Prevention of Money Laundering Act, 2002
Attachment Proceedings and Criminal Prosecution under the PMLA
A PMLA case runs on two tracks at once. One is civil: the attachment of property, its confirmation by the Adjudicating Authority, and appeals. The other is criminal: the prosecution of the person for money laundering before the Special Court. They differ in their target, forum, standard and result, and they proceed independently. But they meet at one point: the Special Court's verdict decides the final fate of the property. This note sets the two side by side.
The attachment and prosecution tracks running in parallel to the Special Court's verdict
1. The Two Tracks Compared
Basis | Attachment proceedings | Criminal prosecution |
|---|---|---|
Target | The property | The person |
Nature | Civil, in rem | Criminal, in personam |
Initiated by | Provisional attachment under s. 5; complaint to the AA | Prosecution complaint under s. 44 before the Special Court |
Forum | Adjudicating Authority; Appellate Tribunal; High Court | Special Court; High Court on appeal |
Question decided | Whether the property is involved in money laundering | Whether the accused committed money laundering |
Standard | Reason to believe; a finding on the material | Proof beyond reasonable doubt, with the s. 24 presumption |
Who may be affected | Any holder of the property, even one not accused | Only the accused |
Result | Confirmation or release: interim | Conviction and sentence, or acquittal |
Final effect on property | Depends on the prosecution's outcome | Conviction: confiscation, s. 8(5); acquittal: release, s. 8(6) |
2. Independence of the Two Tracks
§ Why they run separately • Different purposes. Attachment preserves property so that confiscation is not defeated; prosecution determines guilt. • Different persons. Attachment may reach property held by someone who is not, and may never be, an accused. • Different timing. Attachment may be made and confirmed before any prosecution complaint is filed. • Different standards. Confirmation rests on the Authority's finding on the material; conviction requires proof beyond reasonable doubt. • Vijay Madanlal Choudhary (2022). The Supreme Court described attachment and adjudication as proceedings concerning property, distinct from the criminal prosecution, and upheld them as such. |
3. Where the Tracks Meet
§ The Special Court's verdict decides the property Conviction. Under Section 8(5), the Special Court orders the property involved in money laundering to be confiscated to the Central Government. Acquittal or no laundering found. Under Section 8(6), the property is released to the person entitled. No trial possible. Under Section 8(7), where trial cannot proceed because of the accused's death, his being a proclaimed offender, or other reason, the Special Court decides on confiscation or release on application. Predicate offence ends. If the scheduled offence is quashed or ends in final discharge or acquittal, there are no proceeds of crime, and both tracks fail. |
4. Frequently Asked Questions
Are attachment proceedings criminal?
No. They concern property and are civil in nature, though their final outcome depends on the result of the criminal prosecution.
Can property be attached if the owner is not an accused?
Yes. Attachment targets proceeds of crime in anyone's hands, subject to the rights of bona fide claimants.
What happens to attached property if the accused is acquitted?
It is released to the person entitled under Section 8(6).