PMLA attachment fails without proof of nexus to scheduled offence; recorded court admissions cannot be contradicted in appeal

A party cannot, in an appeal against the same judgment, contradict its own recorded submissions, admissions or concessions; the proper remedy is to seek correction, clarification or review before the court that made the record, and the recorded statements remained binding here. 'Proceeds of crime' under the PMLA require property derived or obtained from criminal activity relating to a scheduled offence; money advanced through banking channels under a commercial land-acquisition arrangement, reflected in accounts and found to be a lawful business transaction, did not satisfy that test. In the absence of a proven nexus with criminal activity, the PMLA attachment could not stand, and the attached properties were directed to be released subject to the stated interest apportionment.

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Issues: (i) Whether a party can, in an appeal against the same judgment, challenge the recording of its own submissions, stand, admissions or concessions as reflected in that judgment; (ii) Whether Rs. 141.50 crores advanced by SPCL to the Nilesh Thakur Group could be treated as 'proceeds of crime' under the PMLA.

Issue (i): Whether a party can, in an appeal against the same judgment, challenge the recording of its own submissions, stand, admissions or concessions as reflected in that judgment?

Analysis: Statements of fact as to what transpired in court, when recorded in a judicial order, are conclusive unless corrected before the very court that made the record. The proper course for a party alleging wrong recording of concessions or submissions is to seek clarification, correction or review before that court. A party cannot, in an appeal against the judgment itself, contradict the record through later assertions, especially when no corrective steps were taken and the recorded statements continue to form part of the order.

Conclusion: The challenge to the recorded admissions and concessions was not entertained in the appeal; the parties remained bound by the record.

Issue (ii): Whether Rs. 141.50 crores advanced by SPCL to the Nilesh Thakur Group could be treated as 'proceeds of crime' under the PMLA.

Analysis: 'Proceeds of crime' under the PMLA requires property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence. The Court found that the money was advanced through banking channels under a commercial agreement for land acquisition, was reflected in SPCL's accounts, and had already been judicially found by income-tax authorities to be a lawful and valid business transaction. No material showed that the funds were generated from criminal activity or had any nexus with the discharge of public duties by the public servant concerned. The Court also noted that the Prevention of Corruption Act offence became a scheduled offence only from 1 June 2009, whereas a substantial part of the transfers had occurred earlier. In the absence of the essential ingredients of a scheduled offence and a causal link to criminal activity, the attachment under PMLA could not be sustained.

Conclusion: The amount of Rs. 141.50 crores was not 'proceeds of crime' and the PMLA attachment could not be sustained.

Final Conclusion: The appeals were held to be without merit, the impugned tribunal order was affirmed, and the attached properties were directed to be released, with modification only as to the apportionment of accrued interest on the deposited sums.

Ratio Decidendi: For property to fall within 'proceeds of crime' under the PMLA, there must be a proven nexus between the property and criminal activity relating to a scheduled offence; absent that nexus, and absent a sustainable basis to dispute the recorded court concessions, attachment cannot stand.

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