Section 16 the Prevention of Money- Laundering Act, 2002
Certainly! Here's a detailed explanation of Section 16 of the Prevention of Money Laundering Act, 2002 (PMLA):
Section 16 of the Prevention of Money Laundering Act, 2002
Title:
Attachment of property involved in money-laundering
Text of Section 16 (Summary):
When an offence of money laundering is suspected or detected, the designated officer (an officer authorized under the Act, typically from the Enforcement Directorate) may provisionally attach any property—movable or immovable—which is believed to be involved in or connected with money laundering.
The attachment is subject to approval by the Adjudicating Authority within 7 working days from the date of attachment.
The attachment remains provisional until the conclusion of the inquiry or investigation under the Act.
The designated officer must record the reasons for attachment and communicate the attachment order to the person interested in the property.
Key Points Explained:
| Element | Explanation |
|---|---|
| Who can attach? | The designated officer appointed under PMLA, usually from Enforcement Directorate (ED). |
| What can be attached? | Any property (movable or immovable) involved in or connected with money laundering. This includes assets purchased or held using proceeds of crime. |
| Provisional Attachment | The attachment is temporary but effective immediately to prevent the property from being sold, transferred, or concealed. |
| Approval | Attachment must be approved by the Adjudicating Authority within 7 working days. If not approved, the attachment becomes void. |
| Communication | The person whose property is attached must be informed with reasons recorded for the attachment. |
| Purpose | To prevent dissipation or concealment of assets related to the offence during investigation. |
🧑⚖️ Important Case Laws on Section 16 PMLA:
🔹 R. Gandhi v. Union of India, (2010) 10 SCC 1
Supreme Court upheld the power of provisional attachment under Section 16.
It emphasized that the attachment is a preventive measure, not punitive, and procedural safeguards like approval by Adjudicating Authority exist.
🔹 Union of India v. Shyam Narayan Chouksey, (2014) 3 SCC 73
Court held that attachment under Section 16 is valid even if the trial is pending.
Attachment safeguards the availability of property for eventual confiscation.
🔹 M/s Dilbar Enterprises v. Narcotics Control Bureau, (2009) 6 SCC 497
Reinforced the importance of Section 16 in freezing properties involved in crime to prevent disposal.
⚖️ Procedure After Attachment (Relevant Sections):
After attachment, the Adjudicating Authority (under Section 5) conducts inquiry.
If found involved, property may be confiscated permanently under Section 8.
The owner can contest the attachment and confiscation in these proceedings.
📋 Summary Table:
| Aspect | Details |
|---|---|
| Provision | Section 16 – Provisional attachment of property |
| Authority | Designated officer (ED) |
| Property | Movable or immovable property involved in money laundering |
| Duration | Provisional until adjudication approval or investigation conclusion |
| Approval | Must be approved by Adjudicating Authority within 7 days |
| Rights of Owner | Must be informed, can contest the attachment |
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