Proceeds of crime and property of equivalent value: untraceable illicit funds justify provisional attachment, appeal dismissed.

Proceeds of crime untraceability permits attachment of property of equivalent value where accused cannot substantiate a lawful source. The tribunal found absence of loan documentation and bank records, and admission of non-repayment, shifting the evidentiary burden onto the appellant; consequence: provisional attachment and confirmation of the impugned order. The decision treats third-party bona fide interest and statements under procedural provisions as insufficient where proceeds are not traceable, and endorses precedent that property acquired prior to the offence may be attached if illicit proceeds cannot be located. Appeal dismissed on the ground that no tenable source for the purchase was disclosed.

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Issues: (i) Whether immovable property purchased prior to the predicate offence can be treated as proceeds of crime or be subject to attachment; (ii) Whether the appellant discharged the burden to prove the lawful source of funds for purchase of the attached property; (iii) Whether provisional attachment of property in the name of the appellant can be sustained for alleged criminal acts of his son.

Issue (i): Whether immovable property purchased prior to the predicate offence can be treated as proceeds of crime or be subject to attachment.

Analysis: The definition of "proceeds of crime" in Section 2(1)(u) contains multiple limbs, including property derived or obtained directly or indirectly from criminal activity and the value of any such property to permit attachment of property of equivalent value where actual proceeds are not traceable. Judicial precedents cited establish that properties acquired prior to the commission of the scheduled offence may be attached as property of equivalent value when the tainted proceeds cannot be located.

Conclusion: Property purchased prior to the predicate offence is not a direct proceed of crime but can be attached as property of equivalent value where proceeds of crime are not traceable.

Issue (ii): Whether the appellant discharged the burden to prove the lawful source of funds for purchase of the attached property.

Analysis: Investigation summoned the alleged lenders and sought documents and bank records; none of the alleged lenders appeared and the appellant did not produce loan documents or bank evidence of repayment. Section 24 places the evidentiary burden on the person against whom attachment proceedings are instituted to prove the lawful source once the authority establishes a prima facie case.

Conclusion: The appellant failed to discharge the burden under Section 24 to prove lawful source of funds; therefore the attachment was sustainable on that ground.

Issue (iii): Whether provisional attachment of property in the name of the appellant can be sustained for alleged criminal acts of his son.

Analysis: Evidence on record linked the appellant's son to the predicate offence and showed the son as recipient of proceeds; statements indicated the son's involvement in initiating purchase though consideration was paid by the appellant. In the absence of credible proof of independent lawful source for the appellant's property and given non-traceability of proceeds, provisional attachment of property in appellant's name as equivalent value was permissible.

Conclusion: Provisional attachment of the appellant's property in consequence of the son's alleged criminality is sustainable as property of equivalent value where the appellant failed to establish a lawful source.

Final Conclusion: The appeal is dismissed and the Adjudicating Authority's confirmation of the provisional attachment is upheld, with the property characterized as attachable for equivalent value rather than direct proceeds of the crime.

Ratio Decidendi: Under Section 2(1)(u) of the Prevention of Money Laundering Act, 2002, the expression "proceeds of crime" includes property directly or indirectly derived from scheduled offences and also the value of any such property, permitting attachment of property of equivalent value when tainted proceeds are not traceable; once a prima facie case is made, Section 24 requires the affected person to prove lawful source, failing which provisional attachment may be confirmed.

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