Reasonable belief for provisional attachment suffices where material shows nexus to laundering; confiscation requires full adjudication.

A reasonable-belief standard at the provisional attachment and confirmation stage under PMLA suffices where material (ECIR, FIRs, chargesheets, statements and documentary bank/police records) has a rational nexus to alleged laundering; full proof for confiscation remains for the Special Court. Properties (including those acquired before December 2015) may be treated as proceeds of crime if linkable to laundering of scheduled-offence proceeds; unexplained deposits, loan repayments and income-asset discrepancy together with statements can establish that nexus. Valuations by a competent government agency are admissible and challenges based solely on tax declarations do not negate disproportionate acquisition. Appeals against confirmation were dismissed.

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Issues: (i) Whether the provisional attachment order dated 12.10.2017 and its confirmation under Sections 5(1) and 8(1) of the Prevention of Money Laundering Act, 2002 was lawful and supported by material establishing reason to believe; (ii) Whether attached properties (including those acquired prior to December 2015) and their valuation could be treated as proceeds of crime or ascribable to money laundering.

Issue (i): Whether the provisional attachment order and its confirmation were lawful.

Analysis: The material relied upon for forming reason to believe included ECIR, FIRs, chargesheets, multiple statements recorded under Section 50 of the PMLA and documentary material from police and financial institutions. The requirement at the provisional attachment and confirmation stage is limited to whether there exists a reasonable or substantially probable cause to form the belief that the property is proceeds of crime and that non-attachment may frustrate confiscation proceedings; it does not require proof beyond doubt or a full adjudication on confiscation which is for the Special Court under Section 8(5). The available statements and documentary material had a rational nexus to the belief formation and therefore satisfied the threshold under Section 5(1) and Section 8(1).

Conclusion: The confirmation of the provisional attachment under Sections 5(1) and 8(1) of the Prevention of Money Laundering Act, 2002 is lawful and in favour of the Respondent.

Issue (ii): Whether properties acquired prior to December 2015 and the valuations relied upon can be treated as proceeds of crime or ascribable to money laundering.

Analysis: The definition of proceeds of crime under Section 2(1)(u) is wide and permits attachment of property or value-equivalent assets irrespective of acquisition date where a nexus with laundering of scheduled offence proceeds is established. The inquiries into source of funds, unexplained cash deposits, loan repayments, and discrepancies between declared income and asset acquisitions, together with statements under Section 50, provided a basis to infer nexus with proceeds of scheduled offences. Valuation was performed by a competent government agency; challenges to valuation and attempts to rely solely on income-tax declarations do not negate the material showing disproportionate acquisition. The statutory threshold in relation to Part B offences was removed by amendment in 2013 and is not an impediment to attachment in the present ECIR registered in 2016.

Conclusion: The attached properties, including those acquired prior to December 2015 where a nexus with proceeds of crime exists, and the valuations relied upon, are ascribable to money laundering; conclusion is in favour of the Respondent.

Final Conclusion: The appeals against confirmation of the provisional attachment are without merit on the proved material and are dismissed; the confirmation order stands, preserving the statutory scheme that provisional attachment at the investigatory stage requires reasonable belief based on material rather than full proof required for confiscation.

Ratio Decidendi: At the provisional attachment and confirmation stage under the Prevention of Money Laundering Act, 2002, a reasonable belief grounded in material having a rational nexus to the alleged laundering activity suffices to lawfully attach property; full adjudication on confiscation remains for the Special Court under Section 8(5).

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