Proceeds of crime under money laundering law: writ quashing refused where authorities acted on prima facie material and reason to believe.

Proceedings under the Prevention of Money Laundering Act were not quashed in writ jurisdiction because the competent authority had acted on prima facie material and reason to believe that the property represented proceeds of crime. The court noted that the statutory scheme covers a broad definition of proceeds of crime, permits action where material exists, and does not render proceedings authority merely because the allegations are disputed. Since the petitioners had an opportunity under the Act and could participate in the enquiry and investigation, the challenge was rejected and the writ petition dismissed.

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Issues: Whether the complaint and consequential proceedings initiated under the Prevention of Money Laundering Act, 2002 could be quashed on the ground that the authorities lacked power and that no material existed to show the petitioners were in possession of proceeds of crime.

Analysis: The petition challenged the proceedings arising from provisional attachment and the complaint filed under the Act. The Court noted that the statutory scheme defines proceeds of crime broadly, penalises involvement in any process connected with such proceeds, and permits the competent authority to proceed on the basis of prima facie material and reason to believe. The petitioners had been afforded an opportunity under the Act, and the complaint had been registered after satisfaction that material existed against them. The Court found that the proceedings could not be termed without authority or bereft of material merely because the petitioners disputed the allegations. It further held that the petitioners were required to participate in the enquiry and investigation and could pursue appropriate remedies before the competent forum after completion of the process.

Conclusion: The challenge to the proceedings under the Prevention of Money Laundering Act, 2002 was rejected and the writ petition was dismissed.

Ratio Decidendi: Where the competent authority acts on prima facie material and reason to believe that property represents proceeds of crime, proceedings under the Prevention of Money Laundering Act, 2002 will not be quashed in writ jurisdiction merely because the allegations are disputed.

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