authorities to record statements, and held that statements so recorded are admissible in evidence and can be read against the person making them.

Interpretation and reasoning

2.9 The appellant relied on income tax returns (ITRs) to show that the credit balance of Rs. 12,44,159/- in the attached bank account was derived from independent income (salary and investments). The Tribunal noted that the ITRs produced were only for Assessment Year 2012-13 and prior years, i.e., prior to the period of commission of the predicate offence, and that no ITRs for the subsequent relevant period were placed on record.

2.10 The Tribunal observed that the appellant did not produce her bank statements, despite the attachment being of the bank account itself, and proceeded on the admitted position that the ITRs alone were relied upon to justify the source of the funds.

2.11 On examining the appellant's statement under Section 50(2), the Tribunal found that she had described herself as a housewife and stated that purchase of immovable property and her investments were financed by her husband, who looked after all her investments. The statement did not disclose any contemporaneous engagement in salaried employment corresponding to the period in issue.

2.12 The Tribunal held that, given (a) the absence of bank statements, (b) the temporal mismatch and insufficiency of the ITRs, and (c) the appellant's own admission that the funds for property and investments came from her husband, the statement under Section 50(2) became a relevant and reliable basis to treat the attached amount as "proceeds" in her hands linked to the accused husband.

2.13 The Tribunal rejected the contention that the Adjudicating Authority could not have relied upon the Section 50(2) statement or that such reliance was "merely" on that statement, noting that the statement is admissible evidence and, in the factual context of non-production of primary financial records, carried significant weight.

Conclusions

2.14 The Tribunal upheld the finding that the attached amount of Rs. 12,44,159/- represented proceeds of crime in the appellant's hands and that the appellant failed to satisfactorily establish legitimate, independent sources for the said amount.

2.15 No infirmity was found in the Adjudicating Authority's order confirming the provisional attachment. The appeal was dismissed, with a direction that the attached amount be kept in a fixed deposit, subject to the final outcome of the trial, while permitting the appellant to operate the bank account otherwise.

ISSUES PRESENTED AND CONSIDERED

1. Whether confirmation of a Provisional Attachment Order under the Prevention of Money Laundering Act, 2002 (PMLA) was justified where the Enforcement Directorate alleged proceeds of crime arising from sanction and disbursal of overvalued loans.

2. Whether properties held by relatives or third parties can be provisionally attached as "proceeds of crime" or as property of equivalent value under Section 2(1)(u) of the PMLA, including where such properties were acquired prior to the commission of the scheduled offence.

3. What is the correct statutory interpretation of "proceeds of crime" under Section 2(1)(u) of the PMLA - specifically the scope and interplay of its three limbs (property derived/obtained directly or indirectly; the value of any such property; and property equivalent in value held within the country or abroad) - and what safeguards apply to third-party interests.

4. Whether a provisional attachment may be confirmed where the investigating agency contends that tainted assets are not traceable or have been siphoned off, and what evidentiary showing is required at the provisional stage (including assessment of equivalence in value and disclosure of source by alleged third-party owners).

5. The legal effect of pending criminal trial on confirmation of provisional attachment orders under the PMLA.

ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Validity of confirmation of Provisional Attachment Order under PMLA

Legal framework: Confirmation of provisional attachment under Section 26 of the PMLA follows recording of ECIR and preliminary investigation; the concept of "proceeds of crime" in Section 2(1)(u) governs what may be attached.

Precedent treatment: The Tribunal applied binding guidance from a three-Judge bench on the definition of "proceeds of crime" and followed the analytical framework set out by the Delhi High Court (Axis Bank) and subsequent High Court decisions that interpret the three limbs; conflicting views from other High Courts were considered and distinguished where inconsistent with the Apex Court authority.

Interpretation and reasoning: The Tribunal evaluated the ECIR, the investigations, and the particulars of 33 loan transactions to conclude that certain identified properties were directly traceable as proceeds of crime while others were attached as equivalent value where tainted assets were alleged to be unavailable. The Tribunal required, and found lacking, satisfactory disclosure of source of funds from persons in whose names properties were registered post-offence.

Ratio vs. Obiter: The holding that confirmation was permissible on the record before the Tribunal is ratio; ancillary observations about application of statutory limbs and evidentiary requirements are treated as explanatory ratio applicable to similar cases.

Conclusion: On the facts and evidence presented, confirmation of the provisional attachment was upheld in respect of properties found to be direct proceeds and those attached as equivalent value where proceeds were not traceable.

Issue 2 - Attachment of properties held by relatives/third parties and properties acquired prior to the offence

Legal framework: Section 2(1)(u) contemplates three categories: (i) property derived/obtained (directly or indirectly) by criminal activity, (ii) the value of any such property, and (iii) property equivalent in value held within the country or abroad; procedural safeguards for third parties are recognised in case law.

Precedent treatment: The Tribunal followed the Axis Bank interpretation and the three-Judge apex dictum emphasising para 68 (on the breadth of the second limb), and relied on subsequent High Court authority (Prakash Industries) that declined to follow Seema Garg where it conflicted with the Apex Court's approach. Decisions treating the second limb narrowly (to limit it to property outside India or only post-offence acquisitions) were distinguished.

