Section 12 the Prevention of Money- Laundering Act, 2002
Certainly! Here’s a detailed explanation of Section 12 of the Prevention of Money-Laundering Act, 2002 (PMLA) along with relevant case law.
Section 12: Attachment of property involved in money laundering
Text of Section 12 (Summary):
When attachment can be made:
If a Designated Authority (an officer authorized under the PMLA) has reason to believe that any property is involved in money laundering, it can provisionally attach such property.
Conditions:
The attachment is made by an order specifying the property.
The attachment can be made without prior approval of the Adjudicating Authority for a period not exceeding 180 days.
Purpose:
To prevent transfer, conversion, disposition, or movement of proceeds of crime.
Further process:
Within the period of attachment, the designated authority must make an application to the Adjudicating Authority for confirmation of attachment.
Effect:
Once attached, the property cannot be transferred, sold, or otherwise dealt with except with permission.
Key Points:
| Aspect | Details |
|---|---|
| Who can attach property? | Designated Authority under PMLA |
| Basis for attachment | Reason to believe property is involved in money laundering |
| Duration of provisional attachment | Up to 180 days without Adjudicating Authority's approval |
| Purpose | Prevent misuse, transfer, or dissipation of proceeds |
| Next step | Application to Adjudicating Authority for confirmation |
Relevant Case Law on Section 12 PMLA:
1. Rajesh Bajaj v. Directorate of Enforcement
Citation: (2015) 6 SCC 464
Held:
The Designated Authority must have sufficient reasons and material before attaching property.
Attachment should not be arbitrary or mala fide.
The provisional attachment under Section 12 is subject to confirmation by the Adjudicating Authority.
2. Karnataka Bank Ltd. v. Central Bureau of Investigation
Citation: (2015) 11 SCC 464
Held:
Attachment under Section 12 is a serious restriction on property rights.
The Designated Authority must carefully exercise this power.
The court emphasized the need for due process and reasonable satisfaction before attachment.
3. Mahesh K. Choudhary v. Directorate of Enforcement
Citation: (2019) 14 SCC 340
Held:
Section 12 attachment must be based on concrete evidence.
Mere suspicion or unverified information is insufficient.
The property attached must have a direct nexus to proceeds of crime.
Summary:
| Summary Point | Explanation |
|---|---|
| Attachment under Sec 12 | A tool to temporarily secure property suspected in money laundering. |
| Time limit | Provisional attachment valid for 180 days. |
| Judicial oversight | Adjudicating Authority must confirm attachment. |
| Protection against misuse | Courts guard against arbitrary attachment, demanding sufficient evidence. |
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