Proceeds of crime under PMLA require sustainable proof; attachment failed where property came from legitimate sale proceeds.
Attachment under the Prevention of Money Laundering Act, 2002 cannot be confirmed unless there is legally sustainable material showing that the property is proceeds of crime. The record here indicated that the appellant acquired the attached flat from sale proceeds of his own immovable property, paid through cheque, and no charge-sheet was filed against him. The alleged link to illicit funds rested on accusations against a deceased person, which was insufficient to sustain continued attachment. On that basis, the attachment was set aside and the flat was ordered to be released.
Issues: Whether the provisional attachment and its confirmation under the Prevention of Money Laundering Act, 2002 could be sustained when the appellant was not an accused in the predicate offence, the property was shown to have been acquired from sale proceeds of his own assets, and the alleged link to crime rested on allegations against a deceased person.
Analysis: The attachment was founded on the premise that money credited to the appellant's account represented illicit commission derived from the alleged embezzlement. The record showed, however, that the appellant had sold immovable property through registered sale deeds, the sale consideration was received by cheque, and the amounts were used to acquire the attached flat. There was no charge-sheet against the appellant and no material establishing that the property itself was "proceeds of crime" within the meaning of the Act. The decision also noted that the alleged principal offender had died before conclusion of the criminal proceedings and that, in such circumstances, attachment could not be continued on the basis of an unproven accusation against a dead person.
Conclusion: The attachment could not be sustained and the appellant succeeded.
Final Conclusion: The impugned attachment order was set aside and the attached flat was directed to be released, bringing the proceedings to an end in the appellant's favour.
Ratio Decidendi: Property cannot be confirmed as proceeds of crime under the Prevention of Money Laundering Act, 2002 unless there is legally sustainable material linking it to criminal activity, and attachment cannot survive where the alleged foundation of guilt against the relevant person is not established.
TaxTMI 
AI Drafter ✕
TaxTMI 
