Provisional attachment under PMLA falls when the scheduled offence ends in merits-based acquittal and no independent laundering material exists.
Provisional attachment under the Prevention of Money Laundering Act could not be sustained where the scheduled offence ended in acquittal on merits and no independent material showed a distinct laundering offence. The Tribunal found that the predicate prosecution had failed, the allegations underlying the enforcement complaint were the same, and the attached properties could not continue to be treated as proceeds of crime. It also held that the amendment governing continuation of attachment was prospective and did not rescue the impugned action. The attachment, confirming adjudication, and related proceedings were set aside, with release of the attached properties directed.
Issues: (i) whether the provisional attachment and the consequential adjudication under the Prevention of Money Laundering Act could survive after the accused was acquitted of the scheduled offence on merits; (ii) whether the amended provision governing continuation of attachment applied retrospectively to the case.
Issue (i): whether the provisional attachment and the consequential adjudication under the Prevention of Money Laundering Act could survive after the accused was acquitted of the scheduled offence on merits.
Analysis: The predicate prosecution under the Prevention of Corruption Act had ended in acquittal after trial, and the findings recorded that the prosecution failed to prove the charge and that the assets and income explained by the accused and his family members substantially reduced the alleged disproportion. Since the enforcement complaint was founded on the same allegations and no independent material showing a distinct laundering offence was shown, the basis for treating the attached properties as proceeds of crime did not survive. Once the scheduled offence failed on merits and no appeal was filed against that acquittal, the continuation of attachment and prosecution under the money-laundering proceedings was held to be unsustainable.
Conclusion: The issue was answered in favour of the appellants. The attachment and the impugned adjudication could not survive after acquittal in the scheduled offence.
Issue (ii): whether the amended provision governing continuation of attachment applied retrospectively to the case.
Analysis: The Tribunal accepted the contention that the amendment to the continuation-of-attachment provision was prospective and not meant to operate against proceedings already initiated on the earlier regime. In any event, because the scheduled offence had resulted in acquittal and the foundational allegation itself had failed, the amendment question did not alter the result.
Conclusion: The issue was effectively decided in favour of the appellants, and the amendment did not save the impugned attachment.
Final Conclusion: The appeal succeeded, the provisional attachment and the confirming order were set aside, and the attached properties were held liable to be released.
Ratio Decidendi: Where the money-laundering proceedings rest entirely on a scheduled offence that ends in acquittal on merits, and no independent laundering material is shown, the attachment and related adjudication cannot be sustained.
TaxTMI 
AI Drafter ✕
TaxTMI 
