Attachment, Adjudication and Confiscation

 
Under Section 5 of PMLA, if the authority as specified under the Section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in their possession, that-
 
  • Any person is in possession of any Proceeds of Crime; and
  • such Proceeds of crime are likely to be
  • Concealed,
  • Transferred, or
  • dealt with in any manner
  • which may result in frustrating any proceedings relating to confiscation of such Proceeds of Crime,
may, by order in writing, provisionally attach such property for a period not exceeding 180 days from the date of the order, in such manner as may be prescribed.
 
Attachment of 3rd Party Properties
 
Under PMLA, even the property of any person may be attached under Section 5(1) 2nd Proviso, if the designated officer has reason to believe that the property in possession of such person is involved in Money-Laundering, and the non attachment will frustrate any proceedings under the Act.
 
However, nothing in Section 5 of PMLA shall prevent the person interested in the enjoyment of the immovable property attached from such enjoyment. "Person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.
 
What after the Attachment of Property?
 
Section 8 of PMLA provides an elaborate procedure for adjudication of a complaint under Section 5 of PMLA, and a person holding property on behalf of any other person, or if there is a claim by a third person not a party to the complaint, such person is also required to be implicated into the proceedings for adjudication, and heard by the Adjudicating Authority.
 
 
Mandatory conditions for Provisional Attachment
 
In the case of Sarosh Munir Khan Vs.The Deputy Director, [534/MUM/2013], it was held as under:
 
"17. However, the following conditions are required to be satisfied before a provisional attachment order is passed by the Director or any other Officer authorised by him occupying a rank not below that of a Deputy Director;
 
(1) There should be adequate material before such Officer, which makes him believe that if the attachment of the proceeds of crime are not ordered, it might result in frustration of the confiscation.
 
(2) A person must be in possession of the proceeds of crime;
 
(3) Such person must have been charged of having committed one or the other of the scheduled offences under this Act;
 
(4) Such proceeds of crime are likely to be concealed or transferred or dealt with in any manner, which may result in frustrating any proceedings of their ultimate confiscation."
 
The Honble Supreme Court of India has held in the case Prem Singh and Ors. Vs. Birbal and Ors., AIR2006SC3608, that:
 
 
“There is a presumption that a registered document is validly executed. A registered document, therefore, prima facie would be valid in law. The onus of proof, thus, would be on a person who leads evidence to rebut the presumption.”
 
 
Subsisting rights in the property
 
In the case of The Deputy Director Mr. Vivek Prasad Vs. Sh. Vikram Dixit, Smt. Sadhna Dixit and M/s. Asthana Properties Pvt. Ltd., [], it was held as under:
 
"A property can be attached only if the Defendants have subsisting rights in the immovable property and it can be shown that the Defendants will be entitled for specific performance of alleged agreement with the any other Defendant who have such rights in the immovable property which has not been terminated or such rights which will subsist even after termination of the agreement.".
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