Attachment as Equivalent Value permitted where tainted assets cannot be traced, allowing provisional attachment of untainted property.

Attachment of untraced tainted assets is permissible under the Prevention of Money Laundering Act by treating intervening or ancestral property as equivalent in value where the actual proceeds cannot be located; Section 2(1)(u) (definition of proceeds of crime) read with Section 5 authorises provisional attachment of property representing the value of proceeds, and prior acquisition or ancestral status of the property does not per se shield it from attachment if material supports equivalence; the statutory scheme permits upholding such attachments on proper evidentiary basis.

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Issues: Whether the attachment of an ancestral property as "equivalent value" under Section 5 read with Section 2(1)(u) of the Prevention of Money Laundering Act, 2002 is permissible where the actual tainted property cannot be traced and the property was not purchased by the accused from proceeds of crime.

Analysis: The adjudicatory framework permits provisional attachment of property believed to be proceeds of crime. The definition of "proceeds of crime" in Section 2(1)(u) of the Prevention of Money Laundering Act, 2002 encompasses not only property derived from criminal activity but also the value of such property and property equivalent in value when the tainted property is taken or held outside the country. Where the investigating authority is unable to locate the actual tainted property, the statute allows attachment of untainted property equivalent in value. There is no statutory exemption for ancestral or inherited property; prior acquisition does not automatically preclude attachment as equivalent value if evidence supports that the attached property represents the value equivalent of proceeds of crime. The impugned findings recorded by the Adjudicating Authority that the property represented value equivalent to proceeds of crime were considered on the material placed on record, and the appellate forum applied the statutory scheme to uphold the attachment.

Conclusion: The attachment of the subject ancestral property as equivalent value under Section 5 read with Section 2(1)(u) of the Prevention of Money Laundering Act, 2002 is permissible; the appeal is dismissed in favour of the respondent.

Ratio Decidendi: Where actual tainted property cannot be traced, Section 2(1)(u) read with Section 5 of the Prevention of Money Laundering Act, 2002 authorises attachment of property equivalent in value, and ancestral or prior acquisition of property does not by itself prevent such attachment.

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