PMLA attachment requires recorded material linking property to proceeds of crime; suspicion alone cannot sustain the order.

Section 5 of the PMLA requires a recorded, material-based reason to believe that a person holds proceeds of crime and may conceal or transfer them to defeat confiscation; the text emphasises that this nexus must appear in the attachment order itself and cannot rest on suspicion or later explanations in a counter affidavit. It also notes that where the connected criminal proceedings and PMLA proceedings had already been quashed, the summons under Section 50 and the provisional attachment were described as lacking a valid foundation and therefore unsustainable.

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Issues: Whether the summons issued under Section 50 of the Prevention of Money Laundering Act, 2002 and the provisional attachment order passed under Section 5 of the Prevention of Money Laundering Act, 2002 were sustainable when the petitioner had already secured quashing of the connected criminal proceedings and when the attachment was founded on an asserted belief that the insurance policies were proceeds of crime.

Analysis: The quashing of the proceedings against the petitioner under the scheduled offences and under the PMLA meant that there was no subsisting case against him on which the impugned measures could validly rest. For provisional attachment under Section 5, the competent authority must have reason to believe, recorded in writing, on the basis of material in its possession, that a person is in possession of proceeds of crime and that such proceeds are likely to be concealed, transferred or dealt with so as to frustrate confiscation proceedings. That belief must have a direct nexus with the material available and cannot rest on suspicion, conjecture, or a mechanical repetition of statutory language. The order also could not be improved by later explanations in the counter affidavit, because the validity of a public order must be tested on the reasons contained in the order itself. The material disclosed in the attachment order did not establish the requisite live link between the petitioner's insurance policies and proceeds of crime, and the respondents' case proceeded essentially on suspicion that the properties may have been derived from tainted funds.

Conclusion: The summons and the provisional attachment order were without jurisdiction and unsustainable. They were liable to be quashed in favour of the petitioner.

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