PMLA search and seizure upheld where lawful source of seized cash was not credibly proved and reasons were duly recorded.

Retention of seized cash, documents and electronic media was sustained because the explanation for their lawful source was not credibly established; the claimed property-transaction trail was inconsistent, relied on unregistered sale agreements, and did not satisfactorily account for the recovered cash. The challenge based on absence of recorded reasons under sections 17 and 8 of the Prevention of Money Laundering Act failed because the record showed search on reasonable belief and compliance with the statutory requirements. The objection based on the searched person's death and a later supplementary complaint also failed, as a PMLA search may validly proceed against a person in possession of proceeds of crime even if not an accused in the scheduled offence.

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Issues: (i) Whether the retention of the cash, documents and electronic media seized from the appellant's was justified; (ii) Whether the search and subsequent proceedings were vitiated for want of recorded reasons under sections 17 and 8 of the Prevention of Money Laundering Act, 2002; (iii) Whether the death of the appellant and the later filing of a supplementary complaint affected the validity of the search proceedings and retention order.

Issue (i): Whether the retention of the cash, documents and electronic media seized from the appellant's was justified.

Analysis: The seized cash was claimed to have arisen from property transactions, but the explanation was found inconsistent with the appellant's contemporaneous statement, the sale agreements relied upon were unregistered, and the documents did not satisfactorily account for the cash recovered. The material placed before the authority did not establish a credible source for the seized amount.

Conclusion: The retention of the seized cash and connected material was upheld against the appellant.

Issue (ii): Whether the search and subsequent proceedings were vitiated for want of recorded reasons under sections 17 and 8 of the Prevention of Money Laundering Act, 2002.

Analysis: The record showed that the search was conducted on the basis of reasonable belief and that the adjudicating authority proceeded after considering the application and material placed before it. The requirement under section 17 is recording of reasons and forwarding them to the Adjudicating Authority, while section 8 does not require a separate recording of reasons in the same manner as a provisional attachment provision. No material was shown to discredit compliance with these statutory requirements.

Conclusion: The challenge based on absence of reason to believe failed.

Issue (iii): Whether the death of the appellant and the later filing of a supplementary complaint affected the validity of the search proceedings and retention order.

Analysis: The legality of the search was not defeated merely because the person searched was not the sole accused in the scheduled offence or because a supplementary complaint was filed after his death. A search under the PMLA can validly be conducted against a person in possession of proceeds of crime even if that person is not an accused in the predicate or money-laundering offence. The later complaint did not nullify the search proceedings.

Conclusion: The objection based on death of the appellant and the supplementary complaint was rejected.

Final Conclusion: The appeal disclosed no infirmity in the adjudicating authority's order, and the confirmation of retention of the seized properties was maintained.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, a search and seizure can validly be conducted against a person found in possession of proceeds of crime even if that person is not an accused in the scheduled offence, and retention of the seized property will be sustained where the explanation for its lawful source is not credibly established.

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