Proceeds of crime and unexplained funds can justify attachment of demat shares under anti-money laundering law.

Demat shares purchased from unexplained funds received from an entity linked to laundering were treated as property traceable to proceeds of crime. The Tribunal found that the appellant gave no credible lawful explanation for receipt or use of the funds, and that the claimed medical purpose was unsupported because the money was instead used to buy shares of the same company, with part of the shares later sold. On those facts, attachment was justified under the money-laundering regime and no interference was warranted.

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Issues: Whether the attachment of the appellant's demat shares, purchased from funds received from the entity alleged to be involved in laundering proceeds of crime, was liable to be interfered with.

Analysis: The Tribunal found that the underlying company was involved in large-scale diversion of funds through sham transactions and that the appellant, though claiming to be a Data Entry Operator, had received Rs. 48 lakhs without any credible explanation for its lawful receipt or use. The record showed that the amounts were not used for the stated medical purpose but were instead diverted to purchase shares of the same company, and a part of those shares had been sold. On these facts, the Tribunal held that the shares represented property traceable to proceeds of crime and that the attachment was justified.

Conclusion: The attachment of the demat shares was upheld and the appeal was dismissed.

Final Conclusion: The Tribunal confirmed that property acquired from unaccounted funds linked to proceeds of crime can be retained under attachment, and no interference was warranted with the impugned order.

Ratio Decidendi: Property purchased with funds traceable to proceeds of crime, when lacking a credible lawful explanation, is liable to attachment under the money-laundering regime.

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