Earnest money in a bona fide land sale was not treated as proceeds of crime, and attachment against an innocent third party failed.

Earnest money received under a bona fide land sale agreement, and later forfeited on the purchaser's default, was not established as proceeds of crime under PMLA where the appellant was not named in the scheduled offence and no material showed her knowledge, nexus, or participation in the alleged criminal activity. The Tribunal found that a civil-commercial transaction, without proof of derivation from criminal activity, could not sustain attachment against an innocent third party. The attachment and confirmation orders were therefore held unsustainable, and the attached immovable properties were ordered to be released.

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Issues: Whether the amount received by the appellant as earnest money, later forfeited under the terms of the agreement, could be treated as proceeds of crime and the attached properties confirmed under the Prevention of Money Laundering Act, 2002.

Analysis: The Tribunal held that the appellant was not named in the scheduled offence, was not shown to have any link, nexus, knowledge, or involvement with the criminal activity attributed to the accused persons, and there was no material to show that she knowingly assisted in, or was a party to, any process connected with proceeds of crime. The receipt of earnest money arose from a bona fide civil/commercial transaction for sale of land, and the forfeiture occurred under the contractual terms when the purchaser failed to perform. On these facts, the amount in the appellant's hands was not established to be derived from criminal activity, and the attachment could not be sustained against an innocent third party.

Conclusion: The attachment and confirmation orders were unsustainable against the appellant, and the appeals were allowed with release of the attached immovable properties.

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