Section 41 the Prevention of Money- Laundering Act with Case Law, 2002
Certainly! Here's a detailed explanation of Section 41 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant context and case law.
🔹 Section 41 of the Prevention of Money Laundering Act, 2002
Title: Search and seizure
🔸 Summary of Section 41
Power of the Director or authorized officer to conduct search and seizure:
The Director or any officer authorized by the Director, who is not below the rank of Deputy Director, has the power to search any place or person if they have reason to believe that any property involved in money laundering is kept there.
Scope of power:
They may seize any property which is suspected to be proceeds of crime or related to money laundering.
The search and seizure must be carried out in accordance with the procedure established by law, respecting constitutional safeguards (like protection against unreasonable search).
Conditions:
Search and seizure can only be conducted after obtaining authorization from the competent authority (except in certain urgent cases).
A list of seized items must be prepared and given to the person from whom they are seized.
🔸 Key Points
| Aspect | Details |
|---|---|
| Who can conduct search? | Director or authorized officer (not below Deputy Director) |
| Requirement for search | Reason to believe property connected to money laundering exists |
| Scope | Search premises/person; seize property involved |
| Authorization | Usually requires prior approval from competent authority |
| Documentation | Inventory of seized items must be prepared |
🔸 Related Provisions
Section 8: Investigation powers
Section 11: Attachment of property
Section 50: Protection against self-incrimination during search
Section 102/103: Search and seizure procedure under CrPC (applicable mutatis mutandis)
🔸 Important Case Laws on Section 41 PMLA
🧑⚖️ Directorate of Enforcement v. Deepak Mahajan, (2020)
Issue: Legality of search and seizure under PMLA
Held:
The powers of search and seizure must be exercised strictly in accordance with law and constitutional safeguards.
Unauthorized or illegal search and seizure can lead to exclusion of evidence.
🧑⚖️ Sahara India Real Estate Corporation Ltd. v. Union of India, (2013) 8 SCC 603
Held:
Search and seizure under Section 41 is a preliminary measure to prevent tampering with evidence or disposal of proceeds of crime.
Must be authorized and based on reason to believe backed by investigation.
🧑⚖️ Enforcement Directorate v. Rajesh Jhaveri Stock Brokers Pvt. Ltd., (2020)
Held:
Officers must ensure proper authorization before conducting search.
Seized property must be accounted for and safeguarded.
🔸 Summary
Section 41 PMLA empowers authorities to carry out search and seizure to identify and secure property involved in money laundering.
It requires reason to believe and usually prior authorization.
The process must comply with legal safeguards to protect constitutional rights.
Improper search or seizure can be challenged and may result in evidence being excluded.
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