PMLA provisional attachment upheld where layered routing showed property was proceeds of crime despite incomplete investigation.

Property can be provisionally attached under PMLA where material shows it is derived, directly or indirectly, from scheduled criminal activity, including through shell entities, diverted loan funds and layered routing. The Tribunal held that the wider definition of proceeds of crime covers value traceable through subsequent transactions, so the challenge to attachment failed. It also held that provisional attachment is not dependent on completion of investigation or prior filing and testing of the prosecution complaint; attachment may rest on material already in the authorised officer's possession. The confirmation of provisional attachment was therefore sustained.

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Issues: (i) Whether the property provisionally attached and confirmed against the appellant represented proceeds of crime under the Prevention of Money Laundering Act, 2002. (ii) Whether provisional attachment could be made before completion of investigation and before filing or testing of the prosecution complaint.

Issue (i): Whether the property provisionally attached and confirmed against the appellant represented proceeds of crime under the Prevention of Money Laundering Act, 2002.

Analysis: The material on record showed that the appellant, while serving in the affairs of the company, was found to have participated in the creation and use of shell entities, the diversion of loan funds, and the routing of money back to him as alleged salary, bonus, or incentives. The Tribunal held that the amount could not be viewed in isolation as ordinary remuneration because the surrounding transactions showed a layered scheme connected with the scheduled offence and the generation of proceeds of crime. It held that the statutory definition of proceeds of crime is wide and covers property derived or obtained directly or indirectly from criminal activity relating to a scheduled offence, including value traceable through subsequent routing.

Conclusion: The attachment was upheld as the property was treated as proceeds of crime and the challenge failed.

Issue (ii): Whether provisional attachment could be made before completion of investigation and before filing or testing of the prosecution complaint.

Analysis: The Tribunal held that the statute does not require completion of investigation or filing of the prosecution complaint as a precondition for provisional attachment. It noted that the statutory scheme permits attachment on the basis of material in possession of the authorised officer and that the complaint or charge-sheet remains subject to judicial scrutiny. The absence of a final order in the criminal proceedings did not negate the authority to attach property provisionally where the material justified such action.

Conclusion: The objection to provisional attachment on the ground of incomplete investigation was rejected.

Final Conclusion: The appeal was found to be without merit and the confirmation of provisional attachment was sustained.

Ratio Decidendi: Provisional attachment under the money-laundering law can be sustained on material showing that the property is proceeds of crime, and such attachment is not dependent on completion of investigation or prior filing and testing of the prosecution complaint.

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