Equivalent-value attachment can extend to pre-existing assets where alleged proceeds are untraceable and cash deposits remain unexplained.

Property of equivalent value may be attached under the Prevention of Money Laundering Act where directly derived proceeds are unavailable or laundered and substantial cash deposits or assets remain unexplained. The notes describe evidence such as digital material, cash deposits, multiple accounts and investment routing as supporting treatment of assets as proceeds of crime. They also address attachment of accounts used by business entities and joint account holders where funds were allegedly projected as business receipts or parked in deposits and investments. Retirement-benefit components comprising pension, gratuity and provident-fund amounts require segregation and release, while other attachable balances may remain under attachment.

---

---

Issues: (i) Whether the confirmation of provisional attachment was sustainable despite the challenges to the predicate allegations, the alleged absence of a money trail, and the claimed invalidity of the reasons to believe; (ii) Whether the adjudication was vitiated by non-supply of relied-upon documents and absence of a scheduled offence; (iii) Whether funds predating the alleged criminal activity could be attached as value of proceeds of crime; (iv) Whether the accounts of the entities operated by the second appellant and the joint accounts operated by the third appellant were liable to attachment; (v) Whether pension, gratuity and provident-fund amounts could remain under attachment.

Issue (i): Whether the confirmation of provisional attachment was sustainable despite the challenges to the predicate allegations, the alleged absence of a money trail, and the claimed invalidity of the reasons to believe.

Analysis: The material showed that the first appellant was charge-sheeted, his discharge application had been rejected and charges had been framed in the predicate case. The decision concerning appointments under the 2016 recruitment process did not concern the distinct allegations relating to manipulation of TET-2014. Witness statements, digital material, cash deposits, multiple accounts, and routing of funds into investments supported the finding that the attached assets represented proceeds of crime. The appellants did not satisfactorily disclose the source of the cash deposits despite the statutory burden under Sections 8(1) and 24 of the Prevention of Money Laundering Act, 2002.

Conclusion: The confirmation of attachment was sustainable against the appellants, except to the limited extent separately directed.

Issue (ii): Whether the adjudication was vitiated by non-supply of relied-upon documents and absence of a scheduled offence.

Analysis: The relied-upon documents had been supplied and a detailed response to the notice was filed, demonstrating an effective opportunity to contest the proceedings. Cognizance had been taken and charges framed in relation to the predicate offences.

Conclusion: The challenge based on violation of natural justice and absence of a scheduled offence was rejected against the appellants.

Issue (iii): Whether funds predating the alleged criminal activity could be attached as value of proceeds of crime.

Analysis: Where directly derived proceeds are unavailable or have been laundered, the statutory expression includes property of equivalent value. Since the alleged proceeds substantially exceeded the value of the attached properties and the appellants did not establish the source of substantial cash deposits, attachment of properties acquired before the alleged crime was permissible to secure the value of proceeds of crime.

Conclusion: Attachment of pre-existing funds as property of equivalent value was upheld against the appellants.

Issue (iv): Whether the accounts of the entities operated by the second appellant and the joint accounts operated by the third appellant were liable to attachment.

Analysis: The evidence supported the finding that the consultancy and online-class entities were used to collect and project illicit funds as business receipts, without effective services being rendered. The third appellant's joint accounts were used to park cash and create fixed deposits and investments; the source of the deposits was not explained.

Conclusion: Attachment of the entity accounts and joint accounts was sustained against the appellants.

Issue (v): Whether pension, gratuity and provident-fund amounts could remain under attachment.

Analysis: The attachment included accounts containing retirement-related benefits. Although other balances remained attachable in view of the proceeds of crime found, pension, gratuity and provident-fund components were directed to be segregated and released.

Conclusion: The appellants were entitled to release of the pension, gratuity and provident-fund amounts; attachment of salary, legislative honorarium and other amounts remained operative.

Final Conclusion: The attachment framework and findings concerning proceeds of crime were maintained, with confined relief protecting the identified retirement-benefit amounts.

Ratio Decidendi: Where alleged proceeds of crime are untraceable and the person fails to explain cash deposits and assets, property of equivalent value may be attached, including property acquired before the scheduled offence.

---