Bona fide property purchase protects third-party claimant from PMLA attachment absent notice, hearing, or proof of involvement.

A claimant who shows a prior bona fide purchase for full consideration through lawful banking channels, and is not linked to the scheduled offence or money-laundering activity, cannot be treated as having committed an offence under the PMLA on the basis of the record here. The flat could not be sustained as proceeds of crime against such a claimant, particularly where the agreements to sell and construction agreements pre-dated attachment and the mandatory notice and hearing requirements for a third-party claimant were not complied with. The attachment was therefore unsustainable as against the appellant's flat, while other proceedings against the accused persons were left unaffected.

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Issues: (i) Whether the appellant had committed any offence under section 3 of the Prevention of Money Laundering Act, 2002. (ii) Whether the subject property was proceeds of crime and could validly be attached despite the appellant's claim founded on prior agreements and full payment of consideration.

Issue (i): Whether the appellant had committed any offence under section 3 of the Prevention of Money Laundering Act, 2002.

Analysis: The appellant was not named in the FIR, the ECIR, or the original complaint, and no material showed any link, nexus, or participation by her in the scheduled offence or in money-laundering activity. The purchase consideration was paid through documented banking channels from her own account before the FIR and ECIR, and there was no case that the funds used by her were tainted. On the record, the appellant was only a purchaser of the flat under agreements entered into on commercial terms.

Conclusion: The issue was answered in favour of the appellant; she was not shown to have committed any offence under section 3.

Issue (ii): Whether the subject property was proceeds of crime and could validly be attached despite the appellant's claim founded on prior agreements and full payment of consideration.

Analysis: The appellant had executed agreements to sell and construction agreements before the attachment, had paid the entire consideration through banking channels, and was a claimant to the property. The Authority found that the respondent was aware of her claim but failed to serve the mandatory notice or afford hearing as required when property is claimed by a person other than the noticee. The appellant's claim was supported as a bona fide acquisition for fair value, and the property could not be treated as proceeds of crime merely because the project was later implicated in money-laundering proceedings. The attachment on the footing of equivalent value could not survive against her claim in the absence of any material showing her involvement in the offence.

Conclusion: The issue was answered in favour of the appellant; the attachment of the flat was unsustainable.

Final Conclusion: The appeal succeeded and the provisional attachment and its confirmation were set aside insofar as they concerned the appellant's flat, without affecting other pending proceedings against the accused persons.

Ratio Decidendi: A claimant who establishes a prior bona fide purchase for full consideration through lawful banking channels, and who is not shown to be involved in the scheduled offence or money-laundering, cannot have her property attached without compliance with the mandatory notice and hearing requirement under the PMLA.

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