In Brief
The appellant, managing partner of a sand mining firm, had Rs 10.7 crores and 128 kg of gold seized by the Income Tax Department. The Enforcement Directorate registered a money laundering case and provisionally attached the property. The Adjudicating Authority refused to confirm the attachment, finding insufficient evidence that unaccounted money was connected to money laundering offences. The CBI's main criminal case was also closed for lack of evidence, and two FIRs were quashed by the High Court. The Supreme Court held that forming a Reasonable Belief for only part of seized funds but attaching all is illegal. Since the schedule offence was not established and the I.T. Department confirmed the funds were legitimate, the money laundering prosecution could not proceed. The Court set aside the High Court's order and quashed the money laundering case.
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