The definition of 'proceeds of crime' under the PMLA includes any property derived from criminal activity, not limited to direct profits, as financial advantages from misrepresentation qualify for property attachment.

FINAL ORDER

12.02.2026

This Order disposes of the Appeals Nos. FPA-PMLA- 2572/RP/2018 filed by M/s. Growth Infinite and FPA-PMLA- 2573/RP/2018 filed by M/s JLD Yavatmal Energy Ltd. & Ors. respectively, against the Order dated 06.08.2018 (Impugned Order) passed by the Ld. Adjudicating Authority (AA) under the Prevention of Money Laundering Act, 2002 (PMLA) in the Original Complaint No. 911/2018 (OC). The Provisional Attachment Order No. 01/2018 dated 28.02.2018 (PAO) was confirmed vide the Impugned Order.

2. Ld. Counsel for the Appellants submitted that the Central Bureau of Investigation, New Delhi registered FIR bearing No. RC 219/2012/E0010 dated 03.09.2012 against M/s JLD Yavatmal Energy Ltd. (hereinafter referred as JLD) for the offences punishable under Section 120-B read with Section 420 of IPC, 1860. CBI filed a final report dated 01.04.2014 and a supplementary report dated 15.10.2014 u/s 173 Cr.P.C. before the Special Judge, CBI, Coal Cases, Patiala House, New Delhi. ECIR dated 27.12.2013 was registered for offences under Section 3 of PMLA, 2002 against JLD and others. On 26.03.2018, an Original Complaint No. 911/2018 was filed before the Ld. Adjudicating Authority. Subsequently, Show Cause Notice (SCN) dated 02.04.2018 was issued under Section 8 (1) of PMLA by the Ld. AA, to the Appellants.

3. Ld. Counsel for the Appellants submitted that the Appellants are not involved in money laundering. It was submitted that no proceeds of crime were ever received towards the purchase of the attached property at any point in time. There is no direct nexus between the property attached and the proceeds of crime. The Respondent in the OC stated that during the period from the date of allocation of coal block in the year 2008 till the cancellation of coal block in the year 2014 by the Hon'ble Supreme Court, the Appellant Company JLD infused share capital to the extent of Rs. 2,78,50,000/- in the year 2008-09 and Rs. 47,69,600/- in the year 2013-14. The issue of fresh shares by M/s JLD Yavatmal Energy Ltd., after the allocation of coal block, resulted in the increase of net worth of the Appellant Company from Rs. 6 Lakhs in the year 2006-07 to Rs. 354.71 Lakhs in the year 2013-14. M/s JLD Yavatmal Energy Ltd. had infused capital to the extent of Rs. 3,26,19,600/- after the allocation of coal block, which, is alleged as the total amount of "proceeds of crime" (PoC). However, the capital invested in issuance of fresh shares by M/s JLD Yavatmal Energy Ltd. cannot be held to be "proceeds of crime". The Respondent has alleged that the fresh share capital of Rs. 3,26,19,600/- raised by JLD after the allocation of coal block constitutes PoC as the same has been used in the commission of offence. The assumption that any amount used in commission of a Scheduled Offences would fall within the expression "proceeds of crime" as defined under Section 2 (1)(u) of the PMLA is fundamentally flawed.

4. Ld. Counsel for the Appellants submitted that in the present case, the allegation against M/s JLD is that it had obtained allocation of coal block on the basis of misrepresentation. It is submitted that nothing was generated out of the alleged Scheduled Offences, as no coal was extracted from the coal block allocated by the Ministry. M/s JLD Yavatmal Energy did not 'derive or obtain' any benefit from the coal block or alleged scheduled offences. The amount of Rs.3,26,19,600/- was utilized in pre-emptive expenses and repayment of loans after the cancellation of coal block. Ld. Counsel further submits that the Ld. AA has merely relied