Interim attachment of a third party's property cannot be sustained when the criminal proceedings against the primary accused abate due to death, unless the prosecution provides cogent evidence of a direct nexus, as the presumption of innocence persists in the absence of a conviction.

J U D G M E N T

This Criminal Appeal is filed challenging the order dated 01.12.2025 passed in Crl.M.P.No.8 of 2025 in C.C.No.10 of 2020 by the Principal Special Judge for Trial of SPE & ACB Cases, Hyderabad.

2. The brief facts of the case are that the appellant, sister-in-law of the accused officer, filed the present petition seeking to set aside the interim attachment of properties listed in Annexure-VI of the seizure report and for their release in her favour. The case arises out of a disproportionate assets investigation by the Anti-Corruption Bureau against the accused officer, wherein certain properties standing in the name of the petitioner were attached on the allegation that they were benami assets acquired out of the accused’s ill-gotten wealth. The appellant contended that she independently acquired the said properties, including a residential flat, agricultural lands, bank balances, and documents, through her own lawful income, agricultural earnings, and family support, and that there was no nexus between her assets and the accused officer. She further relied on the fact that the accused officer had died during the pendency of the case, resulting in abatement of proceedings, and sought release of the attached properties.

3. The prosecution before the trial Court opposed the petition, asserting that the accused officer had amassed disproportionate assets and had purchased properties in the name of the appellant to conceal illicit wealth, and that the appellant lacked sufficient independent income to acquire such properties. It was alleged that she acted as a benamidar, supported by financial transactions indicating flow of funds from the accused. Upon enquiry, although the appellant examined herself and produced certain documents, the trial Court found that she failed to satisfactorily establish the source of funds or her independent ownership of the properties. Holding that the appellant did not discharge the burden of proving lawful acquisition and that the properties were likely linked to the accused’s ill-gotten income, the trial Court dismissed the petition. Challenging the same, the appellant filed the present Criminal Appeal.

4. Heard Sri P. Vamsheedhar Reddy, learned counsel appearing on behalf of the appellant as well as Sri T. Bala Mohan Reddy, learned Standing Counsel for ACB appearing on behalf of the respondent - State.

5. Learned counsel for the appellant submitted that the impugned order is illegal, arbitrary and suffers from non-application of mind, particularly in view of the admitted fact that the sole accused officer died during the pendency of proceedings, resulting in abatement of the case. He further submitted that once the criminal proceedings abate, the very basis for continuation of attachment ceases to exist, and therefore the continued attachment of the petitioner’s properties is unsustainable in law. He contended that the petitioner is a third party and not an accused, and her properties, including the residential flat and agricultural lands, were acquired through lawful and independent sources such as sale proceeds, family gift, and declared income and that there is no evidence of any nexus or money trail connecting the petitioner’s properties with the alleged ill-gotten assets of the deceased accused, and the trial court failed to properly consider the documentary evidence placed on record. Therefore, he prayed the Court to set aside the order of the trial Court by allowing this Criminal Appe