Proceeds of crime definition and valuation guide attachment of equivalent property; pandemic limitation exclusion preserves 180 day outer limit compliance.

The text addresses whether attached properties qualify as 'proceeds of crime' or property equivalent in value and whether confirmation beyond 180 days was invalid. It applies the statutory two limb definition permitting attachment of property derived from scheduled offences or property of equivalent value when tainted assets are untraceable, uses fair market value on the date of acquisition for valuation, and finds assessed proceeds matched the provisional attachment after legitimate payments. It also applies the Covid limitation exclusion for the period 15.03.2020-28.02.2022 to treat the 180 day outer time limit as complied with, sustaining the attachment and confirmation.

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Issues: (i) Whether the properties provisionally attached and confirmed are proceeds of crime or property equivalent in value such that confirmation of provisional attachment is sustainable; (ii) Whether the Adjudicating Authority's confirmation of the provisional attachment beyond 180 days is invalid by reason of Section 5(3) of the Prevention of Money Laundering Act, 2002.

Issue (i): Whether the impugned provisional attachment and its confirmation can be sustained by treating the attached properties as proceeds of crime or as property equivalent in value under the definition of "proceeds of crime".

Analysis: The definition of "proceeds of crime" contains distinct limbs covering (a) property derived or obtained directly or indirectly from scheduled offences, and (b) the value of any such property where the tainted property is not traceable (allowing attachment of property of equivalent value). The statutory language and authoritative decisions interpreting the definition permit attachment of property of equivalent value when proceeds are siphoned off or not traceable. Evidence tracing funds received by intermediary entities to the scheduled offence, contemporaneous payments to the appellant, farmers' statements disputing bona fides of transfers, bank remittances into the appellant's account, and the respondent's assessment of utilization and value were applied to determine the extent of proceeds in the appellant's hands. The valuation principle requires using fair market value on date of acquisition (Section 2(zb)), not current market value. The provisional attachment amount was not in excess of the assessed proceeds after accounting for legitimate payments to sellers.

Conclusion: The attachment and confirmation as to the properties are sustained; conclusion is in favour of the Respondent.

Issue (ii): Whether confirmation of the provisional attachment order dated 03.06.2021 by the Adjudicating Authority on 08.02.2022 was rendered invalid for being beyond the 180-day period prescribed by Section 5(3) of the Act.

Analysis: The period from 15.03.2020 to 28.02.2022 has been judicially excluded for purposes of limitation and certain prescribed outer time limits by binding Supreme Court orders addressing the Covid-19 pandemic. The exclusion applies where a statutory time frame effectively operates as an outer limit for termination of proceedings. Section 5(3) prescribes cessation of provisional attachment after expiry of 180 days and functions as such an outer limit. Applying the exclusion for the Covid period yields that the confirmation fell within the permitted 180-day computation.

Conclusion: The confirmation order is not invalid on the ground of delay under Section 5(3); conclusion is in favour of the Respondent.

Final Conclusion: The appeal is dismissed; the provisional attachment and its confirmation are upheld and the Adjudicating Authority's order remains operative.

Ratio Decidendi: The definition of "proceeds of crime" under the Prevention of Money Laundering Act, 2002 comprises (i) property derived or obtained directly or indirectly from scheduled offences and (ii) the value of any such property permitting attachment of property equivalent in value when tainted assets are not traceable; valuation uses fair market value on date of acquisition; and the Covid-19 exclusion of limitation period (15.03.2020-28.02.2022) applies in computing statutory outer time limits such as the 180-day period in Section 5(3).

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