Salary, booking refund, and advance forfeiture payments challenged as "proceeds of crime"; provisional attachment set aside on evidence

Whether the appellant was a recipient of "proceeds of crime" so as to justify provisional attachment was the dominant issue. The Tribunal held that salary received from an employer could not be treated as proceeds of crime where the appellant produced an appointment order and other documentary material, and mere oral assertions could not override such evidence; consequently, that limb of alleged tainted receipt failed. It further held that the alleged receipt of a huge amount from another company was unsupported by contemporaneous banking records and was credibly explained as refund on cancellation of a booking, so it could not be treated as proceeds of crime; that allegation failed. It also held that amounts received as advance forfeiture were supported by an agreement and income-tax returns evidencing tax payment, which respondents ignored; that allegation failed. The provisional attachment and its confirmation were set aside and the appeal was allowed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the appellant's property could be validly attached under the Act of 2002 on the allegation that she was a recipient of "proceeds of crime", despite not being named as an accused in the FIRs or the ECIR.

(ii) Whether the specific monetary receipts relied upon by the respondents (salary from a group company; refund amounts received from a real infrastructure company; and advance amounts received under an agreement to sell from an associate company) were conclusively established, on the record, to be "proceeds of crime" or whether the appellant had disclosed legitimate sources supported by documentary evidence, thereby defeating the basis for attachment and confirmation.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Attachment of property of a person not named as an accused

Legal framework (as discussed by the Tribunal): The Tribunal considered the contention that absence of the appellant's name in the FIRs/ECIR prevents attachment, and held that for provisional attachment it is not necessary that proceeds should be in the hands of the accused; it can be in the hands of any person.

Interpretation and reasoning: The Tribunal rejected the proposition that non-implication as an accused is, by itself, a ground to invalidate attachment, and treated the decisive inquiry as whether the appellant was in fact a recipient of proceeds of crime, or could disclose a legitimate source for the amounts relied upon for attachment.

Conclusion: Non-naming of the appellant as an accused did not, by itself, bar attachment; the legality of attachment depended on proof that the relevant amounts in her hands were proceeds of crime.

Issue (ii): Whether the alleged receipts constituted proceeds of crime or were explained by documentary evidence

Legal framework (as applied in reasoning): The Tribunal proceeded on the premise that if the person discloses the source and is not a recipient of proceeds of crime, the provisional attachment cannot be sustained. It evaluated the evidentiary worth of documentary material (bank statements, income-tax scrutiny/assessment records, appointment order, agreement to sell, and tax disclosures) against the respondents' reliance on oral assertions.

Interpretation and reasoning (salary receipts): The Tribunal found the appellant produced documentary records showing salary credited over time (not as a lump sum), corresponding TDS deductions, income-tax scrutiny/assessment acceptance for the relevant years (including scrutiny under section 143 and block assessment under section 153), and an appointment order. The respondents relied mainly on a statement of an officer claiming he had not seen the appellant working during 2010-2016 and treated the salary as layering. The Tribunal held that documentary evidence could not be ignored in favour of such oral evidence, and concluded the salary receipts could not be treated as proceeds of crime.

Interpretation and reasoning (refunds from real infrastructure company): The Tribunal accepted the appellant's explanation, supported by bank statements, that she paid amounts for booking a villa (including a bank loan disbursal and other payments through banking channels) and, upon cancellation, received refunds in instalments. The Tribunal held the respondents wrongly characterized these refunds as proceeds of crime while ignoring the loan and transaction documents, and treated the receipts as return of booking money rather than illicit proceeds.

Interpretation and reasoning (advance under agreement to sell): The Tribunal accepted that the appellant received two RTGS payments totalling 50 lakhs as advance under an agreement to sell, with a contractual stipulation that failure to pay the balance within two years would result in forfeiture. The Tribunal further noted the appellant's tax return reflected tax paid on the forfeited advance amount, and held that the respondents ignored the agreement and tax disclosure while treating the receipts as proceeds of crime.

Conclusions: On all three components relied upon as "proceeds of crime", the Tribunal held the respondents' inference was contrary to documentary evidence. Since the appellant disclosed the sources and the amounts were not established as proceeds of crime, the provisional attachment and its confirmation were unsustainable; accordingly, both the provisional attachment order and the confirming order were set aside and the appeal was allowed.

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