Proceeds of crime attachment can rest on probable fund tracing, and prior property purchase does not automatically defeat attachment.

Attachment under the Prevention of Money-Laundering Act is described as sustainable where the available material shows, on a preponderance of probabilities, that property represents proceeds of crime or their value. The text identifies bank transfer records, statements recorded under section 50, cash book entries, and corroborative witness statements as material capable of establishing the flow of tainted funds to the appellant and supporting confirmation of attachment. It also states that prior purchase of the attached property does not automatically defeat attachment, because the statutory scheme permits attachment of equivalent value property as a protective measure pending trial. On that basis, the attachment was confirmed and the challenge failed.

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Issues: (i) whether the material on record established that funds originating from the fraudulent medical reimbursement reached the appellant as proceeds of crime, thereby justifying confirmation of attachment; (ii) whether the plea that the attached property was purchased before the alleged crime period could defeat attachment under the Prevention of Money-Laundering Act, 2002.

Issue (i): Whether the material on record established that funds originating from the fraudulent medical reimbursement reached the appellant as proceeds of crime, thereby justifying confirmation of attachment.

Analysis: The evidence showed that the reimbursed amount moved out of the salary account of the principal accused, that Rs. 36 lakh was transferred to the account of Lokesh Paliwal, and that, on the statements recorded under section 50, a substantial part of that amount was withdrawn in cash and passed on to the appellant. The Tribunal also relied on the RTGS/NEFT documentation, the cash book, and corroborative witness statements to conclude that the transactions were genuine and that the appellant had received Rs. 22 lakh in cash. At the stage of adjudication, the question was whether there was sufficient material on a preponderance of probabilities to show flow of proceeds of crime to the appellant.

Conclusion: The material was sufficient to sustain the finding that the appellant had received proceeds of crime and that the attachment was valid.

Issue (ii): Whether the plea that the attached property was purchased before the alleged crime period could defeat attachment under the Prevention of Money-Laundering Act, 2002.

Analysis: The Tribunal held that the statutory scheme permits attachment of property representing the value of proceeds of crime and that the absence of direct possession of the tainted money does not, by itself, bar attachment. It further rejected the contention that prior purchase of the property necessarily insulated it from attachment, noting that the earlier precedent relied upon by the appellant did not displace the settled position governing attachment under the Act. The attachment was treated as a protective measure to secure availability of proceeds of crime pending trial.

Conclusion: The plea based on prior acquisition of the property was rejected and did not prevent confirmation of attachment.

Final Conclusion: The impugned attachment order was sustained and the appeal failed in entirety.

Ratio Decidendi: At the adjudication stage under the Prevention of Money-Laundering Act, 2002, attachment can be confirmed on material showing, on a preponderance of probabilities, that the property represents proceeds of crime or their value, and prior acquisition of the asset does not automatically defeat such attachment.

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