PMLA attachment can reach equivalent-value assets and third-party property where laundering trail and proceeds of crime are shown.

Provisional attachment under the PMLA depends on recorded reasons to believe, supported by material showing possession of proceeds of crime and a risk of concealment or dissipation; on the facts, bank layering, forged accounts, cash deposits, RTGS rotations and witness statements were treated as sufficient. The Enforcement Directorate is not required to re-investigate the predicate offence and may confine itself to identifying the laundering trail and connected properties. Attachment may also extend to equivalent-value property where the tainted asset is not traceable, including assets acquired before the scheduled offence, and to property held by persons not named as accused if it represents proceeds of crime or is connected with them.

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Issues: (i) whether the Enforcement Directorate had reasons to believe for passing the provisional attachment order and the Adjudicating Authority had sufficient basis to issue the show-cause notice; (ii) whether the Enforcement Directorate was required to conduct a separate investigation into the predicate offence or could confine itself to the offence of money laundering; (iii) whether properties purchased before the commission of the scheduled offence could nevertheless be attached as value thereof; and (iv) whether the properties of appellants who were not accused in the predicate offence could be attached.

Issue (i): whether the Enforcement Directorate had reasons to believe for passing the provisional attachment order and the Adjudicating Authority had sufficient basis to issue the show-cause notice.

Analysis: The statutory precondition for provisional attachment is the existence of reason to believe, based on material in possession, that a person is in possession of proceeds of crime and that such proceeds are likely to be concealed, transferred, or otherwise dealt with so as to frustrate confiscation. The record disclosed multiple bank accounts opened through forged documents, layered transactions, cash deposits, RTGS rotations, and witness statements supporting laundering activity. The complaint and material placed before the Adjudicating Authority were also found sufficient for issuance of notice.

Conclusion: The issue was decided against the appellants and in favour of the respondent.

Issue (ii): whether the Enforcement Directorate was required to conduct a separate investigation into the predicate offence or could confine itself to the offence of money laundering.

Analysis: The predicate offence remains for the police or other competent agency to investigate. The Enforcement Directorate is not a supervisory authority over that investigation and is not required to re-investigate the scheduled offence. Its role is confined to identifying prima facie material of the predicate offence, the quantum of proceeds of crime, the laundering trail, the layering or dissipation of such proceeds, and the connection of attached properties with the laundering process.

Conclusion: The issue was decided against the appellants and in favour of the respondent.

Issue (iii): whether properties purchased before the commission of the scheduled offence could nevertheless be attached as value thereof.

Analysis: The definition of proceeds of crime includes not only property derived from criminal activity but also the value of such property. Where the actual tainted property is not traceable or has been siphoned off, attachment may extend to property of equivalent value. On the facts, the laundered proceeds had been diverted and layered through multiple entities, justifying attachment of equivalent-value properties even if some assets were acquired earlier.

Conclusion: The issue was decided against the appellants and in favour of the respondent.

Issue (iv): whether the properties of appellants who were not accused in the predicate offence could be attached.

Analysis: The attachment power is not confined to persons named as accused in the scheduled offence. It extends to any person in possession of or involved with proceeds of crime. The statutory scheme is aimed at reaching such proceeds irrespective of the name in which they are held, subject to the person being connected with the proceeds of crime.

Conclusion: The issue was decided against the appellants and in favour of the respondent.

Final Conclusion: The attachment and confirmation order were sustained, and the appeals failed on all substantive issues.

Ratio Decidendi: Under the Prevention of Money-Laundering Act, attachment may be sustained on the basis of recorded reason to believe and material showing laundering activity, and it may extend to equivalent-value property and to property held by persons who are not accused in the predicate offence if such property represents or is connected with proceeds of crime.

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