Provisional attachment under money laundering law upheld where recorded reasons showed likely frustration of confiscation and statutory valuation controlled.

Provisional attachment under the Prevention of Money Laundering Act was upheld because the recorded reasons showed a reasonable apprehension that the persons concerned could conceal, transfer or otherwise deal with the properties so as to frustrate confiscation; the use of "likely" was treated as sufficient to support that apprehension. The challenge that the attachment was excessive also failed because the Act requires valuation under the statutory definition of "value", namely fair market value on the date of acquisition or possession, and not a substituted current-market method. The attachment was therefore sustained on the applicable statutory basis.

---

---

Issues: (i) whether provisional attachment under the second proviso to Section 5(1) of the Prevention of Money Laundering Act, 2002 was invalid for want of recorded apprehension that the appellants would conceal, transfer or otherwise deal with the properties so as to frustrate confiscation; and (ii) whether the attachment was unsustainable because the value of the attached properties exceeded the alleged proceeds of crime and was assessed on an impermissible basis.

Issue (i): whether provisional attachment under the second proviso to Section 5(1) of the Prevention of Money Laundering Act, 2002 was invalid for want of recorded apprehension that the appellants would conceal, transfer or otherwise deal with the properties so as to frustrate confiscation.

Analysis: Section 5(1) permits provisional attachment when the authority has reason to believe, recorded in writing, that proceeds of crime are likely to be concealed, transferred or dealt with in a manner that may frustrate confiscation. The second proviso specifically permits immediate attachment where non-attachment is likely to frustrate proceedings under the Act. The recorded reasons referred not only to one individual but also to the overall conduct of the persons concerned, including concealment of material information and a likelihood of disposal of the immovable properties liable to be attached. The use of the expression "likely" was treated as sufficient to found apprehension without waiting for actual alienation.

Conclusion: The attachment was validly supported by recorded reasons to believe, and the challenge on this ground failed.

Issue (ii): whether the attachment was unsustainable because the value of the attached properties exceeded the alleged proceeds of crime and was assessed on an impermissible basis.

Analysis: The definition of "value" in Section 2(1)(zb) of the Act means the fair market value of the property on the date of acquisition, or if that date cannot be determined, on the date of possession. The appellants sought to apply a different valuation basis through an independent valuer and to compare the attachment with the quantum of proceeds of crime received by them. The Tribunal held that the statute does not permit substitution of the legislative definition by a current market valuation standard, and that the appellants did not show any provision authorising a contrary valuation method. On the facts, the value taken by the respondents was also found to be below the proceeds of crime in the appellants' hands.

Conclusion: The valuation challenge was rejected, and the attachment was not disproportionate on the statutory basis applicable.

Final Conclusion: The appeals were devoid of merit and the provisional attachment, as confirmed by the Adjudicating Authority, was sustained.

Ratio Decidendi: Under Section 5(1) of the Prevention of Money Laundering Act, 2002, provisional attachment is justified on a recorded and reasonable apprehension of likely concealment, transfer or dealing with property to frustrate confiscation, and the statutory definition of "value" must be applied as enacted without judicially substituting a different valuation standard.

---