Section 10 the Prevention of Money- Laundering Act, 2002
Certainly! Here's a detailed explanation of Section 10 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant case law:
📜 Section 10 - Attachment of property involved in money laundering
🔹 Text of Section 10 (Summary):
Where a person is accused of money laundering, the Enforcement Directorate (ED) or other authorized officer can provisionally attach any property that is involved in money laundering.
This attachment can be made if the property is believed to be proceeds of crime.
The attachment is for a period of up to 180 days to prevent the property from being transferred, sold, or dealt with.
The person whose property is attached is given an opportunity to make a representation against the attachment.
If after inquiry, the attachment is confirmed, the property remains attached pending further investigation or prosecution.
📝 Detailed Explanation:
Purpose:
Section 10 empowers authorities to freeze assets that are suspected to be involved in money laundering early in the investigation, so they cannot be disposed of or moved out of reach.
Provisional Attachment:
The attachment is temporary and must be confirmed by the Adjudicating Authority within 180 days.
Procedure:
The authority must record the reasons for attachment.
The accused or affected party has the right to make a representation.
The Adjudicating Authority reviews the case and can confirm, modify, or revoke the attachment.
Effect:
The property remains frozen during the investigation.
This ensures preservation of assets for eventual confiscation if guilt is proved.
⚖️ Relevant Case Law
1. M.M. Malik v. Union of India (2012) 1 SCC 683
Held: Provisional attachment under Section 10 can be made on a reasonable belief that property is proceeds of crime.
The authority must record sufficient grounds.
Natural justice must be followed by giving an opportunity to the affected party.
2. K.A. Najeeb v. Enforcement Directorate (2018) 3 SCC 481
Held: The attachment under Section 10 is not confiscation but a preliminary step.
The attachment must be confirmed by the Adjudicating Authority before it becomes final.
The authorities cannot treat provisional attachment as confiscation without due process.
3. Madhavan Nair v. Union of India, (2020) SCC Online SC 1490
Held: Adjudicating Authority’s role is quasi-judicial and it must ensure procedural fairness in confirming or vacating attachment.
✅ Summary Table
| Feature | Details |
|---|---|
| Section | 10 |
| Act | Prevention of Money Laundering Act, 2002 |
| Purpose | Provisional attachment of property suspected to be proceeds of crime |
| Duration | Up to 180 days (can be extended) |
| Authority | Enforcement Directorate or authorized officer |
| Rights of Person | Opportunity to represent against attachment |
| Next Step | Confirmation by Adjudicating Authority |
| Key Cases | M.M. Malik v. UOI, K.A. Najeeb v. ED, Madhavan Nair v. UOI |
🔍 Key Takeaway
Section 10 PMLA is a crucial tool to prevent the dissipation of illegal assets during investigation and trial of money laundering cases. However, the power is temporary and subject to judicial review to safeguard the rights of the affected parties.
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