PMLA provisional attachment of an undivided property share upheld where prima facie nexus with proceeds of crime was shown.

Under the Prevention of Money Laundering Act, provisional attachment of an undivided 50% share in residential property was sustained because the record showed a prima facie nexus between the asset and proceeds of crime arising from the scheduled offence. The tribunal held that, at the attachment stage, the inquiry is limited to prima facie linkage, and attachment of an undivided share in immovable property is permissible. Claims based on financial contributions, residence, household expenses, alleged lack of enquiry, and the argument that the matter fell only within income-tax law did not displace the statutory nexus, and the appellants failed to show that the attached interest was untainted.

---

---

Issues: (i) Whether the provisional attachment and its confirmation in respect of 50% share in the residential property were sustainable under the Prevention of Money Laundering Act, 2002; (ii) Whether the appellants' financial contributions, residence in the property, alleged lack of enquiry, and the plea that the matter lay only in the domain of income-tax law vitiated the attachment.

Issue (i): Whether the provisional attachment and its confirmation in respect of 50% share in the residential property were sustainable under the Prevention of Money Laundering Act, 2002.

Analysis: The material on record showed that the scheduled offence had led to an ECIR and that statements and documentary evidence disclosed a prima facie case of collection and conversion of demonetised currency through intermediaries into gold and diamonds, yielding illegal gain. At the stage of provisional attachment and confirmation, the statutory inquiry is confined to whether there is a prima facie nexus between the property and the proceeds of crime. The property was attached only to the extent of the share reflected in the title documents, and attachment of an undivided share in immovable property is permissible under the statutory scheme.

Conclusion: The attachment and its confirmation were held to be valid and sustainable.

Issue (ii): Whether the appellants' financial contributions, residence in the property, alleged lack of enquiry, and the plea that the matter lay only in the domain of income-tax law vitiated the attachment.

Analysis: The claimed payment of purchase consideration, loan instalments, and household expenses did not by itself confer legal ownership or displace the statutory nexus with proceeds of crime. The Act did not require recording of statements of every co-owner as a precondition for confirmation of attachment, and no material prejudice from the alleged want of enquiry was shown. The plea that the transactions concerned only unaccounted income assessable under income-tax law was rejected because the facts disclosed a process connected with laundering of proceeds of crime. The burden to establish that the attached share was untainted was not discharged.

Conclusion: The challenge to the attachment on these grounds failed.

Final Conclusion: The confirmation of provisional attachment suffered from no illegality, perversity, or procedural infirmity, and the appeals were rejected.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, provisional attachment may be confirmed on the basis of a prima facie nexus between property and proceeds of crime, including attachment of an undivided share in immovable property, and equitable claims, residence, or payments without legal title do not defeat such attachment absent proof that the attached interest is untainted.

---