Provisional Attachment of Property Under Section 5 PMLA: Timelines and Remedies

What provisional attachment is

Under Section 5 of the PMLA, the Director or an authorised Deputy Director of the Enforcement Directorate may provisionally attach property believed to be proceeds of crime where it is likely to be concealed, transferred or dealt with in a way that would frustrate confiscation. The order must be in writing and record reasons to believe based on material. It remains in force for up to 180 days.

Confirmation by the Adjudicating Authority

Within thirty days of the attachment, the ED must file a complaint before the Adjudicating Authority, which issues a show-cause notice. The person concerned may explain the sources of income and the means by which the property was acquired. If the attachment is confirmed under Section 8(3), it continues while the proceedings before the Special Court are pending, and becomes final only if confiscation is ordered.

Property held by others

Proceeds of crime include property derived from criminal activity relating to a scheduled offence and, where such property has been taken or held abroad, property of equivalent value in India. People who are not accused, such as family members, purchasers and lenders, may also receive notices and may show that they acquired the property in good faith and for value.

Appeals

• Against an order of the Adjudicating Authority: appeal to the Appellate Tribunal under Section 26, within forty-five days
• Against the Appellate Tribunal's order: appeal to the High Court under Section 42, within sixty days, on any question of law or fact
• In limited cases, such as an attachment without jurisdiction, a writ petition may be entertained

Restoration during the trial

Section 8(8) allows the Special Court to restore attached or confiscated property to a claimant with a legitimate interest who has suffered a quantifiable loss from the money laundering, such as a bank or depositors, in the manner the rules provide.