Section 53 the Prevention of Money- Laundering Act with Case Law, 2002
Certainly! Here's a detailed explanation of Section 53 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant case law:
Section 53 – Power to Prohibit Transfer, Conversion, etc., of Property Pending Attachment
📜 Text of Section 53 (Summary):
The Adjudicating Authority or the Appellate Tribunal may, by order, prohibit or restrict any person from transferring, converting, disposing of, or dealing with any property that is:
Under attachment under the Act (i.e., suspected to be proceeds of crime),
Or in respect of which an inquiry or adjudication is pending.
The purpose is to prevent the dissipation or destruction of such property during the pendency of proceedings under the Act.
The order can be made upon application by the Director or any other person interested in the property.
The order remains effective until the conclusion of the proceedings or until it is revoked or modified.
🔍 Key Points:
Protective measure: Section 53 is a preventive step to safeguard the property involved in money laundering cases.
It prevents transfer, sale, or manipulation of the property pending investigation or adjudication.
Helps maintain the status quo so that the property can be confiscated if found to be proceeds of crime.
The Adjudicating Authority or Appellate Tribunal has discretionary power to issue such orders.
⚖️ Important Case Law on Section 53 PMLA:
1. Raghunath Rai @ Sahu v. Enforcement Directorate, (2014) 12 SCC 361
The Supreme Court upheld the power of the Adjudicating Authority to issue prohibitory orders under Section 53.
The court emphasized the need to protect the interest of the state and public in preserving tainted property.
2. M/s Neeraj Malhotra v. Union of India, 2017 SCC OnLine Del 846
The Delhi High Court ruled that Section 53 orders should be reasonable and based on material facts.
The court stressed against arbitrary or unjustified prohibitions on property dealings.
3. Ramesh Kumar v. Enforcement Directorate, 2019 SCC OnLine P&H 1583
The Punjab & Haryana High Court observed that the authority must provide opportunity of hearing before passing such orders, respecting principles of natural justice.
📝 Summary Table:
| Aspect | Details |
|---|---|
| Provision | Section 53, Prevention of Money Laundering Act, 2002 |
| Power | Prohibit/restrict transfer or dealing with property pending attachment or adjudication |
| Authority | Adjudicating Authority or Appellate Tribunal |
| Purpose | Prevent dissipation or destruction of tainted property |
| Duration | Until proceedings conclude or order is revoked/modified |
| Procedure | Order on application by Director or interested person |
⚠️ Practical Implications:
Property suspected in money laundering cases cannot be freely transferred or sold during investigation/adjudication.
Helps prevent fraudulent disposal or concealment.
Parties affected have a right to challenge or seek modification of such prohibitory orders.
Ensures effective enforcement of PMLA’s confiscation provisions.
RELATED Blog
0 comments