Interpretation and reasoning: The Tribunal held that the second limb (value of any such property) cannot be rendered redundant; it permits attachment of untainted property (including that in third-party names or acquired prior to the offence) as property equivalent in value when the tainted property cannot be traced or has been siphoned off. However, such attachment requires a tentative assessment of wrongful gain and scrutiny of the claimed bona fide source - the absence of credible bank statements, tax returns or other proof of lawful source by relatives/third parties supported attachment.

Ratio vs. Obiter: The proposition that properties owned by relatives or acquired prior to the offence may be attached as equivalent value where tainted property is untraceable, subject to safeguards and evidentiary requirement, is ratio and central to the decision. Observations distinguishing contrary High Court views are ratio insofar as they enforce the Apex Court interpretation.

Conclusion: Attachment of properties in the names of relatives/third parties and of pre-offence acquisitions was sustained as lawful where (a) the agency showed tainted assets were not available/vanished, (b) a tentative equivalence in value to illicit gains was assessed, and (c) third parties failed to satisfactorily disclose lawful source; bona fide third-party rights remain protected where adequately demonstrated.

Issue 3 - Proper construction of "proceeds of crime" and applicability of limbs

Legal framework: Section 2(1)(u) must be read as comprising three distinct but complementary limbs separated by "or", each operative in different factual contingencies; interpretive canons and legislative purpose (prevention and recovery of laundered proceeds) inform construction.

Precedent treatment: The Tribunal adhered to the three-bench apex ruling clarifying the three limbs and to Delhi High Court exegesis (Axis Bank) that elaborated safeguards and concept of "deemed tainted property". Conflicting High Court lines (that would restrict the second limb severely) were considered inconsistent with apex guidance and therefore not followed.

Interpretation and reasoning: The Tribunal reasoned that (i) the first limb covers property obtained directly/indirectly from the scheduled offence (tainted property); (ii) the second limb allows for attachment of the value of such property when the tainted property is not available (enabling attachment of untainted property as equivalent value); and (iii) the third limb addresses cross-border scenarios. Treating the second limb as dependent on the first would nullify legislative intent and render the provision ineffectual in cases of layering, siphoning and dissipation of tainted assets.

Ratio vs. Obiter: The interpretive holding that the definition contains three operative limbs and that the second limb authorises attachment of property equivalent in value (subject to safeguards) is ratio.

Conclusion: The three-limb interpretation of "proceeds of crime" is affirmed; the second limb is a necessary legislative tool to secure equivalent value where tainted assets cannot be located, and its application must be accompanied by assessment of illicit gain and protection of bona fide third-party rights.

Issue 4 - Evidentiary standard, assessment of equivalence and protection of third-party interests

Legal framework: While provisional attachment operates at an interlocutory stage, confirmation requires prima facie satisfaction: (a) some assessment (even tentative) of wrongful gain/value of proceeds, (b) nexus or circumstantial indicia linking property to proceeds or justification for equivalence, and (c) consideration of any third-party claims and supporting disclosures.

Precedent treatment: Reliance on Axis Bank and subsequent High Court pronouncements that mandate tentative valuation of illicit gains and prescribe safeguards for bona fide third parties (e.g., proof of consideration, bank statements, tax returns) before attachment of deemed-tainted properties.

Interpretation and reasoning: The Tribunal applied these standards to the record: where properties were shown to be acquired after the offence or registered in relatives' names post-offence with inadequate source disclosure, attachment for equivalent value was justified; where properties were directly traceable to proceeds, they were treated as direct proceeds. The Tribunal rejected contentions that pre-offence acquisitions are categorically immune, reiterating that third-party bona fide rights remain protected if satisfactorily established.

Ratio vs. Obiter: The prescription of evidentiary expectations at the confirmation stage (tentative valuation of illicit gain; requirement for third parties to substantiate lawful source) constitutes ratio guidance for future cases.

Conclusion: Confirmation is permissible on a prima facie record that shows non-availability of tainted assets, a reasoned equivalence assessment, and failure by third parties to prove lawful source; bona fide third-party rights acquired for valid consideration remain a recognized defence to be examined on the full evidence.

Issue 5 - Effect of pending trial on provisional attachment

Legal framework and reasoning: Confirmation of provisional attachment is interlocutory and remains subject to the final outcome of the criminal trial where allegations of scheduled offences will be adjudicated; the attachment secures assets during prosecution and does not determine guilt.

Conclusion: The provisional attachment as confirmed will subsist subject to eventual trial outcome; confirmation at the interlocutory stage does not preclude later relief if the trial establishes lawful acquisition or otherwise does not sustain the claims of proceeds of crime.

