Money-laundering as a continuing offence supports attachment of proceeds of crime even against non-accused holders of property.
Money-laundering was treated as an independent and continuing offence, so liability could arise where proceeds of crime were dealt with as untainted property after the statutory framework covered the conduct; the objection based on the predicate offences not being scheduled at the time was rejected. Provisional attachment was held to extend to property held by persons not named as accused in the scheduled offence or complaint, if the property represented proceeds of crime and was connected with concealment, possession, use, acquisition, or projection of such proceeds. The first appellant also failed to prove a lawful source for the purchase and later intra-family transfer, so the attachment was sustained.
Issues: (i) Whether proceedings under the Prevention of Money Laundering Act, 2002 were inapplicable because the scheduled offences were not in the Schedule at the time of their commission; (ii) Whether the property could be attached even though the appellants in whose hands it stood were not accused in the scheduled offence or the prosecution complaint; (iii) Whether the first appellant established a lawful source for the purchase and later transfer of the attached property.
Issue (i): Whether proceedings under the Prevention of Money Laundering Act, 2002 were inapplicable because the scheduled offences were not in the Schedule at the time of their commission?
Analysis: The relevant consideration was held to be the date on which the property generated from criminal activity was dealt with as untainted property, not the date of the predicate offence alone. Money-laundering was treated as an independent and continuing offence, and liability could arise where a person continued to conceal, possess, use, acquire, or project proceeds of crime as untainted property after the property had become proceeds of crime and after the offence had been notified or the statutory framework had been amended.
Conclusion: The objection was rejected and the issue was decided against the appellants.
Issue (ii): Whether the property could be attached even though the appellants in whose hands it stood were not accused in the scheduled offence or the prosecution complaint?
Analysis: It was held that provisional attachment under the money-laundering law is not confined to persons arrayed as accused in the scheduled offence. Property can be attached if it represents proceeds of crime and is held by a person who is involved in any process or activity connected with such proceeds, even if that person is not named as an accused in the predicate case or in the money-laundering complaint.
Conclusion: The property was held liable to attachment notwithstanding the non-accused status of the relevant appellants, and the issue was decided against the appellants.
Issue (iii): Whether the first appellant established a lawful source for the purchase and later transfer of the attached property?
Analysis: The explanation of independent lawful funds was found unconvincing. The financial records were treated as incomplete and insufficient to establish the source of the purchase money, the repayment of the housing loan, or the legitimacy of the later intra-family transfers. The transactions were treated as part of a coordinated financial arrangement and the later transfer and gift were viewed as structured steps to keep the property beyond the reach of attachment.
Conclusion: The first appellant failed to prove a lawful source for the property, and the issue was decided against the appellants.
Final Conclusion: The attachment was sustained and the appeals were dismissed because the attached property was treated as property connected with proceeds of crime and not shown to be derived from lawful funds.
Ratio Decidendi: Money-laundering is an independent and continuing offence, and property may be provisionally attached if it represents proceeds of crime and is held or dealt with by any person involved in concealing, possessing, using, acquiring, or projecting such proceeds as untainted property, even if that person is not an accused in the scheduled offence.