PMLA provisional attachment upheld where alternate water brands were supplied without approval and reimbursement claims suggested wrongful gain.

Provisional attachment under the Prevention of Money Laundering Act was challenged on the basis that the dispute was only contractual, that no loss was caused to the Railways, and that prior approval was unnecessary for supplying non-Rail Neer brands. The Appellate Tribunal, relying on the Delhi High Court's earlier findings, noted that the licensee was required to supply Rail Neer, alternate brands were permitted only if Rail Neer was unavailable and with prior written approval, and the alleged supply of cheaper brands with reimbursement at Rail Neer rates indicated more than a civil breach. It further rejected reliance on the absence of prosecution sanction or asserted absence of loss, finding no material of shortage or approval and treating the reimbursement claims as evidence of wrongful gain and corresponding loss. The attachment was upheld.

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Issues: Whether the provisional attachment confirmed under the Prevention of Money Laundering Act, 2002 was liable to be set aside on the ground that the dispute was merely contractual and civil in nature, that no loss was caused to the Railways, and that prior approval was not required before supplying non-Rail Neer packaged drinking water.

Analysis: The Appellate Tribunal relied on the Delhi High Court's earlier findings that the licensee was bound to supply Rail Neer, that supply of other brands was permissible only if Rail Neer was unavailable and with prior written approval, and that the alleged conduct of supplying cheaper brands while claiming reimbursement at the Rail Neer rate disclosed more than a mere contractual breach. The Tribunal also rejected the contention that absence of prosecution sanction for public servants or the asserted absence of loss to the Railways could defeat the allegations against the private appellant at this stage. It held that no material showed shortage of Rail Neer or any prior approval for alternate brands, and that the reimbursement claims supported the finding of wrongful gain and corresponding loss.

Conclusion: The attachment was upheld and the appeal failed.

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