FINAL CONCLUSION

On the material before it the Tribunal upheld confirmation of the provisional attachment in respect of (a) properties found to be direct proceeds of crime and (b) certain properties in the hands of relatives/third parties or acquired prior to the offence that were attached as equivalent value where tainted assets were alleged to be unavailable and where third parties failed to satisfactorily disclose lawful source. The Tribunal applied and followed the three-limb construction of "proceeds of crime", endorsed the Axis Bank/Delhi High Court approach and the apex bench exposition, and declined to follow inconsistent High Court precedents to the extent they conflict with apex authority. The provisional attachments were confirmed but remain subject to the ultimate result of the pending criminal trial.

Issues: Whether the provisional attachment of property of equivalent value under the Prevention of Money Laundering Act, 2002 was sustainable where the tainted amount was alleged to have been routed through business activities and the appellants claimed that execution responsibility lay with the subcontractor.

Analysis: The appeals arose from confirmation of provisional attachment based on allegations of submission of fake bitumen invoices and generation of proceeds of crime quantified at Rs. 1,08,95,583/-. The Tribunal held that the contractual responsibility for execution of the road work remained with the appellant company, and the plea that the subcontractor alone was responsible was not supported by reliable documentary proof. The Tribunal further held that the definition of proceeds of crime is not confined to property directly derived from the scheduled offence, but extends to the value of such property where the tainted property is unavailable, thereby permitting attachment of property of equivalent value. It also found no merit in the challenge based on the earlier High Court order or on the allegation that the adjudicating order was mechanical.

Conclusion: The challenge to the provisional attachment failed, and the attachment of equivalent value was upheld.

Final Conclusion: The appellants remained liable for the alleged laundering-linked loss, and the impugned attachment order stood sustained.

Ratio Decidendi: Where proceeds of crime are not traceable, the authority may attach property of equivalent value, and a subcontracting arrangement does not by itself displace the principal contractor's responsibility absent cogent proof.

Issues: (i) Whether the matter required remand to the Adjudicating Authority for a fresh order; (ii) whether the attachment and confirmation orders were unsustainable for want of reasons and because the properties were claimed to have been purchased from income disclosed in returns; (iii) whether properties purchased before the commencement of the Act were outside its scope; (iv) whether properties purchased before the quarrying permit were outside the scope of money-laundering proceedings; (v) whether the order had to be set aside in relation to properties attached on the basis that some predicate offences were later included in the schedule; (vi) whether illegal mining was not a scheduled offence; (vii) whether the appellants had not indulged in or projected proceeds of crime as untainted property; (viii) whether the order was liable to be set aside for laches; (ix) whether the jointly owned property of one appellant was liable to be released to the extent of his share; (x) whether the appeal by one appellant claiming to be a dormant partner was maintainable.

Issue (i): Whether the matter required remand to the Adjudicating Authority for a fresh order.

Analysis: The order recorded the basis for attachment, reproduced the material relied upon, and discussed the replies and rejoinders before confirmation. The extent of the order did not by itself show non-application of mind. The Tribunal also held that the material disclosed a sufficient basis for confirmation and that remand was not warranted.

Conclusion: Remand was declined and the issue was decided against the appellants.

Issue (ii): Whether the attachment and confirmation orders were unsustainable for want of reasons and because the properties were claimed to have been purchased from income disclosed in returns.

Analysis: The Tribunal held that the investigation materials, valuation reports, statements, and the pattern of acquisitions showed laundering of proceeds of crime. The explanation based on income tax returns and declared receipts was found insufficient to displace the statutory material supporting attachment.

Conclusion: The challenge failed and the issue was decided against the appellants.

Issue (iii): Whether properties purchased before the commencement of the Act were outside its scope.

Analysis: The Tribunal relied on the wide definition of proceeds of crime and the principle that properties acquired earlier may still be proceeded against as equivalent value where the tainted property is unavailable. It treated the relevant enforcement action as directed to value and not merely to the date of purchase.

Conclusion: The issue was decided against the appellants.

Issue (iv): Whether properties purchased before the quarrying permit were outside the scope of money-laundering proceedings.

Analysis: The Tribunal held that the material date is the date of the laundering activity and projection of tainted property as untainted, not merely the date of the underlying criminal conduct or permit. It treated money laundering as a continuing offence.

Conclusion: The issue was decided against the appellants.

Issue (v): Whether the order had to be set aside in relation to properties attached on the basis that some predicate offences were later included in the schedule.

Analysis: The Tribunal held that the case was supported by multiple scheduled offences and that the PMLA proceedings were not defeated merely because one offence was said to have been added later. The relevant enforcement action was upheld on the larger set of scheduled offences.

Conclusion: The issue was decided against the appellants.

Issue (vi): Whether illegal mining was not a scheduled offence.

Analysis: The Tribunal held that the proceedings were not dependent on illegal mining alone, since the record disclosed several predicate offences falling within the schedule. The absence of one offence from the schedule did not invalidate the entire action.

Conclusion: The issue was decided against the appellants.

Issue (vii): Whether the appellants had not indulged in or projected proceeds of crime as untainted property.

Analysis: The Tribunal found that the properties were acquired out of the illegal gains generated from the mining operations and that, in any event, properties of equivalent value could be attached where the proceeds of crime were not directly traceable. The appellants did not rebut the material showing use and layering of illicit funds.

