Value equivalent attachment upheld for closely linked company's deposits despite no direct tracing of proceeds of crime.

Under the money-laundering framework, fixed deposits of a closely linked company were treated as value equivalent property and the attachment was sustained even without direct tracing of proceeds of crime, because the Tribunal found a sufficient nexus through common directorship, shareholding and the need to secure the quantified fraud amount. The appellant's claim that its bank account and deposits belonged to an independent legal entity did not justify release, as the separate corporate identity was not decisive on the facts. The appeal therefore failed and the provisional attachment remained in force.

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Issues: (i) Whether the attachment of the appellant company's fixed deposits could be sustained as value equivalent property despite the absence of direct evidence of transfer of proceeds of crime to the appellant; (ii) whether the appellant was entitled to release of the attached deposits on the basis that the bank account and fixed deposits belonged to an independent legal entity.

Issue (i): Whether the attachment of the appellant company's fixed deposits could be sustained as value equivalent property despite the absence of direct evidence of transfer of proceeds of crime to the appellant.

Analysis: The appeal arose under Section 26 of the Prevention of Money Laundering Act, 2002 against confirmation of provisional attachment. The attachment was upheld on the basis that the accused company had allegedly committed a large-scale fraud, the appellant company had a common director with the accused company, and the accused company held a substantial shareholding in the appellant company. The Tribunal treated the attached fixed deposits as attachable to the extent of the quantified fraud, even though direct tracing of the proceeds of crime to the appellant company was not established.

Conclusion: The attachment of the fixed deposits as value equivalent property was sustained.

Issue (ii): Whether the appellant was entitled to release of the attached deposits on the basis that the bank account and fixed deposits belonged to an independent legal entity.

Analysis: The appellant relied on the bank's clarification regarding ownership of the account and disputed the assumption that the deposits belonged to the accused company. The Tribunal nevertheless held that the appellant's separate corporate identity did not warrant release of the attachment in the facts of the case, particularly in view of the common management link, shareholding pattern, and the absence of available assets of the accused company and its director.

Conclusion: The appellant was not entitled to release of the attached deposits.

Final Conclusion: The attachment was upheld and the appeal failed.

Ratio Decidendi: Property of a closely linked company may be attached as value equivalent property under the money-laundering framework even without direct tracing, where the tribunal finds a sufficient nexus through common control, shareholding, and the need to secure the quantified proceeds of crime.

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