Good-faith purchase without nexus to crime prevents property from being treated as proceeds of crime.

A transferee who acquires property in good faith for valuable consideration, supported by documented transactions and without nexus to the scheduled offence, cannot have that property treated as proceeds of crime under the Prevention of Money Laundering Act, 2002. The record showed a housing loan, income documents, title search papers and non-encumbrance records, while the original owner's prior transfer documents also supported possession and transfer before the appellant's purchase. In the absence of material showing collusion or prior knowledge of criminality, the property was not liable to attachment or confiscation, and the attachment was set aside.

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Issues: Whether the appellant was a bona fide purchaser who acquired the subject property in good faith for consideration without nexus to the scheduled offence, and whether the subject property was therefore liable to be treated as proceeds of crime and subjected to attachment and confiscation under the Prevention of Money Laundering Act, 2002.

Analysis: The material on record showed that the appellant purchased the property through documented transactions, supported by a housing loan, income records, title search papers, and non-encumbrance documents. The record also showed that the property had been dealt with by the original owner through an agreement to sell, payment receipts, affidavit, power of attorney, and will, indicating transfer and possession before the appellant's purchase. No material was brought to establish that the appellant had any nexus or collusion with the accused or prior knowledge of the criminality attached to the property. The legal position applied was that the Act targets proceeds of crime, but a transferee who acquires property in good faith for valuable consideration without participation in the crime is not to be treated as holding proceeds of crime in his own hands.

Conclusion: The appellant was held to be a bona fide purchaser in good faith for consideration, and the subject property was held not to be proceeds of crime or liable to attachment and confiscation under the Act.

Final Conclusion: The attachment over the subject property was set aside and the appeal succeeded.

Ratio Decidendi: A property acquired by a transferee in good faith for valuable consideration, without nexus to or knowledge of the underlying criminality, cannot be treated as proceeds of crime in the transferee's hands for the purposes of attachment and confiscation under the Prevention of Money Laundering Act, 2002.

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