Money-laundering and equivalent-value attachment upheld where compensation was projected as lawful and confiscation risk was shown

Receipt and retention of enhanced compensation, obtained through reliance on unrelated proceedings and incorrect judicial references, was treated as money-laundering because the amounts were projected as lawful compensation. The Tribunal also held that "proceeds of crime" is wide enough to cover equivalent-value property where tainted assets are not traceable or have been dissipated, so ancestral or pre-existing properties could be provisionally attached on that basis. It further found the Section 5(1) threshold satisfied where material showed possession of proceeds of crime and a reasonable likelihood of concealment, transfer, or other dealings frustrating confiscation. The provisional attachment was upheld.

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Issues: (i) whether the enhanced compensation received through the impugned transactions constituted money-laundering under Section 3 of the Prevention of Money Laundering Act, 2002; (ii) whether properties, including ancestral and pre-existing properties, could be provisionally attached as proceeds of crime or their equivalent value under Section 2(1)(u) of the Prevention of Money Laundering Act, 2002; and (iii) whether the preconditions for provisional attachment under Section 5(1) of the Prevention of Money Laundering Act, 2002 were satisfied.

Issue (i): whether the enhanced compensation received through the impugned transactions constituted money-laundering under Section 3 of the Prevention of Money Laundering Act, 2002.

Analysis: The compensation was disbursed after dismissal of the relevant SLPs and was obtained by relying on unrelated proceedings and incorrect use of judicial references. The receipt and retention of the amounts, coupled with their projection as lawful compensation, brought the matter within the statutory concept of money-laundering.

Conclusion: The issue was decided against the appellants.

Issue (ii): whether properties, including ancestral and pre-existing properties, could be provisionally attached as proceeds of crime or their equivalent value under Section 2(1)(u) of the Prevention of Money Laundering Act, 2002.

Analysis: The definition of proceeds of crime was treated as wide enough to include not only property directly or indirectly derived from criminal activity, but also property of equivalent value where the tainted assets were not traceable or had been dissipated. On that basis, attachment of ancestral or earlier-acquired properties was held permissible when used only as equivalent-value assets. The challenge that such properties lacked nexus with the scheduled offence was rejected.

Conclusion: The issue was decided against the appellants.

Issue (iii): whether the preconditions for provisional attachment under Section 5(1) of the Prevention of Money Laundering Act, 2002 were satisfied.

Analysis: The Tribunal held that the statutory threshold is met where the authority has material showing possession of proceeds of crime and a likelihood that they may be concealed, transferred, or dealt with so as to frustrate confiscation. The requirement does not depend on proof of imminent alienation already having occurred; a reasonable apprehension on the material was sufficient.

Conclusion: The issue was decided against the appellants.

Final Conclusion: The Tribunal upheld the provisional attachment and confirmed that the appeals disclosed no merit, leaving the impugned attachment order intact.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, proceeds of crime includes equivalent-value property when the tainted asset is not traceable, and provisional attachment is justified on material showing a likelihood of concealment or transfer frustrating confiscation.

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