Bona fide commercial receipts are not proceeds of crime under PMLA absent nexus to the scheduled offence or laundering knowledge.

Property received through a bona fide commercial sponsorship agreement for promotional services, paid by cheque in the ordinary course of business, was not treated as proceeds of crime under the PMLA. The amount in the appellant's bank account was used for club running expenses, player payments and administrative costs, and the record did not show retention, diversion, concealment, knowledge of illegal source, or direct or indirect involvement in laundering. On those facts, the bank balance lacked the necessary nexus to the scheduled offence and was not liable to provisional attachment or confirmation; the attachment was set aside.

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Issues: Whether the amount lying in the appellant's bank account was liable to provisional attachment and confirmation under the Prevention of Money Laundering Act, 2002 as proceeds of crime, or whether the appellant was a bona fide receiver for valuable consideration without nexus to the alleged scheduled offence.

Analysis: The co-sponsorship payment was made under a commercial agreement for promotional services and was received through cheques in the ordinary course of business. The amount was utilised for the club's running expenses, player payments and allied administrative costs, with no material showing that any part was retained, diverted or concealed by the appellant. The record also did not establish that the appellant had knowledge of the illegal source of the funds or any direct or indirect involvement in the alleged laundering activity. On the facts, the amount in the appellant's bank account on the date of attachment was traced to bona fide sponsorship receipts and not shown to be the value of proceeds of crime in the appellant's hands.

Conclusion: The attached bank balance was not proceeds of crime and was not liable to provisional attachment or confirmation; the appeal succeeded and the attachment was set aside.

Ratio Decidendi: Property received in a bona fide commercial transaction for valuable consideration, without nexus to the scheduled offence and without proof of knowledge or involvement in laundering, does not become proceeds of crime in the hands of the recipient under the PMLA.

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