2025 (12) TMI 1736 - HC - Money Laundering

Attached real estate bought via alleged money-laundering-'proceeds of crime' under PMLA-attachment upheld; appeal dismissed.

Whether the attached properties constituted 'proceeds of crime' liable to attachment under the PMLA was the dominant issue. The HC held that the record ... Money Laundering - attachment of property - proceeds of crime or not - criminal conspiracy, cheating, dishonestly inducing delivery of property, forgery of valuable security, will, etc. using as genuine a forged document or electronic record and criminal misconduct by a public servant - HELD THAT:- It appears from the perusal of the record along with impugned order that the attached properties of this case are proceeds of crime and deliberate attempt to launder the tainted money. The accused persons including the present appellant have given colorable statements regarding source of income and payment of consideration amount. They have also admitted to patch up the matter by false and fabricated plea of loan agreements. Even the formation of Nand Lal HUF by Dr. Pradeep Kumar and his brother Rajendra Kumar under dormant role and ignorance of Rajendra Kumar and direct nexus of Dr. Pradeep Kumar with the present appellant in appointing him as power of attorney holder to purchase properties and statements of accused persons under Section 164 Cr. P.C. including the present appellant sufficient to raise a valid inference showing the attached properties as proceeds of crime. It further appears that the adjudicating authority as well as the appellate tribunal have discussed very minute details in the light of contentions and materials relied upon by the appellant and recorded concurrent findings of fact. There appears no valid reason to interfere with the impugned orders on the basis of contentions raised on behalf of the appellant as all of the contentions have already been considered and well-reasoned orders have been passed. There are no merits in this appeal and no error of law in the impugned order calling for any interference, which stands dismissed. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether the confirmed attachment of the specified immovable property as 'proceeds of crime' under the PMLA was sustainable on the material considered by the Adjudicating Authority and the Appellate Tribunal. (ii) Whether the appellant's claim that he was required to explain only his alleged 50% share in the consideration, and that his disclosed income/returns sufficiently established a lawful source, warranted setting aside the concurrent findings confirming attachment. (iii) Whether the impugned appellate order suffered from any error of law justifying interference under Section 42 of the PMLA in the face of concurrent factual findings. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i) & (ii): Sustainability of attachment as 'proceeds of crime' and adequacy of appellant's explanation of source (including 50% share contention) Legal framework (as discussed by the Court): The Court proceeded on the basis that the attachment and its confirmation were undertaken under the PMLA mechanism (including attachment, adjudication, and appellate scrutiny), and examined whether the impugned orders, on the record, correctly treated the property as 'proceeds of crime' and part of a laundering arrangement. Interpretation and reasoning: On appraisal of the record and the impugned orders, the Court found that the attached property was supported by material indicating it was derived from tainted funds and that there was a deliberate attempt to launder such money. The Court accepted the inference drawn by the authorities that the accused persons, including the appellant, gave 'colorable statements' concerning the source of funds and the payment of consideration, and that an attempt was made to provide a false appearance of legitimacy through loan-related pleas described as 'false and fabricated.' The Court treated as materially supportive: the manner of formation and operation of the HUF arrangement (including the asserted dormant role/ignorance of its karta), the nexus between the principal accused and the appellant (including appointment as power-of-attorney holder for property purchases), and statements of accused persons recorded under Section 164 Cr.P.C. as sufficient to draw an inference that the property was linked to proceeds of crime. In light of this evidentiary picture, the Court did not accept that the appellant's '50% share' argument and documents relied upon by him displaced the conclusion of taint; it held that such contentions had already been examined in detail by the authorities and did not undermine the attachment. Conclusions: The Court upheld the determination that the attached property constituted proceeds of crime and that the appellant's explanations regarding source of funds (including limitation to a 50% share and reliance on returns/records) did not warrant reversal of the attachment as confirmed by the Adjudicating Authority and the Appellate Tribunal. Issue (iii): Interference under Section 42 PMLA-existence of error of law despite concurrent findings Legal framework (as discussed by the Court): The appeal was considered under Section 42 of the PMLA, requiring the Court to examine whether the impugned appellate order disclosed an error of law warranting interference. Interpretation and reasoning: The Court emphasized that both the Adjudicating Authority and the Appellate Tribunal had considered the appellant's materials and contentions in 'minute details' and recorded concurrent findings of fact supporting attachment. The Court found 'no valid reason' to interfere because the appellant's arguments had already been dealt with by 'well-reasoned' orders, and the record supported the inference of laundering and tainted origin. The Court expressly concluded that it found no error of law in the impugned order calling for interference. Conclusions: The Court declined to interfere under Section 42 PMLA, upheld the concurrent findings confirming attachment, and dismissed the appeal.