PMLA attachment can stand without re-investigating the predicate offence when assets appear linked to proceeds of crime.

In proceedings under the Prevention of Money Laundering Act, the Enforcement Directorate is not required to re-investigate the predicate offence, which remains within the domain of the police or CBI. Its enquiry is limited to whether there is prima facie material of the scheduled offence, whether proceeds of crime exist, whether they are laundered or likely to be laundered, and whether the attached property can be linked to those proceeds. Where assets appear to have been acquired directly or indirectly from proceeds of crime, the person concerned must explain the lawful source of acquisition. On the facts, the Tribunal found a sufficient link between the appellant's properties and the alleged criminal activity, and upheld the attachment.

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Issues: Whether the confirmation of attachment of the appellant's movable properties under the Prevention of Money Laundering Act, 2002 was liable to be set aside on the grounds that the Enforcement Directorate had not independently investigated the predicate offence, the appellant's explanation of funds was ignored, and the proceedings were contrary to natural justice.

Analysis: The appeal turned on the scope of enquiry under the Prevention of Money Laundering Act, 2002. The Tribunal held that the Enforcement Directorate is not required to re-investigate the scheduled offence, which remains for the police or CBI, and that its enquiry is confined to whether there is prima facie incriminating material for the scheduled offence, whether proceeds of crime have been generated, whether such proceeds are laundered or likely to be laundered, and whether the attached property can be linked to such proceeds. The Tribunal further held that where the material indicates that a person is in possession of assets acquired directly or indirectly from proceeds of crime, the burden lies on that person to explain the source of acquisition. It accepted the finding that the appellant's properties were sufficiently linked to the alleged criminal activity and that non-quantification of the exact proceeds was not fatal on the facts of the case.

Conclusion: The challenge to the attachment failed and the confirmation order was upheld in favour of the Revenue.

Ratio Decidendi: In proceedings under the Prevention of Money Laundering Act, 2002, the Enforcement Directorate need not re-investigate the predicate offence, and once material shows prima facie involvement and possession of property apparently derived from proceeds of crime, the burden shifts to the person concerned to explain the lawful source of the assets.

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