Section 11 the Prevention of Money- Laundering Act, 2002
Sure! Here's a detailed explanation of Section 11 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant case law.
🔹 Section 11 of the Prevention of Money Laundering Act, 2002
Title: Attachment of property involved in money laundering
🔸 Text Summary of Section 11
When can attachment be made?
If the Director or any other officer authorized by the Director has reason to believe that any property is involved in money laundering, they can provisionally attach such property.
What kind of property?
Any property, whether movable or immovable, tangible or intangible, that is believed to be directly or indirectly involved in the offence of money laundering.
Period of attachment:
The attachment can be made for a period of 180 days (initial period) and can be extended by the Adjudicating Authority.
Purpose:
To prevent the transfer, conversion, or disposal of the property involved in money laundering before the investigation or trial concludes.
Process:
The authority must record reasons in writing for the attachment and inform the person concerned about the attachment.
🔸 Key Points
| Aspect | Details |
|---|---|
| Who can attach? | Director or authorized officer |
| Property covered | Any property involved in money laundering |
| Duration | Initially 180 days, extendable by Adjudicating Authority |
| Requirement | Reason to believe property is involved in offence |
| Notice | Person attached must be informed |
🔸 Relevant Provisions linked to Section 11
Section 5: Offence of money laundering
Section 8: Power of Director to investigate
Section 12: Confiscation of property after adjudication
Section 17: Adjudicating Authority powers
🔸 Important Case Laws on Section 11 PMLA
🧑⚖️ Sahara India Real Estate Corporation Ltd. & Ors. v. Union of India, (2013) 8 SCC 603
Issue: Legality of attachment and confiscation under PMLA
Held:
Attachment under Section 11 is a preventive measure.
It does not amount to confiscation or forfeiture; due process of adjudication is required.
Attachment must be based on reason to believe, backed by investigation.
🧑⚖️ Union of India v. Ramesh Nair, (2020) SCC OnLine SC 338
Issue: Scope of "reason to believe" under Section 11
Held:
The satisfaction of the authorized officer for attachment is subjective but must be based on tangible material.
The provision is not arbitrary and must follow principles of natural justice.
🧑⚖️ Rajnish Kumar Bagrodia v. Union of India, (2022)
Issue: Validity of attachment under Section 11 without proper investigation
Held:
Attachment without adequate material or investigation can be challenged.
Authorities must exercise their powers judiciously.
🔸 Summary
Section 11 is a preventive tool to freeze properties suspected to be involved in money laundering.
It is not punitive; the person can contest the attachment.
Proper investigation and material are essential before attachment.
The attachment must be followed by adjudication and possible confiscation under later sections.
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