Equivalent value attachment under proceeds of crime law upheld despite pre-offence acquisition and absence from predicate FIR

Under the Act, attachment is not limited to property directly derived from the scheduled offence; it can extend to the equivalent value of proceeds of crime where the tainted assets are unavailable. Pre-offence acquisition did not, by itself, bar attachment. The absence of the appellants' names in the predicate FIR was treated as immaterial because action may proceed against any person found in possession of proceeds of crime. On the material accepted, the claimed commercial receipts were linked to funds routed through a connected foreign entity, the appellant company was treated as a shell company, and the burden to disprove tainted origin was not discharged. The attachment and its confirmation were sustained.

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Issues: (i) Whether properties acquired before the alleged scheduled offence could still be attached as the value of proceeds of crime under the Act. (ii) Whether the absence of the appellants' names in the predicate FIR and the claim of ordinary commercial receipts defeated the attachment and confirmation order.

Issue (i): Whether properties acquired before the alleged scheduled offence could still be attached as the value of proceeds of crime under the Act.

Analysis: The statutory definition of proceeds of crime is not confined only to property directly derived from the scheduled offence. It also covers the value of such property. The attachment was upheld on the footing that, even if the attached assets were acquired earlier, they could still be proceeded against as equivalent value where the tainted assets were not available. The distinction drawn by the appellants on the basis of chronology was therefore rejected.

Conclusion: The contention that pre-offence acquisition by itself barred attachment was rejected.

Issue (ii): Whether the absence of the appellants' names in the predicate FIR and the claim of ordinary commercial receipts defeated the attachment and confirmation order.

Analysis: The absence of the appellants from the FIR was held to be immaterial because action under the Act can extend to any person in possession of proceeds of crime. On the facts accepted from the material on record, the receipts claimed to be commercial were found to be linked to funds routed through the foreign entity connected with the scheduled offence, and the appellant company was treated as a shell company through which funds were invested in properties and other assets. The burden cast on the appellants to show that the assets were not proceeds of crime was not discharged.

Conclusion: The attachment and its confirmation were sustained against the appellants.

Final Conclusion: The Tribunal found sufficient material to connect the attached assets with proceeds of crime or their equivalent value and held that the confirmation of provisional attachment did not call for interference.

Ratio Decidendi: Under the Act, attachment is maintainable not only against property directly derived from the scheduled offence but also against property of equivalent value, and the remedy is not confined to persons named in the predicate FIR if the material shows possession or use of proceeds of crime.

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