Provisional attachment under money-laundering law upheld where material supported belief, and pre-offence property could be attached as equivalent value.

Writ jurisdiction may still be invoked despite statutory remedies under the Prevention of Money-Laundering Act, 2002 where the challenge goes to the root of jurisdiction. The Gauhati HC found that the Authorized Officer had sufficient material, including investigation records, statements, seized documents, GST data and financial trail evidence, to form the requisite reason to believe for provisional attachment. It further held that property purchased before the scheduled offence could still be attached as equivalent value of proceeds of crime. The Court also held that disclosure of recorded reasons in the attachment order was not prohibited by the statute or rules and did not by itself vitiate jurisdiction, while referring confidentiality issues to a larger bench.

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Issues: Whether the writ petition was entertainable despite the statutory remedy under the Prevention of Money-Laundering Act, 2002; whether the Authorized Officer had valid "reason to believe" on the basis of material in possession to issue the provisional attachment order; and whether property acquired before the scheduled offence could nevertheless be attached as equivalent value of proceeds of crime.

Analysis: The Court held that though an alternative remedy existed before the Adjudicating Authority and appellate forums under the Act, writ jurisdiction could still be exercised where the challenge went to the root of jurisdiction. On the materials referred to in the provisional attachment order, the Court found that the Authorized Officer had before him relevant investigation material, statements, seized documents, GST records and financial trail evidence sufficient to form the requisite belief that proceeds of crime were in possession of the persons concerned and were likely to be dealt with in a manner frustrating confiscation. The Court also found that the attached immovable properties, though purchased before the scheduled offence, could be brought within attachment because the attachment was directed against the value of proceeds of crime already traced into the formal financial system and not confined only to the original asset in its first form. On the contention that the recorded reasons could not form part of the attachment order, the Court held that the statute and rules did not prohibit disclosure of such reasons in the order and that inclusion of the reasons did not by itself vitiate jurisdiction.

Outcome: The Court found no merit in the challenge to the provisional attachment order on the issues considered, but, to maintain judicial consistency, referred two questions concerning the confidentiality and disclosure of the recorded reasons to a larger bench and directed the matter to be placed before the Chief Justice for constitution of that bench.

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