Bona fide purchaser protection under PMLA limits attachment where acquisition preceded predicate offences and no criminal involvement is alleged.

Attachment and retention under the Prevention of Money Laundering Act cannot be sustained against a bona fide purchaser who acquired property through sale deeds before the predicate offences were registered and who was not alleged to be involved in the criminal activity; on those facts, the attachment was unsustainable against that purchaser. Section 120-B of the Indian Penal Code does not, by itself, convert a non-scheduled offence into a scheduled offence: conspiracy is relevant only where the object of the conspiracy is itself a scheduled offence. The legal position is that the Schedule to the Act cannot be expanded by treating every alleged conspiracy as sufficient to trigger PMLA consequences.

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Issues: (i) whether attachment and retention proceedings under the Prevention of Money Laundering Act, 2002 could be sustained against a bona fide purchaser who acquired the properties before registration of the predicate offences; (ii) whether an offence under Section 120-B of the Indian Penal Code, 1860 becomes a scheduled offence when the alleged conspiracy is to commit offences not otherwise included in the Schedule.

Issue (i): whether attachment and retention proceedings under the Prevention of Money Laundering Act, 2002 could be sustained against a bona fide purchaser who acquired the properties before registration of the predicate offences.

Analysis: The properties were acquired through sale deeds executed before the predicate crimes and before the Enforcement Case Information Report was registered. The petitioner was not an accused in the predicate offences or in the money-laundering proceedings. On the admitted chronology, the purchase preceded the criminal proceedings against the vendors, and the petitioner's possession of the properties could not, on those facts, be treated as involving proceeds of crime. Proceedings under the Act cannot be used to fasten liability on a purchaser who had no involvement in the alleged criminal activity and whose transactions had already been completed.

Conclusion: The impugned attachment proceedings were unsustainable against the petitioner and were quashed qua the petitioner.

Issue (ii): whether an offence under Section 120-B of the Indian Penal Code, 1860 becomes a scheduled offence when the alleged conspiracy is to commit offences not otherwise included in the Schedule.

Analysis: The Schedule to the Act does not become redundant merely because conspiracy is alleged. Section 120-B is a scheduled offence only where the conspiracy alleged is to commit an offence that is itself already included in the Schedule. A conspiracy to commit a non-scheduled offence does not, by itself, enlarge the Schedule or convert every such offence into a scheduled offence. Penal provisions must be strictly construed, and the legislative choice to limit scheduled offences cannot be defeated by a broad reading of conspiracy.

Conclusion: Section 120-B of the Indian Penal Code, 1860 does not make a non-scheduled offence a scheduled offence unless the object of the conspiracy is itself a scheduled offence.

Final Conclusion: The challenge to the attachment order succeeded, and the proceedings could not be continued against the petitioner on the admitted facts and chronology.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, proceedings cannot be sustained against a bona fide purchaser whose acquisition preceded the predicate offences and who had no alleged involvement in the criminal activity, and a conspiracy provision cannot be used to treat a non-scheduled offence as scheduled unless the object of the conspiracy is itself a scheduled offence.

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