Reasoned findings for retention of property under money-laundering law are mandatory; ongoing investigation alone is insufficient.

Under the PMLA, an adjudicatory order authorising retention or continued freezing of property must record independent, reasoned findings on the parties' objections and on whether the property is involved in money-laundering. A mere narration of pleadings, or reliance on the fact that investigation is still ongoing, is insufficient to satisfy the statutory test. The Tribunal noted that the impugned order lacked clear application of mind and did not address the appellants' objections on merits, so it could not stand as a valid adjudicatory determination. The order was set aside and the matter remitted for fresh consideration through a detailed speaking order.

---

---

Issues: (i) Whether the Adjudicating Authority's order permitting retention and continued freezing of properties was vitiated for want of independent findings and for not addressing the appellants' objections on merits. (ii) Whether retention of seized and frozen properties could be sustained merely because the investigation was ongoing, without the finding required under the statutory scheme that the properties were involved in money-laundering.

Issue (i): Whether the Adjudicating Authority's order permitting retention and continued freezing of properties was vitiated for want of independent findings and for not addressing the appellants' objections on merits.

Analysis: The order under challenge was found to contain a long narration of the complaint, allegations, replies and rejoinders, but no real adjudicatory reasoning on the rival contentions. The only operative observations were treated as omnibus and unsupported by a clear application of mind. The order did not contain proper findings on the objections raised by the appellants, including the challenge based on the statutory requirements governing seizure, retention and adjudication.

Conclusion: The order suffered from lack of independent reasoning and could not be sustained as a proper adjudicatory determination.

Issue (ii): Whether retention of seized and frozen properties could be sustained merely because the investigation was ongoing, without the finding required under the statutory scheme that the properties were involved in money-laundering.

Analysis: The statutory framework requires the Adjudicating Authority, after considering the reply and relevant material, to record a finding on whether the properties are involved in money-laundering. The Tribunal held that continuation of retention could not rest solely or primarily on the fact that the investigation was still in progress. Since the impugned order did not record the required reasoned finding on the involvement of the properties in money-laundering, the statutory test was not met.

Conclusion: The order could not be sustained on the basis of ongoing investigation alone, and the matter had to be reconsidered afresh.

Final Conclusion: The impugned order was set aside and the matter was remitted for fresh adjudication with a direction to pass a detailed speaking order after considering the parties' rival submissions and the relevant material, while maintaining status quo in the meantime.

Ratio Decidendi: An adjudicatory order under the PMLA permitting retention or freezing of property must contain independent, reasoned findings on the statutory issue whether the property is involved in money-laundering, and cannot be upheld merely because investigation is continuing.

---