The definition of 'proceeds of crime' includes the 'value of any such property,' permitting the attachment of equivalent assets—including those acquired prior to a scheduled offense—when the original tainted proceeds are unavailable, siphoned off, or untraceable.

By this appeal, a challenge has been made to the order dated 16.12.2024 passed by the Adjudicating Authority confirming the provisional attachment order of the property.

It is a case where an FIR was registered against the appellant for an offence under Section 420, 468, 471 of IPC. It was based on the written complaint by Mr. M. L. Rohilla, Zonal Manager, Dena Bank, Panchkula, Haryana. The appellant was holding a company in the name of M/s Ariel Construction and sought loan from the bank. The loan remained unpaid. During the course of the investigation, it was found that a term loan of Rs. 4.50 crores was sanctioned by the bank on 28.10.2013 for purchase of shuttering materials however on the enquiry, it was found that TIN No. was not existing apart from the authenticity of the invoices.

In the Original Complaint seeking confirmation of the provisional attachment order disclosed that 10 crores sanctioned against the primary securities to the company was towards the stock and book debts as on 07.11.2014. The last stock statement submitted was for May, 2015 and transactions in CCH account ceased from 01.06.2015. The borrower was given numerous reminders and follow up but he failed to provide required stock statements and even failed to cooperate with the financial institution. It was also revealed that in collusion with the valuer, managed to inflate the valuation of the property mortgaged to the bank as collateral. Taking overall facts into consideration and after initiation of the investigation under the Prevention of Money Laundering Act, 2002 (in short ‘the Act of 2002’), the provisional attachment of the property was caused and is being challenged by the appellant.

Arguments of the appellant-

The counsel for the appellant submits that an interim order has been passed by the Punjab and Haryana High Court against the predicate offence. The Direction has been given to the Trial Court to adjourn the case beyond the date fixed by the High Court. In light of the interim order, an interference in the provisional attachment of the property be caused.

The learned counsel for the appellant further submitted that Impugned Order has been passed by the single Member of the Adjudicating Authority. It lacks coram as per the provisions of the Act of 2002 and Rules made thereunder. Therefore, the Impugned Order is not sustainable in the eyes of the law. Reference of the pending SLP before the Apex Court was given. The Apex Court is yet to decide as to whether single Member of the Adjudicating Authority can pass the order going against the provisions of the Act and Rules made thereunder providing constitution of the Adjudicating Authority. In the light of the aforesaid also, the Impugned Order may be quashed.

The learned counsel further submitted that two properties have been provisionally attached by the respondent out of which one was purchased prior to the commission of crime. The respondent has failed to show any nexus with the crime for attachment of the property, thus, provisional attachment of the property purchased prior to crime period has been wrongly held to be the proceeds of crime. Reference of the judgement of the Apex Court in the case of Pavana Dibbur vs The Directorate Of Enforcement reported in (2023) SCC OnLine SC 1586 was given. It is apart from the judgements of few high courts. The prayer was made to cause interference in the Impugned Order on the grounds raised above.

Arguments of the respondent-

The appeal was contested by the counsel for the respondent. Elaborate arguments were raised on three issues and would be referred while recording findings to avoid repetition of the facts and for sake of brevity.

Findings of the Tribunal-

I have