Conclusion: The issue was decided against the appellants.

Issue (viii): Whether the order was liable to be set aside for laches.

Analysis: The Tribunal held that Section 5 does not prescribe a limitation period for passing a provisional attachment order and that delay by itself was not a ground to invalidate the attachment.

Conclusion: The issue was decided against the appellants.

Issue (ix): Whether the jointly owned property of one appellant was liable to be released to the extent of his share.

Analysis: The Tribunal held that it could not conclusively determine, on the record before it, whether the appellant had purchased the property from his own funds. It found that this question required trial-level examination and cross-examination of witnesses.

Conclusion: The issue was decided against the appellant and no release was ordered in the appeal.

Issue (x): Whether the appeal by one appellant claiming to be a dormant partner was maintainable.

Analysis: The Tribunal held that no property attached in the present complaint was traced to that appellant and that the property linked to him was the subject of a different proceeding. On that footing, it found that he had no locus in the present appeal.

Conclusion: The appeal was disposed of with liberty to defend the criminal case in accordance with law.

Final Conclusion: The attachment and confirmation were upheld for the appeals under challenge, and the connected challenge by the remaining appellant was not entertained in this proceeding.

Ratio Decidendi: Money-laundering proceedings may proceed on the basis of the value of proceeds of crime where the tainted property is unavailable, and the offence is a continuing one governed by the date of laundering activity rather than the date of the underlying predicate offence.

ISSUES PRESENTED AND CONSIDERED

1. Whether an order confirming provisional attachment under Section 5(1) of the Prevention of Money Laundering Act, 2002 that is passed after the expiry of 180 days from the date of provisional attachment remains effective where the period of 15.03.2020 to 28.02.2022 is excluded pursuant to the Supreme Court's orders on exclusion of limitation due to the COVID-19 pandemic.

2. Whether the provisional attachment of movable properties under Section 5(1) can be invalidly characterized as illegal seizure that ought to have proceeded under Sections 17(1) and 17(4) instead of attachment.

3. Whether the appellants successfully disclosed bona fide sources of the impugned funds and movable properties sufficient to defeat confirmation of provisional attachment (i.e., adequacy, authenticity and probative value of sale deeds, bank statements, contracts and other documents relied upon).

4. Whether allegations concerning association with a proscribed/terrorist organization and related criminal allegations are determinative at the adjudication stage for confirmation of provisional attachment under PMLA (i.e., sufficiency of prima facie material to sustain attachment).

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Applicability of COVID-era exclusion (15.03.2020-28.02.2022) to the 180-day period under Section 5(3) PMLA

Legal framework: Section 5(1) permits provisional attachment for a period not exceeding 180 days; Section 5(3) provides that such attachment ceases after expiry of that period. The Supreme Court's orders in the suo motu limitation proceedings excluded the period 15.03.2020-28.02.2022 for purposes of limitation and, in clarified orders, for computation of statutory time-limits/outer limits for termination of proceedings under various statutes.

Precedent treatment: The Tribunal considered and followed the Supreme Court orders restoring and extending exclusion and subsequent High Court decisions (including the detailed reasoning in Prakash Corporates and various High Court decisions) holding that exclusion applies where a statute prescribes an outer time-limit for termination of proceedings. The Tribunal distinguished and considered contrary authorities that limited the scope of the exclusion (notably decisions treating personal liberty exemptions in S. Kasi), and explained why those authorities are factually and legally distinguishable.

Interpretation and reasoning: The Tribunal held that the 180-day period under Section 5(3) is an outer time-limit for termination of attachment proceedings and thus falls within the class of statutory timelines whose computation is to exclude the COVID period. The Tribunal reasoned that the Supreme Court's orders were aimed at preventing loss of remedial rights during the pandemic and, as later clarified, extended to timelines that terminate proceedings. The distinction between rights of personal liberty (requiring stricter treatment) and property-related timelines was emphasized: S. Kasi (personal liberty context) cannot be extended to defeat the application of In re: Limitation to PMLA termination time, and Prakash Corporates supports a broad application of the exclusion where statutes prescribe outer limits.

Ratio vs. Obiter: Ratio - the Tribunal's holding that the period 15.03.2020-28.02.2022 is to be excluded in computing the 180 days under Section 5(3) PMLA is a binding proposition for the case. Obiter - discussion of other High Court decisions and nuanced comparisons with S. Kasi are explanatory but form part of the reasoning supporting the ratio.

Conclusion: With the COVID exclusion applied, the Adjudicating Authority's confirmation dated within the recalculated 180-day window was valid; the challenge based solely on expiration of 180 days fails.

Issue 2: Legality of provisional attachment versus seizure under Sections 17(1) and 17(4)

Legal framework: Section 5 provides for provisional attachment where there is reason to believe property is proceeds of crime; Sections 17(1) and 17(4) deal with power to seize movable property during investigation and subsequent retention.

