Money-laundering as a continuing offence supports PMLA attachment despite earlier acquisition and prior criminal seizure.

Money-laundering was treated as a continuing and independent offence, so the 2009 inclusion of Prevention of Corruption Act offences in the PMLA schedule was held applicable even though the assets were acquired earlier. Prior departmental permission for acquisition did not establish lawful source of funds, and the appellants failed to prove income from legitimate sources. Provisional attachment under the PMLA was not invalidated by prior seizure or attachment in criminal proceedings because the PMLA operates through a separate attachment regime with overriding effect. A will-based ownership claim was rejected where the surrounding material indicated illicit acquisition, and properties held by persons not named in the charge-sheet could still be attached if connected to proceeds of crime.

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Issues: (i) Whether the 2009 amendment inserting sections 7 to 13 of the Prevention of Corruption Act, 1988 in the PMLA schedule could not be applied where the properties were acquired before 2009; (ii) whether the appellant obtained prior permission from the department for acquiring the properties; (iii) whether provisional attachment under the PMLA was invalid because the properties had already been seized or attached by the ACB Court; (iv) whether the appellants had lawful sources of income to acquire the properties; (v) whether the property covered by the will belonged to Killi Raghuramudu and was not liable to attachment as proceeds of crime; and (vi) whether the properties of the other appellants were liable to be released because they were not named in the charge-sheet.

Issue (i): Whether the 2009 amendment inserting sections 7 to 13 of the Prevention of Corruption Act, 1988 in the PMLA schedule could not be applied where the properties were acquired before 2009?

Analysis: The relevant inquiry for money-laundering is the date on which the property is projected or claimed as untainted, not merely the date of the predicate misconduct. Money-laundering is treated as an independent and continuing offence, and liability depends on the later process or activity connected with proceeds of crime. The temporal sequence of acquisition of the underlying assets does not by itself exclude the operation of the PMLA where the assets continue to be dealt with as proceeds of crime.

Conclusion: The challenge based on retrospectivity was rejected and the issue was decided against the appellants.

Issue (ii): Whether the appellant obtained prior permission from the department for acquiring the properties?

Analysis: The record showed that the employer's communications stated that no permission or intimation had been obtained for acquisition or disposal of properties. Even apart from departmental permission, such permission would not establish that the properties were acquired from lawful income. The matter also involved disputed factual questions requiring proof in the predicate criminal trial, and the appellants did not establish the plea with reliable material.

Conclusion: The issue was decided against the appellants.

Issue (iii): Whether provisional attachment under the PMLA was invalid because the properties had already been seized or attached by the ACB Court?

Analysis: Search and seizure under the criminal process are distinct from attachment under the PMLA. The statute creates a separate regime for attachment, adjudication and confiscation, and the non obstante clause gives the PMLA overriding effect where there is inconsistency with other laws. Prior seizure by another agency therefore did not invalidate the provisional attachment under the PMLA.

Conclusion: The issue was decided against the appellants.

Issue (iv): Whether the appellants had lawful sources of income to acquire the properties?

Analysis: The claimed sources, including sale proceeds, agricultural income, rental income, commission income and withdrawals from loans or provident fund, were found unsubstantiated or inconsistent with the material collected during investigation. The appellants failed to satisfactorily explain the assets in relation to their known sources of income and the attachment order recorded a sufficient basis for treating the properties as proceeds of crime.

Conclusion: The issue was decided against the appellants.

Issue (v): Whether the property covered by the will belonged to Killi Raghuramudu and was not liable to attachment as proceeds of crime?

Analysis: The surrounding facts and statements recorded in investigation indicated that the property was not genuinely established as belonging to Killi Raghuramudu from lawful means. The will did not displace the finding that the assets were linked to illicit acquisition and the explanation offered for ownership was found unacceptable.

Conclusion: The issue was decided against the appellants.

Issue (vi): Whether the properties of the other appellants were liable to be released because they were not named in the charge-sheet?

Analysis: Provisional attachment under the PMLA is not confined to persons named as accused in the predicate offence. Any person in possession of proceeds of crime may be proceeded against if the property is connected with the laundering process. The fact that some appellants were not arrayed in the charge-sheet did not prevent attachment of the properties held by them.

Conclusion: The issue was decided against the appellants.

Final Conclusion: The attachment was upheld because the properties were found linked to proceeds of crime and the appellants failed on every substantive challenge to the PMLA proceedings.

Ratio Decidendi: Money-laundering is a continuing and independent offence, and provisional attachment may reach proceeds of crime in the hands of any person even if that person is not named in the predicate offence, provided the property is connected with the laundering process.

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