ADJUDICATING AUTHORITY

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Context: The Adjudicating Authority confirms attachment of suspected proceeds of crime under the PMLA, restricting access to the accused pending trial, with options to challenge the order through appellate channels

Details

• The 'Adjudicating Authority' under the Prevention of Money Laundering Act, 2002 (PMLA) plays a crucial role in confirming or dismissing the provisional attachment of properties suspected to be involved in money laundering activities.

Role of the Adjudicating Authority

• Provisional Attachment Order: The Enforcement Directorate (ED) can issue a provisional attachment order under Section 5 of the PMLA if it suspects that certain properties have been acquired with proceeds of crime. This provisional attachment order is valid for 180 days.
• Confirmation by Adjudicating Authority: Within 180 days, the Adjudicating Authority appointed by the central government must confirm the attachment. If the Adjudicating Authority confirms the attachment, the ED gains the power to take possession of the attached properties.

What Happens to Attached Properties

• Continued Possession by Accused: Until the attachment is confirmed by the Adjudicating Authority, the accused can continue to enjoy the property.
• Effect of Confirmation: Once the Adjudicating Authority confirms the attachment, the ED can take possession of the attached properties.
• Challenging the Confirmation: The accused has the right to challenge the Adjudicating Authority's confirmation order within 45 days at the PMLA's Appellate Tribunal. If the Appellate Tribunal confirms the order, further appeals can be made in the High Court and beyond.
• Confiscation After Conviction: In case of a conviction, the trial court may order the confiscation of attached properties and vest the rights to the property with the central government.
• Maintenance of Attached Properties: Attached properties may remain locked and inaccessible for years during legal proceedings. Vehicles that are attached may deteriorate over time if left unused in warehouses owned by entities like the Central Warehousing Corporation.

mplications for the Accused

• Loss of Access: The accused may lose access to their properties for an extended period, impacting their personal or business interests.
• Decay of Assets: Properties and vehicles that are attached may deteriorate during the legal process, potentially resulting in significant financial losses

Conclusion

• The Adjudicating Authority's confirmation of attachment under PMLA signifies a critical step in the legal process involving suspected money laundering activities, with profound implications for both the accused and the properties involved.

Must Read Articles:

Enforcement Directorate

Prevention of Money Laundering Act 2002 (PMLA)

Source:

Indian Express

PRACTICE QUESTION Q. The Prevention of Money Laundering Act (PMLA) grants the Enforcement Directorate (ED) significant powers to investigate and attach assets. However, concerns exist regarding the potential misuse of these powers. How can India effectively balance the need to combat money laundering with ensuring due process and protection of individual rights?