Provisional attachment under PMLA cannot survive once the scheduled offences end in final acquittal and no proceeds of crime basis remains.

Under the Prevention of Money-Laundering Act, provisional attachment can continue only while there is a valid foundation to treat property as proceeds of crime derived from scheduled criminal activity. The Tribunal noted that the statutory definition of proceeds of crime depends on the existence of such criminal activity, and that section 8(5), as then in force, provided for cessation of attachment where the scheduled-offence trial ends in acquittal. As the acquittals in the linked criminal cases had attained finality, the basis for attachment no longer survived, and the property was ordered to be released from attachment.

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Issues: Whether the provisional attachment of property under the Prevention of Money-Laundering Act, 2002 could survive after the scheduled offences on which it was founded ended in acquittal, and whether the property was therefore liable to be released from attachment.

Analysis: The attachment power under section 5 of the Prevention of Money-Laundering Act, 2002 operates only where there is material to believe that a person is in possession of proceeds of crime derived from criminal activity relating to a scheduled offence. The definition of proceeds of crime in section 2(1)(u) is dependent upon the existence of such criminal activity. The Tribunal noted that section 8(5), as it then stood, provided that where the trial for the scheduled offence ends in acquittal, the attachment ceases to have effect. Since the acquittals of the husband of the appellant in the relevant criminal cases had become final, the foundational basis for treating the property as proceeds of crime no longer survived. In that situation, the property could not continue to remain attached under the Act.

Conclusion: The attachment was liable to be vacated and the property was ordered to be released from attachment in favour of the appellant.

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