Section 7 the Prevention of Money- Laundering Act, 2002
Certainly! Here's a detailed explanation of Section 7 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant case law.
🇮🇳 Section 7 – Attachment of property involved in money laundering
🔹 Text of Section 7:
Section 7(1):
If the Director or any other officer of the rank of Deputy Director authorized by him has reasons to believe that any property, whether movable or immovable, is involved in money laundering, he may provisionally attach such property for a period of 180 days.
Section 7(2):
The authority must make an application to the Adjudicating Authority within 30 days from the date of such attachment for confirmation of the attachment.
Section 7(3):
If the Adjudicating Authority confirms the attachment, the property remains attached until the conclusion of the proceedings.
🔍 Explanation:
Purpose:
To enable provisional attachment of properties suspected to be involved in money laundering, to prevent their transfer or disposal during investigation.
Key Points:
Attachment is provisional, for up to 180 days initially.
The officer must have reason to believe that the property is involved in money laundering.
Application for confirmation must be made to the Adjudicating Authority within 30 days.
Upon confirmation, attachment continues till the conclusion of the case.
Nature of Attachment:
It is a preventive measure to secure assets and not a punishment or confiscation by itself.
⚖️ Relevant Case Law:
1. K. Gopal Reddy v. Enforcement Directorate, (2019) 3 SCC 161
The Supreme Court emphasized the need for reasonable satisfaction by the officer before attachment.
Mere suspicion is not enough; there must be credible material indicating involvement of property in money laundering.
2. R. K. Jain v. Union of India, (2015) 11 SCC 335
Court held that the attachment under Section 7 is preventive and requires procedural safeguards.
The attachment must be proportionate and justified, and the person affected must have the right to challenge the attachment before the Adjudicating Authority.
3. J. Jayalalithaa v. Enforcement Directorate, (2021) SCC OnLine SC 765
Supreme Court observed that while attachment is necessary to preserve property involved in money laundering, due process must be followed.
The officer must record reasons in writing for attachment.
📝 Summary Table:
| Aspect | Details |
|---|---|
| Provision | Provisional attachment of property |
| Duration of provisional attachment | 180 days |
| Authority for confirmation | Adjudicating Authority |
| Precondition | Reason to believe property involved in money laundering |
| Nature | Preventive, not punitive |
| Key Cases | K. Gopal Reddy (2019), R. K. Jain (2015), J. Jayalalithaa (2021) |
🧠 Conclusion:
Section 7 of the PMLA empowers authorities to attach properties suspected of being involved in money laundering on a provisional basis to protect assets from being tampered with during investigations. The attachment must be based on reasoned satisfaction and followed by confirmation by the Adjudicating Authority, ensuring procedural fairness and protection of rights.
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