31 January 2024 Prevention Of Money Laundering Act >> Criminal Law  

The ambit of Section 8(3)(a) of the Prevention of Money Laundering Act, 2002 (PMLA) faces judicial examination. This provision governs the retention period for property seized by the Directorate of Enforcement (ED) under PMLA.

Facts:

A recent case involved a challenge to the ED's order upholding the retention of seized items. The crux of the dispute lies in the interpretation of "the proceedings relating to any offence under this Act before a Court" within Section 8(3)(a). The petitioner contends that the 365-day limitation under this section has expired, necessitating the release of the seized property.

The Legal Contention:

The ED argues for a broad construction of "proceedings...before a Court." They posit that this encompasses any court proceedings related to the underlying "scheduled offence" that allegedly generated the laundered money, even if not directly prosecuted under PMLA.

The petitioner counters by advocating for a more restrictive interpretation. They assert that the 365-day limit applies solely to PMLA offenses themselves, and proceedings connected to the predicate offense fall outside its purview.

Relevant PMLA Provisions:

• Section 3: Defines the offense of money laundering.
• Section 5: Enables provisional attachment of property believed to be involved in money laundering.
• Sections 17 & 18: Empower the ED to conduct searches, seizures, property freezes, and personal searches.
• Sections 20 & 21: Prescribe the procedure for retaining seized property/records.
• Section 8: Grants the Adjudicating Authority the power to confiscate attached properties.

Conclusion:

The court's forthcoming judgment will hinge on its interpretation of "proceedings...before a Court" within Section 8(3)(a). A broader interpretation would afford the ED greater latitude in retaining seized property. Conversely, a narrower interpretation could expedite the return of property for individuals not convicted under PMLA.

This case underscores the ongoing endeavor to strike a balance between facilitating the ED's investigation of financial crimes and safeguarding individual rights to property.

  PREVENTION OF MONEY LAUNDERING ACT, 2002