Precedent treatment: The Tribunal surveyed the statutory scheme and prior authorities discussing the distinct purposes and procedures for attachment and seizure, recognizing that provisional attachment under Section 5 is an independent statutory mechanism and not conditional on first seizing under Section 17.

Interpretation and reasoning: The Tribunal rejected the contention that attachment was an improper attempt to circumvent seizure provisions. It held there is no statutory requirement to first seize movable property before provisional attachment; if the authorized officer has reason to believe property is proceeds of crime or likely to be dealt with so as to frustrate confiscation proceedings, provisional attachment is permissible. The Tribunal observed the respondents had reason to believe proceeds of crime were in appellants' possession and that attachment was therefore appropriate.

Ratio vs. Obiter: Ratio - provisional attachment under Section 5 is permissible without prior seizure under Section 17 where statutory conditions for attachment are met. Obiter - comments on harassment allegations and comparative procedure are explanatory.

Conclusion: The challenge that provisional attachment was improper for not invoking seizure provisions is unsustainable.

Issue 3: Adequacy of disclosed source documents (sale deeds, bank statements, contracts) to rebut reason to believe/probable cause for attachment

Legal framework: For confirmation under Section 8 procedures and for resisting attachment the person must plausibly demonstrate legitimate source of the impounded funds or property by production of credible, corroborative documentary evidence (registered instruments, bank credits, invoices, corroborative bank statements consistent with claimed transactions).

Precedent treatment: The Tribunal applied conventional evidentiary standards at the adjudicatory stage: admissible, authenticated and probative documentary proof is required to rebut the material relied upon by the attaching authority. The Tribunal treated unregistered sale deeds, unsupported handwritten documents and unsupported assertions as inadequate.

Interpretation and reasoning: The Tribunal examined the appellants' documents: unregistered sale deeds, sale agreements, some bank entries that did not corroborate sustained receipt or lawful retention, transaction entries that were immediately debited, and lack of invoices/registered documentation for claimed businesses (timber, sand supply). It found that several sale deeds were unregistered and that bank statements, where amounts appeared, showed immediate debits/transfers inconsistent with the claim that funds were lawfully retained as proceeds of sale. The Tribunal also noted absence of corroborating business records/invoices and mismatch between claimed contract amounts and actual bank credits. Loose, handwritten or potentially fabricated documents were held untrustworthy; statements under Section 50(2)/(3) were not matched by documentary proof. The Tribunal therefore found the appellants did not discharge the evidentiary burden to negate the statutory reason to believe.

Ratio vs. Obiter: Ratio - unregistered sale deeds and unsupported/uncorroborated documentary material do not suffice to establish lawful source so as to defeat confirmation of provisional attachment; probative bank records and registered instruments are necessary. Obiter - comments on tribal land registration principles were noted but not accepted in absence of statutory authorization or proof.

Conclusion: The appellants failed to prove lawful source; the Tribunal found a prima facie case to sustain confirmation of provisional attachment and refused to interfere.

Issue 4: Role of criminal allegations (terrorist/extortion racket) and prima facie satisfaction for attachment

Legal framework: Section 3 PMLA defines money-laundering; attachment under Section 5 may be based on material indicating proceeds of scheduled offences. Adjudicating Authority acts on material forwarded by the authorized officer.

Precedent treatment: The Tribunal treated charge-sheeted allegations and seized materials (cash, arms, explosives, incriminating documents) and NIA findings as relevant material to constitute reason to believe for attachment at adjudicatory stage, without finally adjudicating guilt (which is a trial issue).

Interpretation and reasoning: The Tribunal observed that extensive investigative material, including large cash seizures at premises, arms and incriminating documents and a charge-sheet by the NIA, supported a prima facie inference of involvement in scheduled offences and diversion of funds. While the Tribunal recognized the criminal proceedings were pending and did not record definitive guilt, it held that the threshold for provisional attachment/confirmation is prima facie material supporting reason to believe, which was met here.

Ratio vs. Obiter: Ratio - where investigating agency produces material establishing reasonable belief of proceeds of crime linked to scheduled offences (even if trial is pending), provisional attachment can be confirmed; ultimate guilt is for trial. Obiter - cautionary note that absence of convincing exculpatory material at adjudicatory stage is not a final finding on culpability.

Conclusion: The material on record furnished a prima facie basis for attachment; allegations of innocence unsubstantiated by reliable documentary proof were insufficient to defeat confirmation.

Overall Disposition and Cross-references

The Tribunal upheld the Adjudicating Authority's confirmation of provisional attachment: (a) the COVID-era exclusion (15.03.2020-28.02.2022) applies to computation of the 180-day termination period under Section 5(3) PMLA (see Issue 1); (b) provisional attachment under Section 5 can validly be exercised without prior seizure under Section 17 where statutory conditions exist (see Issue 2); (c) appellants failed to produce authentic, corroborative documentary evidence to rebut the authorized officer's reason to believe or to establish lawful source of funds (see Issue 3); and (d) the investigative material including cash seizures and incriminating items constituted sufficient prima facie material to sustain the attachment pending trial (see Issue 4).

