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2021 (4) TMI 869 - HC - Money LaunderingProvisional attachment of property - allegation of diverting huge amounts of money given to the loanees and used the diverted funds for purchase of some of the properties - proceeds of crime - scheduled offences - HELD THAT:- At the inception, the legislative intent was to bring within the fold of the definition, such property, whose source of acquisition can be traced, directly or indirectly, to the benefits obtained from the commission of the scheduled offences. At that stage, the question of the proceeds of the crime not being available for being attached/confiscated, either on account of their dissipation in the hands of the person holding the property or on account of the property being moved out of India and the reach of the authority under the Act, does not appear to have been contemplated. This issue was addressed by Act 20/2015, whereby the words “or where such property is taken or held outside the country, then the property equivalent in value held within the country” were added - This amendment contemplates only one situation, namely the proceeds of the crime being moved out of India. In such a situation, the amended definition permitted the attachment of property, in India, equivalent to the value of the proceeds of thecrime, which were moved out of India. Later, by Act 13 of 2018 the words “or abroad” were added. By virtue of this amendment the property, which was moved abroad, could also be attached and confiscated. This amendment did not envisage a situation of dissipation of the property in the hands of the person holding the property. The amendments would be unnecessary if the term “or the value of such property” was understood to authorize the attachment of any property, when the actual proceeds of the crime are not available - The explanation to this provision which was brought in by Act No.2 of 2019 also speaks only of properties derived or obtained from the proceeds of a crime and expands the scope of the definition to include properties obtained not only from the scheduled offences but also criminal activity relatable to the scheduled offence. The explanation did not expand the definition to include any other property of equivalent value where the proceeds of the crime are lost even by the offender. Thus, the properties purchased before the commission of the offence, cannot fall within the definition of “proceeds of crime” and cannot be attached or confiscated under the Act. The impugned order of provisional attachment set aside - petition allowed.
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