Money laundering as a continuing offence supports attachment of properties traceable to proceeds of crime despite earlier acquisition or non-accused status.

Money laundering under the PMLA was treated as an independent and continuing offence, so the 2009 inclusion of Prevention of Corruption Act offences in the Schedule did not prevent action against earlier-acquired properties. The Tribunal also found no reliable proof of prior departmental permission or lawful source of funds, and accepted that the appellants failed to explain the acquisition of the assets from known income. Prior police seizure or attachment in the criminal case did not bar provisional attachment under the PMLA, and properties could be attached even if the holders were not named as accused, where they represented proceeds of crime.

---

---

Issues: (i) Whether the 2009 amendment inserting sections 7 to 13 of the Prevention of Corruption Act, 1988 in the schedule to the Prevention of Money Laundering Act, 2002 could not be applied retrospectively to properties acquired earlier; (ii) whether prior permission or intimation from the department was obtained for acquiring the immovable properties; (iii) whether attachment by the Enforcement Directorate was invalid because the properties had already been seized by the police or were under attachment in the criminal case; (iv) whether the appellants had lawful sources of income to acquire the immovable properties; (v) whether the properties covered by the will deed belonged to Killi Raghuramudu and were not liable to attachment; and (vi) whether the properties of the other appellants were liable to be released merely because they were not named as accused in the charge-sheet.

Issue (i): Whether the 2009 amendment inserting sections 7 to 13 of the Prevention of Corruption Act, 1988 in the schedule to the Prevention of Money Laundering Act, 2002 could not be applied retrospectively to properties acquired earlier?

Analysis: The relevant inquiry was held to be the date on which the property was projected or claimed as untainted and the act of money laundering occurred, not the date of the underlying scheduled offence. Money laundering was treated as an independent and continuing offence connected with the proceeds of crime, and the scheduled offence could pre-date the inclusion of the predicate offence in the schedule without defeating action under the 2002 Act.

Conclusion: The contention of retrospective inapplicability was rejected and the issue was decided against the appellants.

Issue (ii): Whether prior permission or intimation from the department was obtained for acquiring the immovable properties?

Analysis: The Tribunal found no reliable proof that prior permission or proper intimation had been obtained. The materials relied upon by the appellants were not treated as sufficient to dislodge the investigation findings, and the burden remained on the appellant to explain lawful acquisition. The issue was also viewed as requiring proof in the predicate criminal trial.

Conclusion: The issue was decided against the appellants.

Issue (iii): Whether attachment by the Enforcement Directorate was invalid because the properties had already been seized by the police or were under attachment in the criminal case?

Analysis: Search and seizure under the criminal process and provisional attachment under the 2002 Act were held to operate in different fields. The Tribunal relied on the overriding effect of the 2002 Act and held that prior police seizure did not bar attachment by the Enforcement Directorate.

Conclusion: The issue was decided against the appellants.

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

Analysis: The claimed sources such as sale proceeds, rental income, agricultural income, commission income, provident fund withdrawals, and housing loans were found not to be satisfactorily substantiated. The Tribunal accepted the enforcement version that the appellants failed to explain the acquisition of disproportionate assets from known legal income.

Conclusion: The issue was decided against the appellants.

Issue (v): Whether the properties covered by the will deed belonged to Killi Raghuramudu and were not liable to attachment?

Analysis: The Tribunal found that the will deed did not establish a lawful independent source for the properties. On the materials considered, the claim that the properties genuinely belonged to Killi Raghuramudu was not accepted, and the surrounding circumstances indicated that the properties were traceable to the tainted funds linked with the main appellant.

Conclusion: The issue was decided against the appellants.

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

Analysis: The Tribunal held that attachment under the 2002 Act is not confined to persons named as accused in the scheduled offence. Property in the hands of any person can be attached if it represents proceeds of crime and is involved in the money-laundering process.

Conclusion: The issue was decided against the appellants.

Final Conclusion: The appeals failed on all substantive grounds and the confirmation of provisional attachment was sustained.

Ratio Decidendi: Money laundering under the Prevention of Money Laundering Act, 2002 is an independent and continuing offence, and attachment may be made against proceeds of crime even where the scheduled offence predates the inclusion of the predicate offence in the schedule or the holder is not an accused in the predicate offence.

---