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Issues: (i) Whether the provisional attachment of the appellant's immovable property under the Prevention of Money Laundering Act, 2002 could be sustained in view of the arbitral award and the competing claims regarding the amount received from the second respondent; (ii) what relief, if any, should be granted against the confirmed attachment.
Issue (i): Whether the provisional attachment of the appellant's immovable property under the Prevention of Money Laundering Act, 2002 could be sustained in view of the arbitral award and the competing claims regarding the amount received from the second respondent.
Analysis: The arbitral award resolved the civil dispute between the parties, but it did not determine whether the transaction involved proceeds of crime or money laundering, which remained a distinct issue under the special statute. The Tribunal accepted that property can be attached under the Prevention of Money Laundering Act, 2002 even if the possessor is not charged with the scheduled offence, and that the question of confiscation ultimately lies before the Special Court. On the material available, the Tribunal found that funds from the alleged fraud had been invested in the subject property, but also held that the amount actually traceable to the appellant should be taken at Rs. 4.67 crores, as reflected in the record and the appellant's own submissions. The Tribunal therefore concluded that complete release without safeguards was not warranted, but the attachment could be modified on terms.
Conclusion: The attachment was not wholly set aside on merits, but was directed to be released subject to the appellant furnishing a fixed deposit receipt of Rs. 4.67 crores as security.
Final Conclusion: The appeal succeeded in part: the confirmed attachment was modified and the property was ordered to be released against security, leaving the question of final confiscation to the Special Court.
Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, property alleged to represent proceeds of crime may be attached even if the possessor is not an accused in the scheduled offence, but the appellate authority may modify attachment and impose security conditions where the traceable tainted amount is ascertainable and final confiscation remains for the Special Court.
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