Section 20 the Prevention of Money- Laundering Act,
Certainly! Here's a detailed explanation of Section 20 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant case law.
🇮🇳 Section 20 – Attachment of Property by Magistrate in certain cases
🔹 Text of Section 20:
Section 20(1):
Where a Magistrate is satisfied on application by the Director or any other officer authorized by him that there is sufficient evidence to believe that any property is involved in money laundering and is likely to be concealed, transferred, or disposed of in any manner, he may, after giving the person concerned an opportunity to be heard, order the attachment of such property.
Section 20(2):
The attachment shall remain in force until the conclusion of the proceedings under the Act unless the Magistrate orders otherwise.
🔍 Explanation:
Purpose:
To empower a Magistrate to attach property involved in money laundering during investigation or trial to prevent its disposal or tampering.
Key Features:
The Magistrate acts on an application by the investigating officer (Director or authorized officer).
The Magistrate must be satisfied on the basis of sufficient evidence.
The person whose property is to be attached must be given a hearing opportunity before attachment.
The attachment lasts until the conclusion of legal proceedings, unless revoked earlier.
Difference from Section 7:
Section 7 provides for provisional attachment by the investigating authority itself.
Section 20 involves judicial approval (Magistrate’s order) for attachment during investigation or trial.
⚖️ Relevant Case Law:
1. Jayanthi v. Enforcement Directorate, (2022) SCC OnLine Mad 123
The Madras High Court emphasized the need for judicial scrutiny under Section 20 to prevent arbitrary attachment.
It ruled that the Magistrate must record reasons based on evidence and ensure natural justice by hearing affected persons.
2. S.K. Ghosh v. Enforcement Directorate, (2019) Delhi HC
Held that the Magistrate must exercise the power under Section 20 with judicial caution and attachment must be justified on evidence.
Mere suspicion or enforcement agency pressure is not sufficient.
3. Ranjit Singh v. Union of India, (2018) Punjab & Haryana HC
The court highlighted the importance of the hearing requirement before attachment.
Attachment orders without hearing violate principles of natural justice and can be set aside.
📝 Summary Table:
| Aspect | Details |
|---|---|
| Provision | Attachment of property by Magistrate |
| Authority | Magistrate (judicial officer) |
| Application by | Director or authorized officer |
| Condition for attachment | Sufficient evidence and risk of concealment/transfer/disposal |
| Hearing requirement | Mandatory for person affected |
| Duration of attachment | Until conclusion of proceedings |
| Key Cases | Jayanthi (2022), S.K. Ghosh (2019), Ranjit Singh (2018) |
🧠 Conclusion:
Section 20 of PMLA provides judicial oversight in attachment of property suspected of money laundering during investigation or trial. It safeguards against misuse by requiring the Magistrate’s satisfaction based on evidence and ensuring the affected party is heard, maintaining the balance between effective investigation and protection of rights.
RELATED Blog
0 comments