Provisional attachment under PMLA requires specific allegations against purchasers; absent that, attachment cannot be confirmed.

Provisional attachment under the Prevention of Money Laundering Act was contested for two immovable properties sold to purchasers not alleged to have committed the predicate offence. The tribunal applied the principle that confirmation of attachment requires a demonstrable connection between the property and proceeds of crime as specifically alleged in the FIR/ECIR; absent any specific allegation against the purchasers and with parallel civil litigation on the sale pending, converting the civil dispute into criminal proceeds was impermissible. The provisional attachments were set aside and purchasers' appeals allowed while the challenge by the enforcement agency was dismissed.

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Issues: Whether the provisional attachment of two immovable properties could be lawfully confirmed where (i) no allegation of sale at undervalue with respect to those purchasers appears in the FIR or ECIR and (ii) civil litigation between the vendor and purchasers over the sale is pending.

Analysis: The appeals concern provisional attachment of two office units alleged to have been sold at undervalued consideration and treated as proceeds of crime. The record shows the criminal investigation and prosecution relate to alleged offending conduct of certain promoters and their entities; no specific allegation in the FIR or ECIR asserts that the two purchasers committed the predicate offence by purchasing at undervalue. Evidence regarding payments, escrow receipts and release deeds for the units was before the adjudicating authority. The civil suit filed by the vendor to challenge the sale remains pending. The confirmation of attachment requires a connection between the property and proceeds of the predicate offence as alleged in the criminal proceedings; where no such specific allegation is made against the purchasers and parallel civil remedies are pending, converting the civil dispute into a basis for criminal attachment is not supported. The statements relied upon and the valuations adduced were examined in light of these legal constraints.

Conclusion: The provisional attachment of the two immovable properties is set aside and the appeals by the purchasers are allowed; the appeal by the Enforcement Directorate challenging that result is dismissed.

Ratio Decidendi: Provisional attachment under the Prevention of Money Laundering Act, 2002 cannot be sustained as proceeds of crime in respect of property where the FIR/ECIR does not allege the purchasers' commission of the predicate offence and where the dispute over the sale is a subject of pending civil litigation.

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