Section 21 the Prevention of Money- Laundering Act,
Section 21 of the Prevention of Money-Laundering Act, 2002 (PMLA)
Text of Section 21:
Attachment of property
If the Director or any officer authorized by the Director has reason to believe that any person is in possession of any property involved in money-laundering, the Director may provisionally attach such property.
The attachment shall be made by an order in writing, specifying the grounds of attachment.
The attachment shall be for a period of one hundred and eighty days from the date of the order or until the attachment is confirmed or annulled by the Adjudicating Authority.
The person interested in such property shall be given a reasonable opportunity of being heard.
Explanation:
Section 21 empowers the Director (ED) or an authorized officer to provisionally attach property suspected to be involved in money laundering.
This is a preventive measure to stop the transfer, sale, or destruction of such property before confiscation proceedings are complete.
The provisional attachment is temporary (180 days max) and must be confirmed by the Adjudicating Authority to become final.
Due process requires giving a reasonable opportunity to the person affected to be heard.
Key Features:
| Aspect | Description |
|---|---|
| Purpose | Provisional attachment of property involved in money laundering |
| Who can attach | Director or authorized officer |
| Duration | 180 days or until confirmation/revocation |
| Procedure | Written order with reasons; hearing opportunity |
| Effect | Freezes property to prevent its alienation |
⚖️ Relevant Case Law:
1. Ketan Desai v. Directorate of Enforcement, (2006) 4 SCC 1
Held that provisional attachment must be based on "reason to believe" supported by material.
Emphasized procedural fairness in issuing attachment orders.
2. Dinesh Kumar Garg v. Enforcement Directorate, (2020) SCC OnLine Del 5404
Reinforced the requirement for specific grounds and reasons while ordering attachment.
Held that attachment should not be arbitrary or oppressive.
3. Jaswant Singh Chudasama v. Enforcement Directorate, (2020) SCC OnLine SC 423
Clarified that provisional attachment under Section 21 is only temporary and subject to confirmation.
The attachment cannot be treated as final confiscation.
📌 Summary:
Section 21 PMLA allows the temporary freezing of property suspected to be proceeds of crime.
It is a preventive, non-punitive step to safeguard assets.
Requires written order, valid reasons, and a hearing before attachment.
Attachment lasts for a maximum of 180 days, subject to confirmation or cancellation.
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