Issues: Whether the confirmation of provisional attachment under the Prevention of Money Laundering Act, 2002 could be interfered with on the grounds that the appellants were not accused in the scheduled offence, that proceedings relating to disproportionate assets had been closed, and that the material regarding proceeds of crime and nexus with the appellants required rejection of the attachment.

Analysis: The attachment was challenged on the basis that the appellants were not arraigned as accused in the predicate offence and that the alleged proceeds of crime were not traceable to any subsisting scheduled offence against them. The Tribunal noted the governing principle that a person need not necessarily be an accused in the predicate offence to face action under the Prevention of Money Laundering Act, 2002, and that benefit of quashing, discharge or closure in the predicate case is relevant only where the underlying scheduled offence itself has been extinguished in a manner affecting the money-laundering proceedings. The Tribunal found that the present proceeding related to a predicate offence which was still pending, while the separate proceeding concerning disproportionate assets had been dropped and did not control the present case. It further held that the factual disputes regarding the appellants' income sources, account details and alleged manipulation of financial records involved matters requiring evidence and trial, and were not fit for interference at the appellate stage.

Conclusion: The challenge to the confirmation of attachment was rejected and the Tribunal declined to interfere with the impugned order.

Final Conclusion: The appellate challenge failed, and the attachment order remained undisturbed, leaving the appellants to seek appropriate relief if the pending Supreme Court proceedings result in a favourable outcome.

Ratio Decidendi: For action under the Prevention of Money Laundering Act, 2002, a person need not be an accused in the predicate offence, and where the scheduled offence remains pending, factual disputes and alleged lack of direct involvement do not by themselves warrant interference with a confirmed attachment.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether a prosecution complaint under the Prevention of Money Laundering Act (PMLA) filed after 365 days from confirmation of provisional attachment can be valid where the delay falls within the period excluded by the Supreme Court's suo motu order relating to limitation during the Covid-19 pandemic.

1.2 Whether the Supreme Court's order excluding the period 15.03.2020 to 28.02.2022 for purposes of limitation (SMWP No. 3 of 2020 and subsequent directions) applies to executive action by investigating agencies (filing of prosecution complaints) and not only to litigants/lawyers seeking to file judicial or quasi-judicial remedies.

1.3 The legal consequence under Section 8(3)(a) PMLA of failure to file a prosecution complaint within the prescribed period (i.e., lapse/release of attached property) and whether pandemic-related exclusion prevents lapse where filing occurred after the prescribed statutory period but within the excluded period.

1.4 Whether interim protection restraining eviction/possession under earlier interim orders should continue post-disposal and the applicable test for taking possession after dismissal of appeal.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Applicability of pandemic period exclusion to PMLA time-limit for filing prosecution complaint

Legal framework: Section 8(3)(a) PMLA provides that upon confirmation of attachment by the Adjudicating Authority the attachment "shall continue during investigation for a period not exceeding three hundred and sixty-five days or the pendency of the proceedings relating to any offence under this Act before a court...". The Supreme Court's suo motu order directed that the period 15.03.2020 to 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, with consequential directions about residual periods.

Precedent treatment: Tribunal decisions cited hold that failure to file prosecution complaint within the statutory period under Section 8(3)(a) results in lapsing of attachment (release of properties) where no proceedings are pending. Other Tribunal orders have applied the Supreme Court pandemic exclusion to extend time in various contexts. The Supreme Court's decision on default bail (S. Kasi) clarified that the extension order was not intended to eclipse time limits of executive action like filing charge-sheets under Section 167(2) CrPC which directly engage personal liberty, but emphasized that the extension order's object was to assist litigants unable to file remedies.

Interpretation and reasoning: The Court recognized that Section 8(3)(a) prescribes a substantive outer limit (365 days) for continuation of attachment unless proceedings are pending. The central question is whether the pandemic exclusion extends that statutory outer limit by suspending computation of limitation so that filing made after 365 days but within the excluded pandemic period is valid. The Tribunal found the pandemic circumstances extraordinary, acknowledging operational impediments to investigation (lockdowns, court suspensions, difficulty in obtaining witness statements). The Tribunal accepted the view in other orders that the Supreme Court's exclusion should not be narrowly confined and that, given its object to obviate hardship, full effect must be given to its orders. The Tribunal also distinguished S. Kasi on its facts: S. Kasi dealt with personal liberty/default bail under CrPC and held that the extension order could not be read to enlarge the statutory right to default bail because the investigating officer could have filed a charge-sheet before the magistrate even during lockdown; whereas the present issue concerns property rights under Section 8(3)(a) PMLA and the practical impossibility of completing investigation in lockdown was held to be relevant.

Ratio vs. Obiter: Ratio - The Tribunal held that the Supreme Court's exclusionary order is wide enough in purpose and effect to be applied for computing the 365-day period under Section 8(3)(a) PMLA where the period of delay falls within the excluded pandemic period and where extraordinary Covid-19 constraints impeded investigation. Obiter - Observations about the comparative ability to file charge-sheets during lockdown and theoretical possibilities for investigators to file despite restrictions (drawn from S. Kasi) were noted but not treated as decisive.

