PMLA attachment requires traceable nexus with proceeds of crime; Goa land and LLP properties were released, share attachments upheld.

Provisional attachment under PMLA depends on a traceable nexus between the attached asset and proceeds of crime, or their equivalent value. The Tribunal held that the South Goa land parcel was not shown to have been acquired with tainted funds, since it pre-dated the alleged diversion and was paid for from independent sources; its attachment was set aside, while the bank balance attachment was not wholly disturbed. It upheld attachment of the shares and related properties of Authentic Finance Pvt. Ltd. and KJV Estates Pvt. Ltd., finding a money trail and rejecting objections based on the timing of scheduled offences. The attachment of the 5 LLP entities' properties was set aside because no reliable trail linked their assets to proceeds of crime.

---

---

Issues: (i) Whether the provisional attachment of the South Goa land parcel and connected bank balances of Betul Hospitality Parks Pvt. Ltd. was sustainable on the footing that the property represented proceeds of crime. (ii) Whether the attachment of the shares and other properties of Authentic Finance Pvt. Ltd., KJV Estates Pvt. Ltd. and the 5 LLP entities was justified on the basis of the alleged receipt and layering of proceeds of crime.

Issue (i): Whether the provisional attachment of the South Goa land parcel and connected bank balances of Betul Hospitality Parks Pvt. Ltd. was sustainable on the footing that the property represented proceeds of crime.

Analysis: The attachment could stand only if the property itself, or the traced value represented by it, had a nexus with the tainted funds. The record showed that the Goa land was acquired before the alleged diversion of homebuyers' funds commenced, and the lease premium had been paid from independent funds mobilised through a third party. The Tribunal also noted that the money from Unitech moved to other entities under the stated arrangements, but not to Betul Hospitality Parks Pvt. Ltd. for acquisition of the land. On that footing, the land parcel could not be treated as property derived from proceeds of crime. As to the bank balances, the Tribunal did not find sufficient basis to interfere completely and confined its interference only to the land parcel.

Conclusion: The provisional attachment of the Goa land parcel was unsustainable and was set aside, while the bank balance attachment was not wholly interfered with.

Issue (ii): Whether the attachment of the shares and other properties of Authentic Finance Pvt. Ltd., KJV Estates Pvt. Ltd. and the 5 LLP entities was justified on the basis of the alleged receipt and layering of proceeds of crime.

Analysis: The Tribunal accepted that the investigation established a money trail from Unitech to Authentic Finance Pvt. Ltd. and KJV Estates Pvt. Ltd. in relation to the share arrangements and related transactions, and held that the non-fulfilment of the agreed terms did not negate the receipt of tainted funds. The objection based on the date of inclusion of IPC offences in the PMLA Schedule was rejected because the relevant inquiry was the laundering process and projection of tainted money as untainted, not the date of the predicate acts. However, for the LLP entities, the Tribunal found that they came into existence much later than the relevant diversion period and that no reliable trail linked their assets to proceeds of crime. It further held that, if at all, only the corresponding share interests could have been attached, not the assets of the LLPs themselves.

Conclusion: The attachment of the shares and related properties of Authentic Finance Pvt. Ltd. and KJV Estates Pvt. Ltd. was upheld, while the attachment of the properties of the 5 LLP entities was set aside.

Final Conclusion: The appeals succeeded only to the limited extent of the Goa land parcel and the LLP properties, and failed in relation to the remaining attachments, leaving the impugned orders partly undisturbed and partly interfered with.

Ratio Decidendi: In a PMLA attachment challenge, the decisive test is whether the attached property has a traceable nexus with proceeds of crime or their equivalent value, and the relevant inquiry focuses on the laundering and projection of tainted funds rather than the date of the underlying predicate offence.

---