Prejudice test in natural justice and proceeds-of-crime tracing sustained attachment despite service defects and rebuttal failure

Procedural defects in service of notice and non-supply of complaint material did not vitiate the confirmation of provisional attachment where the appellant appeared, filed a reply, had access to the relied upon documents, and showed no actual prejudice; remand was therefore unnecessary. On merits, the Tribunal found a sufficient chain of transactions indicating accommodation entries and proceeds of crime, while the appellant failed to explain the source of the investments or rebut the allegations with supporting material. The document states that the attachment was sustained because the substantive record independently supported a money-laundering linkage and the procedural objections did not justify interference.

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Issues: (i) Whether the confirmation of provisional attachment was vitiated for want of valid service of notice, non-supply of the original complaint and relied upon documents, and denial of fair opportunity. (ii) Whether the attachment was sustainable on merits on the basis that the appellant company's investment and assets were linked to proceeds of crime through accommodation entries.

Issue (i): Whether the confirmation of provisional attachment was vitiated for want of valid service of notice, non-supply of the original complaint and relied upon documents, and denial of fair opportunity.

Analysis: The record showed that the first notice was sent to an old address and the second notice was also served at an address no longer occupied by the appellant, but notice was additionally published and the appellant entered appearance and filed a reply. The appellant had access to the original complaint and relied upon documents during the adjudication, and no contemporaneous objection of non-supply was raised by it when the matter was heard. The Tribunal applied the prejudice test and held that procedural infraction, even if assumed, does not by itself invalidate the order unless actual prejudice is shown. It further held that remand would be futile where the appellant failed to demonstrate any real prejudice or any new material that could alter the result.

Conclusion: The challenge based on violation of natural justice failed and the order was not set aside on procedural grounds.

Issue (ii): Whether the attachment was sustainable on merits on the basis that the appellant company's investment and assets were linked to proceeds of crime through accommodation entries.

Analysis: The material relied upon by the respondent showed a chain of transactions involving persons associated with the generation and laundering of illicit funds, including accommodation entries routed through Kolkata-based companies and credited as share capital or unsecured loans. The appellant did not furnish any satisfactory explanation or documentary material to establish that the invested sums came from legitimate sources. On the available material, the Tribunal found substantial probable cause to believe that the appellant's investments and attached assets were traceable to proceeds of crime and that the appellant had not rebutted the allegations on merits.

Conclusion: The attachment was upheld on merits and the appellant's challenge failed.

Final Conclusion: The Tribunal upheld the attachment and declined to interfere, holding that the procedural objections did not justify remand and the substantive material supported the finding of money-laundering linkage.

Ratio Decidendi: A procedural lapse in service or hearing does not warrant interference where the affected party fails to show prejudice and the substantive material independently supports the impugned attachment.

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