Provisional attachment under money-laundering law upheld where cash in CBI custody was linked to alleged proceeds of crime.

Provisional attachment under the Prevention of Money-laundering Act can be sustained where the authority has material to form a bona fide belief that the cash represents proceeds of crime and may be concealed or dealt with to defeat confiscation. Physical possession by the appellant is not essential, so attachment was not invalid merely because the cash was in CBI custody. The absence of a final charge in the scheduled offence did not bar action against proceeds of crime, and the factual claim that the cash was accounted for or below the alleged threshold was unsupported. The appellant also failed to rebut the statutory burden with reliable source documents, so the attachment was confirmed.

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Issues: (i) Whether provisional attachment under the Prevention of Money-laundering Act could be sustained where the attached cash was stated to be in the custody of the CBI and not in the physical possession of the appellant. (ii) Whether the appellant's contention that he was not shown to be charged with the scheduled offence, or that the amount was accounted for and below the alleged threshold, could defeat attachment. (iii) Whether the competent authority had the requisite reasons to believe and whether the appellant discharged the burden of showing that the money was not proceeds of crime.

Issue (i): Whether provisional attachment under the Prevention of Money-laundering Act could be sustained where the attached cash was stated to be in the custody of the CBI and not in the physical possession of the appellant.

Analysis: The statutory scheme of section 5 permits attachment of property involved in money-laundering where the authority has reason to believe, on the basis of material in possession, that the property represents proceeds of crime and is likely to be concealed, transferred, or dealt with in a manner frustrating confiscation. The Tribunal held that physical custody with the appellant was not a prerequisite. Even if the cash was seized by the CBI, there remained a real apprehension that it could be withdrawn or dissipated and thereby defeat the proceedings.

Conclusion: The attachment was not invalid merely because the cash was in CBI custody, and this contention was rejected.

Issue (ii): Whether the appellant's contention that he was not shown to be charged with the scheduled offence, or that the amount was accounted for and below the alleged threshold, could defeat attachment.

Analysis: The Tribunal held that attachment under the Prevention of Money-laundering Act is directed against proceeds of crime and is not confined only to persons finally charged or convicted in the scheduled offence. A person in possession of proceeds of crime may be proceeded against even if he is not the principal accused in the scheduled offence. The plea based on the amount allegedly being below the threshold was found contrary to the record, which itself referred to larger sums seized and attached. The Tribunal also found no material to accept the bald claim that the cash was duly accounted for or arose from genuine business activity.

Conclusion: The absence of a sustainable challenge to the scheduled-offence linkage or threshold argument did not defeat the attachment, and this contention failed.

Issue (iii): Whether the competent authority had the requisite reasons to believe and whether the appellant discharged the burden of showing that the money was not proceeds of crime.

Analysis: The Tribunal held that the material collected in the investigation, including the charge sheets and surrounding evidence, furnished a nexus for the formation of the statutory belief. At the stage of provisional attachment, the authority was not required to prove the case beyond doubt, but only to have material amounting to substantially probable cause. The appellant failed to produce balance sheets, account particulars, or other reliable documents showing the source of the cash and how it stood outside the proceeds of crime. The burden under the Act was therefore not discharged.

Conclusion: The reasons to believe were upheld and the appellant failed to displace the inference that the attached properties were proceeds of crime.

Final Conclusion: The Tribunal found no jurisdictional error or legal infirmity in the confirmation of attachment, and the appellant was not entitled to the relief sought.

Ratio Decidendi: Under the Prevention of Money-laundering Act, property may be provisionally attached if there is material to form a bona fide belief that it represents proceeds of crime and may be concealed or transferred, even when it is not in the appellant's physical possession and even if the appellant is not the principal accused in the scheduled offence.

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