Provisional attachment under money-laundering law requires a prima facie nexus with a scheduled offence and proceeds of crime.

Provisional attachment under the Prevention of Money-Laundering Act, 2002 was found unsustainable where the investments were made before the relevant offences were added to the Schedule and the record did not show a prima facie nexus between the property and proceeds of crime. The Tribunal noted that allegations of cheating and misrepresentation remained for determination in the pending criminal case and, on the material before it, did not by themselves justify money-laundering attachment. The attachment and its confirmation were therefore set aside, and the property was ordered to be released.

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Issues: Whether the provisional attachment and its confirmation were sustainable under the Prevention of Money-Laundering Act, 2002 when the alleged investments and predicate allegations related to a period before the relevant offences were brought into the Schedule and the material did not disclose a prima facie money-laundering case.

Analysis: The attachment was tested only on the question whether the ingredients for action under the Prevention of Money-Laundering Act, 2002 were made out. The material showed that the investments in question were made between 2006 and March 2009, whereas the offences sought to be relied upon were included in the Schedule only with effect from 1 June 2009. The record also did not disclose cogent prima facie material to show that the share transactions themselves constituted proceeds of crime for the purposes of the Act. The allegations of cheating and misrepresentation were left to be determined in the pending criminal proceedings, and could not by themselves justify attachment under the money-laundering in the facts presented.

Conclusion: The provisional attachment and its confirmation were not sustainable in law and were set aside.

Final Conclusion: The appeal succeeded, the attachment stood lifted, and the matter was held not to disclose a prima facie case of money laundering under the Act on the facts before the Tribunal.

Ratio Decidendi: Provisional attachment under the Prevention of Money-Laundering Act, 2002 cannot be sustained unless the record discloses a prima facie nexus between property and a scheduled offence in force at the relevant time, resulting in proceeds of crime within the meaning of the Act.

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