APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
V. Anandarajan, Member
Reshma Biswas Das – Appellant
Versus
Deputy Director Directorate Of Enforcement – Respondent
MP-PMLA-607/KOL/2025|Exemp.MP-PMLA-606/KOL/2025|StayFPA-PMLA-333/KOL/2025

The definition of 'proceeds of crime' includes not only assets derived directly from a scheduled offence but also the 'value of any such property,' permitting the attachment of equivalent assets when direct proceeds are untraceable, regardless of whether the equivalent assets were acquired prior to the criminal activity.

Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 2(1)(u), 5 and 8 - Money laundering - Attachment of properties - Interpretation of the definition of "proceeds of crime" - Whether equivalent value of property can be attached when actual proceeds of crime are untraceable - Held, the definition of "proceeds of crime" under Section 2(1)(u) encompasses property derived directly or indirectly from criminal activity as well as the 'value of any such property' - The provision for attaching property of 'equivalent value' is not limited solely to cases involving assets held abroad - It provides a mechanism to reach properties held by an accused when the direct proceeds are siphoned off, dissipated, or untraceable - This interpretation is necessary to uphold the legislative intent and prevent the misuse of the Act by masking criminal gains. (Paras 24, 25, 26, 28, 29, 31).

(B) Evidence - Burden of proof - Section 24 of the Act - There is a reverse burden of proof on the person in possession of the property to prove that the assets are not proceeds of crime - Merely claiming prior acquisition does not exempt a property from attachment if the total pecuniary benefit from the crime remains unrecovered. (Para 34).

Facts of the case:
The appellant challenged the confirmation of a provisional attachment order of multiple immovable properties. The appellant contended that the attached properties were acquired prior to the commission of the scheduled offence and had no nexus to the illegal activity. The respondent submitted that the direct proceeds of crime were untraceable, and therefore, the authority was entitled to attach properties of equivalent value as mandated by the Act.

Findings of Court:
The court observed that the definition of "proceeds of crime" consists of three distinct limbs, allowing for the attachment of equivalent value property when actual tainted assets are missing. It rejected the argument that acquisition prior to the offence provides immunity against attachment, noting that such a narrow interpretation would render the Act's recovery mechanisms redundant.

Issues: Whether the attachment of assets not directly derived from criminal activity or acquired before the criminal incident is permissible, and whether the "value of any such property" limb of the definition justifies the seizure of untainted property in the absence of recoverable criminal proceeds.

Ratio Decidendi: The statute empowers the investigating authorities to attach properties of equivalent value when original proceeds of crime are untraceable; this authority exists regardless of the date of property acquisition, serving to ensure that the accused does not benefit from illicit gains by merely concealing the original proceeds.

Result: Appeal dismissed.