Freezing of bank accounts under PMLA requires proof of proceeds of crime before the statutory presumption can apply.

Continued freezing and retention of bank accounts under the Prevention of Money Laundering Act, 2002 cannot rest on the pendency of investigation alone; the authority must first record a reasoned finding on relevant material that the property is proceeds of crime and is involved in money laundering. Where the person is not named in the FIR and no material shows direct or indirect involvement or a nexus between the accounts and the alleged offence, the statutory presumption under Section 24 does not arise. On that basis, the Tribunal found the retention unsustainable and set aside the impugned order.

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Issues: Whether the continued freezing and retention of the appellant's bank accounts could be sustained under the Prevention of Money Laundering Act, 2002 in the absence of a reasoned finding that the funds were proceeds of crime and were involved in money laundering.

Analysis: The appeal concerned only the appellant's frozen bank accounts. The underlying scheduled offence was copyright violation, while the appellant was not named in the FIR and there was no material showing her direct or indirect involvement in the scheduled offence or any established nexus between her accounts and the alleged criminal activity. The impugned order rested largely on the pendency of investigation and on broad assertions of prima facie involvement, but the statutory scheme under Section 8(3) of the Prevention of Money Laundering Act, 2002 requires a finding, on the relevant material, that the property is involved in money laundering. The Tribunal held that mere continuation of investigation cannot by itself justify retention. It further held that the presumption under Section 24 of the Prevention of Money Laundering Act, 2002 operates only after the foundational facts of proceeds of crime and a link to the person concerned are established, and that such foundational facts were not shown against the appellant.

Conclusion: The continued freezing and retention of the appellant's bank accounts was not sustainable, and the impugned order was set aside.

Ratio Decidendi: Retention or freezing of property under the Prevention of Money Laundering Act, 2002 cannot rest on the pendency of investigation alone; the authority must first record a reasoned finding, on relevant material, that the property is proceeds of crime and is involved in money laundering, before the statutory presumption under Section 24 can operate.

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