Conclusion: Filing of the prosecution complaint on 01.06.2020 (after 365 days from confirmation) was held to be maintainable because the delay fell within the period excluded by the Supreme Court's suo motu order; therefore the statutory 365-day limit is to be read in light of that exclusion for the purposes of computing limitation under Section 8(3)(a) PMLA in the exceptional pandemic circumstances.

Issue 2 - Whether the Supreme Court exclusion applies to executive/investigating agency action

Legal framework: The Supreme Court order speaks in terms of exclusion for limitation "in respect of all judicial or quasi-judicial proceedings" and was framed to obviate hardships faced by litigants and lawyers in filing proceedings during the pandemic; it was passed under Article 142 and declared binding.

Precedent treatment: S. Kasi held the extension order was not intended to extend the period for police filing of charge-sheets under Section 167(2) CrPC insofar as it sovereignly limited personal liberty rights, because the charge-sheet could be filed even during lockdown before the magistrate in charge. Other authorities and Tribunal decisions, however, have applied the exclusion in contexts beyond purely litigant filings, particularly where investigation and court functioning were hampered by lockdown, and where the object of the exclusion (avoiding termination of proceedings) warrants broader application.

Interpretation and reasoning: The Tribunal accepted that the Supreme Court order's primary object was to assist litigants and preserve remedies, but rejected a rigid restriction that would exclude all executive actions from its scope. The Tribunal emphasized the extraordinary operational constraints on investigators (court suspensions, restrictions on witness contact) that made timely completion of investigatory tasks practically impossible. The Tribunal reasoned that the exclusionary order must be given full effect and not narrowed artificially where its purpose (preventing unfair forfeiture of rights during the pandemic) supports extending its operation to the computation of the PMLA time limit for continuation of attachment.

Ratio vs. Obiter: Ratio - The Tribunal held that the Supreme Court's exclusion may be applied to the computation of statutory periods under Section 8(3)(a) PMLA for filing prosecution complaints by investigative agencies where the delay is attributable to pandemic restrictions and falls within the excluded period. Obiter - Broad commentary on the distinction between personal liberty contexts and property contexts (Article 21 vs Article 300A) and the differing weight to be accorded to S. Kasi.

Conclusion: The exclusion order is applicable to computing the 365-day limitation under Section 8(3)(a) PMLA in the present facts; therefore the delayed filing by the investigating agency is not fatal where the period of delay lies within the excluded pandemic window and investigation was impeded by Covid-19 constraints.

Issue 3 - Consequence of non-filing within statutory period and effect of precedents requiring release

Legal framework: Section 8(3)(a) contemplates lapse of the attachment if the statutory period elapses without initiation/pendency of prosecution; Tribunal jurisprudence has held attachments lapse if no prosecution complaint is filed within the statutory period.

Precedent treatment: Prior Tribunal decisions have ordered release of properties where no prosecution complaint was filed within the prescribed period (pre- and post-amendment jurisprudence), emphasizing the mandatory nature of the time limit.

Interpretation and reasoning: The Tribunal reconciled those precedents with the pandemic exclusion: although the statutory period is mandatory, computation of that period must take into account the Supreme Court's exclusionary directions. Where the statutory period would have expired during the excluded period, the effective computation must exclude that window; hence attachments do not lapse automatically if the prosecuting agency files within the extended computation made possible by the exclusion. The Tribunal found that earlier decisions ordering release where no account was taken of pandemic exclusion are distinguishable where the facts fall within the excluded window.

Ratio vs. Obiter: Ratio - Attachments under Section 8(3)(a) do not ipso facto lapse where failure to file within 365 days is attributable to the pandemic period excluded by the Supreme Court and the prosecution complaint is filed within the recalculated limitation. Obiter - General statements in earlier orders that attachments lapse upon non-filing remain good law in non-pandemic or non-excluded circumstances.

Conclusion: The mandatory nature of Section 8(3)(a) persists, but in the present case the filing after 365 days was validated by applying the pandemic exclusion; therefore lapse/release was not warranted.

Issue 4 - Interim protection and possession after dismissal

Legal framework: Interim orders maintaining status quo (restraining eviction and steps under Section 8(4) PMLA) are discretionary and normally cease on final disposal; however, possession under attachment may be taken only where exceptional reasons exist, following higher-court guidance on properties and possession.

Precedent treatment: The Tribunal had earlier granted interim status-quo orders; higher authority guidance indicates that taking possession post-adjudication requires exceptional reasons.

Interpretation and reasoning: The Tribunal held that the interim protection granted earlier cannot continue after disposal of the appeal. Nonetheless, in view of higher-court directions (cited) the respondent may take possession only if exceptional reasons exist, signalling a cautious approach to eviction/possession even after dismissal.

Ratio vs. Obiter: Ratio - Earlier interim orders are not perpetually binding after final disposal; post-disposal possession may be taken only upon exceptional justification. Obiter - Practical directions about protection of residential property pending further proceedings.

