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Issues: (i) Whether the attachment was invalid because the scheduled offence provision was inserted after the loan sanction date; (ii) Whether properties acquired before the alleged fraud were liable to attachment; (iii) Whether settlement with the bank in Lok Adalat required release of the attached properties; (iv) Whether the property of a discharged co-appellant had to be released; and (v) Whether the properties of persons not named as accused in the predicate case were liable to be retained under attachment.
Issue (i): Whether the attachment was invalid because the scheduled offence provision was inserted after the loan sanction date?
Analysis: The relevant date for the offence of money-laundering is when proceeds of crime are dealt with, projected as untainted, concealed, possessed, acquired, or used. The offence is independent of the date of the predicate offence and may be continuing in nature. The insertion of the scheduled offence provision after the loan sanction date did not defeat the attachment where the laundering activity continued thereafter.
Conclusion: The issue was decided against the appellants and in favour of the Revenue.
Issue (ii): Whether properties acquired before the alleged fraud were liable to attachment?
Analysis: The definition of proceeds of crime is wide enough to include not only property directly derived from criminal activity but also the value of such property. Properties acquired earlier are not immune if they represent the value of proceeds of crime or if the accused retained an interest when the criminal activity occurred. On the facts, attachment was only to the extent of equivalent value and was supported by the statutory scheme.
Conclusion: The issue was decided against the appellants and in favour of the Revenue.
Issue (iii): Whether settlement with the bank in Lok Adalat required release of the attached properties?
Analysis: Settlement of the bank's claim did not conclude the predicate prosecution or the PMLA proceedings. Releasing the properties at that stage would frustrate the object of attachment and could render later confiscation proceedings ineffective if conviction followed.
Conclusion: The issue was decided against the appellants and in favour of the Revenue.
Issue (iv): Whether the property of a discharged co-appellant had to be released?
Analysis: Discharge of one person in the predicate case does not by itself bar attachment where the property is alleged to represent proceeds of crime and the source of acquisition is unexplained. A plea of stridhan or independent ownership required proof and could not be accepted at the attachment stage on the existing material.
Conclusion: The issue was decided against the appellants and in favour of the Revenue.
Issue (v): Whether the properties of persons not named as accused in the predicate case were liable to be retained under attachment?
Analysis: The sweep of provisional attachment is not confined to accused persons in the scheduled offence. Any person in possession of or involved with proceeds of crime may face attachment if the property is connected with the laundering activity.
Conclusion: The issue was decided against the appellants and in favour of the Revenue.
Final Conclusion: The attachment orders were sustained, and the appeals failed because the properties were found to be linked to proceeds of crime or their equivalent value, notwithstanding the dates of acquisition, settlement with the bank, discharge of one party, or the non-arraying of certain holders as accused.
Ratio Decidendi: For the purposes of the Prevention of Money Laundering Act, attachment can extend to property or its equivalent value wherever it represents proceeds of crime, and the power is not confined to persons named as accused in the predicate offence; the material date is the laundering activity, not merely the date of the scheduled offence.
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