PMLA proceeds of crime require a proven nexus to criminal activity; legitimate royalty receipts cannot be attached without tainted funds.

Royalty and licence-fee receipts from lawful copyright licensing were not "proceeds of crime" under PMLA because the enforcement material did not show that the respondent derived any property from criminal activity linked to a scheduled offence. The tribunal found no reliable evidence of a tainted-money trail, no transfer or siphoning of illicit funds to the respondent, and no basis to quantify proceeds of crime in the respondent's hands. Mere retention of legitimate commercial receipts, without a direct nexus to criminal activity, was insufficient to justify provisional attachment. The bank balances were therefore not liable to attachment.

---

---

Issues: Whether the provisional attachment of the respondent's bank balances as alleged proceeds of crime under the Prevention of Money Laundering Act, 2002 was justified.

Analysis: The attached funds represented royalty and licence-fee receipts arising from lawful copyright licensing arrangements. The material relied upon by the enforcement authority did not establish that the respondent derived or obtained any property as a result of criminal activity relating to a scheduled offence, nor that any tainted funds were transferred, passed on, or siphoned from the alleged wrongdoer to the respondent. The evidence, including witness statements, did not provide a reliable basis to quantify any proceeds of crime in the respondent's hands. The tribunal held that mere retention of legitimate commercial receipts, without proof of a direct nexus to criminal activity or a proven flow of tainted money, cannot satisfy the statutory definition of proceeds of crime.

Conclusion: The bank balances were not liable to be treated as proceeds of crime, and the provisional attachment was not sustainable.

---