By Vijay Pal Dalmia, Advocate
Supreme Court of India & Delhi High Court
Partner Vaish Associates Advocates
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The provisional attachment under the directions of enforcement authorities is subject to confirmation by the adjudicating authority. Mere confirmation of attachment by the adjudicating authority does not lead to the person claiming interest in the property being divested of such interest as he legitimately holds, inasmuch as the expression "attachment" is defined by section 2 (1) (d) to mean prohibition of transfer, conversion, disposition or movement of property by an order issued under third Chapter of PMLA. As is seen, upon perusal of Section 5 (4), mere order of provisional attachment does not prevent a person "entitled to claim" any interest in the property ("person interested") or to enjoyment of an immovable property (for example a lessee) from such enjoyment, the possibility of taking over the possession of such property or for it to be treated as "frozen" [Section 17 (1A)] arising only upon confirmation by the adjudicating authority under section 8 (4).
In terms of such scheme, the attachment is an interim measure, eventual intendment being that in the event of it being "found" that the offence of money-laundering has been committed and that "such property" is involved or has been used for such offence to be committed, the same shall be ordered to be "confiscated to the Central Government" [Section 8 (5)].
In attachment proceedings leading to confirmation of the attachment by the adjudicating authority with reference to Section 8 of PMLA, it may be noted that the prescribed procedure begins by issuance and service of notice within thirty days by the adjudicating authority on the person respecting whom there is reason to believe as to either (a) his complicity in the crime in the offence of money-laundering or (b) of he being in possession of proceeds of crime [Section 8 (1)].
It is pertinent to note here that in terms of the provisos to sub- Section (1) of Section 8, the right to be heard in opposition to the prayer for confirmation of attachment by the adjudicating authority is also given to such third parties as may be holding the property in question "on behalf of any other person" (whether jointly or otherwise), the adjudicating authority also being obliged by the proviso to sub-Section (2) of Section 8 to give opportunity of being heard and prove that the property is "not involved in money- laundering" even to such third parties as to whom notice may not have been issued but may have "claimed" the same. Such third parties may include a benamidar, transferee, lessee, mortgagee, hypothecatee, manager, agent, trustee, etc.
The provisional order of attachment has the outside validity of maximum one hundred eighty days and the concerned authority must take the matter to the adjudicating authority for confirmation, such submission being in the form of "complaint" under Section 5 (5) within thirty days from the date of provisional attachment, and the complaint must necessarily set out the facts on the basis of which it is made.
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