2026 (3) TMI 658 - AT - Money Laundering

Provisional Attachment under PMLA upheld where fund tracing and layering linked the property to proceeds of crime.

Whether confirmation of a provisional attachment under the Prevention of Money Laundering Act in respect of immovable property should be set aside was ... Validity of confirmation of provisional attachment of the property owned/used - acquisition of property - proceeds of crime - money laundering - funds collected from public through E-Nuggets Mobile application on an assurance of higher returns by making illicit use of accounts at Federal Bank branches in Kolkata - Scheduled offences. Provisional attachment under PMLA - acquisition of property from proceeds of crime - HELD THAT: - The Tribunal found on the material of investigation that the appellant company and its director featured in the earlier criminal inquiry and that the property was acquired within the relevant check period and by payments made during that period, indicating acquisition from proceeds of crime. The Tribunal rejected the submission that a mere leasehold or absence of asserted proprietary right by the appellant precluded attachment, noting the appellant's possession and use and the investigative findings linking the property to layering of illicit funds. On that basis the Adjudicating Authority's confirmation of the provisional attachment was held to have been made on sufficient material and did not warrant interference. [Paras 11, 14, 15] Confirmation of the provisional attachment was upheld as valid. Quashing of subsequent FIR does not annul prior PMLA proceedings where earlier FIR and investigation disclose role - Effect of the alleged quashing of the second FIR on the attachment proceedings under the Act of 2002 - HELD THAT: - The Tribunal recorded that two FIRs had been registered but that the first FIR and the resultant investigation already disclosed the role of the appellant and its director in the scheme. In view of the continued existence of the earlier FIR and the investigative findings linking the appellant to laundering, the purported quashing of the subsequent FIR did not vitiate the PMLA proceedings or the attachment which flowed from the earlier inquiry. [Paras 16] The alleged quashing of the second FIR did not invalidate the attachment proceedings; no interference was warranted on this ground. Final Conclusion: The appeal is dismissed; the Tribunal upheld the Adjudicating Authority's confirmation of the provisional attachment, finding sufficient investigative material linking the property to proceeds of crime and that quashing of a later FIR did not defeat the continuing proceedings under the Act. Issues: Whether the confirmation of the provisional attachment order made under Section 26 of the Prevention of Money Laundering Act, 2002 in respect of immovable property allegedly acquired out of proceeds of crime is liable to be set aside.Analysis: The Tribunal examined the investigative findings linking the impugned property to routing of funds through numerous bank accounts identified in the money laundering investigation, including admissions and account transaction analysis showing initial payments and diversion of investor funds into accounts associated with the accused and the company. The Tribunal considered the timing of acquisition and payments in relation to the statutory check period, the use of the company as a vehicle for layering proceeds, and the relevance of the first registered FIR and ensuing ECIR and chargesheet. The Tribunal rejected the contention that quashing of a later FIR (alleged) or a leasehold title alone negated the investigative material establishing that the property was acquired from proceeds of crime. The Tribunal also noted that the appellant raised no other substantive legal or factual issues.Conclusion: The Tribunal held that the confirmation of the provisional attachment under Section 26 of the Prevention of Money Laundering Act, 2002 is justified and declined to interfere; the appeal is dismissed.