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Issues: (i) Whether the properties standing in the names of the appellants were liable to provisional attachment under the Prevention of Money Laundering Act, 2002 on the footing that they were acquired from the proceeds of crime. (ii) Whether the attachment could be sustained where the appellants claimed that the properties were purchased from salary, commission, or independent sources and where some appellants were not separately arraigned as accused.
Issue (i): Whether the properties standing in the names of the appellants were liable to provisional attachment under the Prevention of Money Laundering Act, 2002 on the footing that they were acquired from the proceeds of crime.
Analysis: The appellants were found to have played an active role in promoting and canvassing the illegal investment schemes floated by the company and in collecting public deposits. Their statements and the surrounding material were relied upon to conclude that the amounts earned by them were not legitimate earnings but were derived from and connected with the criminal activity. The properties were acquired during the relevant period when the illegal schemes were operating, and the Tribunal accepted the finding that the assets were purchased out of the proceeds of crime rather than from lawful income.
Conclusion: The properties were validly treated as proceeds of crime and were liable to provisional attachment.
Issue (ii): Whether the attachment could be sustained where the appellants claimed that the properties were purchased from salary, commission, or independent sources and where some appellants were not separately arraigned as accused.
Analysis: The Tribunal held that the plea of salary or commission did not assist the appellants because the earnings themselves were generated through participation in the unlawful scheme. As regards the wives, the Tribunal found that no independent source of income was disclosed and the statements recorded indicated that the funds came from their husbands' unlawful earnings. The absence of a separate criminal array was held to be immaterial where the person was found to be a recipient of proceeds of crime.
Conclusion: The challenge based on alleged lawful income and non-array as accused was rejected.
Final Conclusion: The attachment orders were upheld and the appeals failed on merits, leaving no ground for interference.
Ratio Decidendi: Assets acquired from earnings generated by participation in an unlawful scheme may be treated as proceeds of crime and attached under the money-laundering law, and a recipient of such proceeds need not be separately arraigned as an accused for attachment to stand.
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