Predicate offence and section 50 statements sustained seizure where lawful source of cash and gold was not proved.

In money-laundering proceedings, the Tribunal treated the predicate offence as continuing where the underlying FIR had been supplemented and no competent court had quashed or discharged the scheduled offence, so the ECIR and seizure were not vitiated. The alleged non-supply of reasons to believe and relied-upon material under section 8(1) was not established on the record, so the procedural challenge failed. Statements recorded under section 50, together with other reliable material, were accepted to sustain the finding where the appellant did not prove a lawful source for the seized cash and gold and the temple-donation explanation was unsupported.

---

---

Issues: (i) Whether the absence of a predicate offence or scheduled offence vitiated the ECIR and the consequent seizure proceedings; (ii) Whether the alleged non-supply of reasons to believe and relied upon documents under section 8(1) vitiated the impugned order; (iii) Whether the statements recorded under section 50 and the material relied upon were sufficient to sustain the finding against the appellant and explain the seized cash and gold.

Issue (i): Whether the absence of a predicate offence or scheduled offence vitiated the ECIR and the consequent seizure proceedings.

Analysis: The material on record showed that the initial FIR was later supplemented by the offence under section 384 IPC and, in the transferred Chhattisgarh investigation, also included offences under the Prevention of Corruption Act, 1988 and Section 420/120-B IPC. The Tribunal relied on the earlier determination that the existence of a scheduled offence is to be assessed with reference to the predicate case as it stood and that absence of discharge, acquittal, or quashing by a competent court does not erase the predicate character of the offence. On that basis, the challenge that no predicate offence survived was rejected.

Conclusion: The challenge failed; the ECIR and seizure were not vitiated for want of a predicate offence.

Issue (ii): Whether the alleged non-supply of reasons to believe and relied upon documents under section 8(1) vitiated the impugned order.

Analysis: The appellant did not place the show-cause notice and related material on record, and therefore the alleged non-disclosure could not be verified. In the absence of the foundational documents necessary to establish the alleged procedural breach, the Tribunal declined to accept the contention of non-compliance with section 8(1).

Conclusion: The procedural objection was rejected.

Issue (iii): Whether the statements recorded under section 50 and the material relied upon were sufficient to sustain the finding against the appellant and explain the seized cash and gold.

Analysis: The Tribunal accepted the statement of the associate of the main accused, which implicated the appellant in receipt of money from the syndicate, and also relied on the appellant's own statement recorded under section 50. The plea of coercion and retraction was disbelieved because no retraction letter was produced. The explanation that the seized cash represented temple donations was treated as an afterthought, unsupported by documents establishing the appellant's role or authority. The Tribunal therefore held that the appellant failed to account for the source of the seized assets.

Conclusion: The reliance on the statements and the rejection of the source-of-funds explanation were sustained against the appellant.

Final Conclusion: The order confirming seizure was upheld and the appeal was dismissed.

Ratio Decidendi: In money-laundering proceedings, where the predicate offence remains in existence and the alleged procedural lapse is not established from the record, statements recorded under section 50 and other reliable material may be used to sustain seizure or attachment if the person concerned fails to prove a lawful source of the property.

---