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Issues: (i) whether provisional attachment under Section 5(1) of the Prevention of Money Laundering Act, 2002 could be issued only after filing of a report under Section 173 of the Code of Criminal Procedure, 1973, (ii) whether the competent officer had material to form the requisite reason to believe for provisional attachment, and (iii) whether prior notice or hearing was required before passing the provisional attachment order.
Issue (i): whether provisional attachment under Section 5(1) of the Prevention of Money Laundering Act, 2002 could be issued only after filing of a report under Section 173 of the Code of Criminal Procedure, 1973
Analysis: The statutory scheme after the 2013 amendment was examined with particular reference to the omission of the earlier requirement that the person must already have been charged for a scheduled offence. The first proviso to Section 5(1) was treated as a triggering condition in the ordinary case, but not as the only jurisdictional basis for attachment. The second proviso was treated as an independent enabling provision permitting attachment where the officer has reason to believe, on the basis of material in possession, that non-attachment would frustrate proceedings under the Act.
Conclusion: No. Provisional attachment was not dependent in every case on the prior filing of a report under Section 173 of the Code of Criminal Procedure, 1973, and the challenge on this ground failed.
Issue (ii): whether the competent officer had material to form the requisite reason to believe for provisional attachment
Analysis: The record, including the FIR, statements recorded under the Act, financial material, and the contents of the provisional attachment order, was assessed to determine whether the belief of the authorised officer was founded on cogent material. The attachment was treated as a tentative and preventive measure intended to preserve property pending adjudication, and the court found that the order identified assets connected with the relevant period and the alleged proceeds of crime. The sufficiency of the material was held to support the statutory satisfaction required for issuance of the order.
Conclusion: Yes. The authorised officer had sufficient material to form the requisite reason to believe, and the provisional attachment could not be characterised as arbitrary.
Issue (iii): whether prior notice or hearing was required before passing the provisional attachment order
Analysis: The scheme of the Act was held to be preventive and emergent at the provisional attachment stage, and the statute was read as not requiring a pre-decisional hearing before attachment. Adequate opportunity was found to be available later before the Adjudicating Authority under the Act, with further appellate remedies thereafter. On that basis, the court held that the legislature did not intend a prior notice requirement at the stage of provisional attachment.
Conclusion: No. There was no breach of natural justice in issuing the provisional attachment order without prior notice or hearing.
Final Conclusion: The statutory challenge to the provisional attachment order was rejected, and the writ court's refusal to interfere was left undisturbed. The appeal was therefore unsuccessful, with the provisional attachment sustained.
Ratio Decidendi: After the 2013 amendment, provisional attachment under Section 5(1) of the Prevention of Money Laundering Act, 2002 may be sustained on the basis of a reasoned belief founded on material in possession even without a prior chargesheet under Section 173 of the Code of Criminal Procedure, 1973, and no pre-decisional hearing is required at that stage.
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