Equivalent-value attachment under PMLA upheld where tainted proceeds are untraceable and predicate investigation remains pending

Under the Prevention of Money Laundering Act, 2002, where the tainted proceeds cannot be traced or are said to have been siphoned off, the statutory definition of proceeds of crime extends to the value of such property, permitting attachment of property of equivalent value. The tribunal also noted that provisional attachment is not rendered premature merely because no charge sheet has been filed in the predicate offence, particularly where no closure report exists and the investigation remains pending. On the material indicating a money-laundering nexus, the attachment was sustained and the challenge rejected.

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Issues: (i) whether property equivalent in value can be attached under the Prevention of Money Laundering Act, 2002 when the tainted proceeds are not traced or are stated to have been siphoned off, and (ii) whether the provisional attachment and its confirmation were premature in the absence of a charge sheet or closure report in the predicate offence.

Issue (i): whether property equivalent in value can be attached under the Prevention of Money Laundering Act, 2002 when the tainted proceeds are not traced or are stated to have been siphoned off.

Analysis: The definition of proceeds of crime was read as comprising not only property derived from criminal activity relating to a scheduled offence, but also the value of such property. Where the actual tainted property cannot be traced, the statutory scheme permits attachment of property of equivalent value. The reasoning relied on the wide scope of the statutory definition and the settled position that the value limb is attracted where the proceeds are unavailable, including where they have been dissipated or routed away.

Conclusion: The equivalent-value attachment was held to be permissible and the contention against attachment was rejected.

Issue (ii): whether the provisional attachment and its confirmation were premature in the absence of a charge sheet or closure report in the predicate offence.

Analysis: The absence of a charge sheet did not by itself justify release of the attached property at that stage, particularly when no closure report had been filed and the predicate investigation was still pending. The tribunal treated the material concerning the appellant's role and the money-laundering trail as sufficient to sustain the attachment for the time being.

Conclusion: The challenge on prematurity was rejected.

Final Conclusion: The attachment of the appellant's property was sustained and the appeal failed.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, where the tainted proceeds are not available for tracing, property of equivalent value may be provisionally attached and maintained on the basis of material showing a money-laundering nexus, even while the predicate offence investigation remains pending.

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