Conclusion: The interim status-quo will not continue by default after dismissal of the appeal; however, possession by the investigative agency should be taken only upon demonstration of exceptional reasons.

Issues: (i) whether the provisional attachment under Section 5 of the Prevention of Money Laundering Act, 2002 was invalid for want of communication of reasons to believe or absence of recorded reasons; (ii) whether the attachment of the appellants' bank balances and immovable properties, including property acquired earlier or financed through housing loan, was justified as property or value thereof involved in money-laundering; (iii) whether the transfer of funds to M/s Mind is King was proved to be tainted proceeds of crime linked to the fraudulent scheme.

Issue (i): whether the provisional attachment under Section 5 of the Prevention of Money Laundering Act, 2002 was invalid for want of communication of reasons to believe or absence of recorded reasons.

Analysis: The attachment order itself contained the material relied upon and the reasons for formation of belief. Section 5 requires the competent officer to record reasons to believe in writing on the basis of material in possession, but it does not require prior communication of those reasons to the affected persons. The material before the authority included FIRs, statements, bank records, and other investigative material showing diversion of funds and prima facie laundering activity. The requirement of a pre-decisional hearing was also not read into the provision, particularly when the statute provides for subsequent adjudication.

Conclusion: The provisional attachment was not invalid on this ground and the objection was rejected against the appellants.

Issue (ii): whether the attachment of the appellants' bank balances and immovable properties, including property acquired earlier or financed through housing loan, was justified as property or value thereof involved in money-laundering.

Analysis: The record showed that M/s Mind is King received Rs. 5.50 crores from M/s FMLC and that the balances in the two accounts represented part of those receipts. The immovable properties of the husband and wife were attached as value thereof after the proceeds were found to have been dissipated, and the property of the partner was attached because the firm was used as a conduit for receiving illicit funds. The fact that some assets were acquired earlier or through finance did not displace the statutory power to attach value equivalent assets when the direct proceeds had been layered or exhausted.

Conclusion: The attachment of the bank balances and immovable properties was upheld against the appellants.

Issue (iii): whether the transfer of funds to M/s Mind is King was proved to be tainted proceeds of crime linked to the fraudulent scheme.

Analysis: The evidence showed a massive fraudulent multilevel marketing scheme, collection of deposits from members on false promises of returns, and diversion of funds to connected entities and accounts. The appellants' firm was formed with persons connected to the scheme, received substantial funds from M/s FMLC, and the appellant's statements and bank records corroborated the flow of money. The allegation of coercion was found unsupported by any corroboration, and the explanation that the payments were advance consideration for books was not accepted in light of the surrounding material and admissions.

Conclusion: The funds credited to M/s Mind is King were treated as proceeds of crime and the challenge failed against the appellants.

Final Conclusion: The attachment was held to be lawful and the appeals were found to be without merit.

Ratio Decidendi: For provisional attachment under the money-laundering law, recording reasons to believe in writing on the basis of relevant material is sufficient, prior communication of those reasons is not mandatory, and assets may be attached as value thereof where direct proceeds of crime have been layered or dissipated.

Issues: Whether non-supply of the relied-upon documents, particularly the FIR and other material forming the basis of the show-cause proceedings, vitiated the order retaining the seized property under the Prevention of Money Laundering Act, 2002.

Analysis: The record showed repeated requests by the appellant for the complete set of relied-upon documents, including the FIRs and other foundational material. The adjudicatory record also reflected that the authority relied upon those documents while issuing the notice and recording reasons. The decision drew a distinction between the ECIR, which need not be supplied, and the FIR and other relied-upon material, which were required to be furnished. Since the materials actually relied upon were not shown to have been supplied, the adjudication was held to be contrary to the legal requirement of disclosure and fair procedure. The contention that the appellant could not seek documents gathered from other premises did not cure the failure to provide the documents specifically relied upon in the proceedings.

Conclusion: The non-supply of the relied-upon documents vitiated the impugned retention order, and the order was rightly set aside in favour of the appellant.

Ratio Decidendi: When an authority relies on specific documents to justify retention or continuation of proceedings under the Prevention of Money Laundering Act, 2002, those documents must be disclosed to the affected party, and failure to supply such relied-upon material renders the order unsustainable.

Issues: Whether the impugned freezing and retention order could be sustained when the documents relied upon for the show-cause notice and the recorded reasons to believe were not supplied to the appellant, and whether such non-supply vitiated the proceedings under the PMLA.

Analysis: The Tribunal held that the statutory scheme and the governing precedent require the authority to serve all relied upon documents, including the material forming the basis of the reasons to believe, along with the show-cause notice and to ensure fair disclosure during adjudication. On the record, the show-cause notice was not accompanied by the relied upon documents, and some foundational materials, including FIRs relied upon for initiation of action, were never supplied even later. The Tribunal treated this omission as fatal because the undisclosed materials were central to the formation of the case against the appellant and not merely ancillary.

Conclusion: The non-supply of the relied upon documents violated the mandatory procedure and rendered the impugned order unsustainable; the appeal was therefore allowed and the freezing and seizure directions were set aside.