Attachment and Forfeiture: Section 18A

A conviction years after the event is of limited value if the property acquired through the offence has been sold or transferred in the meantime. Section 18A, inserted in 2018, answers that by applying the Criminal Law Amendment Ordinance, 1944 to offences under the Act, so that property may be attached during the proceedings and dealt with on conviction. The special judge exercises, for this purpose, the powers of the district judge under that Ordinance. The section operates subject to the money laundering legislation, which supplies a parallel and more frequently used machinery.

1. What Section 18A Does

1. It applies the Ordinance of 1944. The provisions of that Ordinance relating to attachment, administration of attached property and execution of orders of attachment apply to property procured by means of an offence under this Act.
2. It designates the forum. The special judge, while trying an offence under the Act, exercises all the powers and functions exercisable by a district judge under the Ordinance.
3. It is subject to the money laundering legislation. Where that statute applies, its provisions govern, which in practice means that the attachment of the proceeds of corruption is usually effected under it rather than under the Ordinance.

2. The Machinery of the Ordinance

• An application by the prosecuting authority, supported by material showing reason to believe that the person has committed a scheduled offence and has procured money or property by means of it.
• An interim order of attachment, which may be made ad interim and without notice where there is reason to believe that the property may be disposed of, followed by notice to the person concerned to show cause.
• An inquiry into the objections of the person whose property is attached and of any other person claiming an interest in it, including a claim that the property was acquired in good faith and for value.
• A final order making the attachment absolute, varying it or withdrawing it.
• Administration of the attached property pending the trial, including through a receiver where the property requires management.
• Disposal on conclusion. Where the accused is convicted, the attached property may be applied in satisfaction of the loss or of any fine imposed; where he is acquitted, the attachment is withdrawn.

3. Section 18A and the Money Laundering Legislation

The practical position is that a large corruption case now generates two sets of proceedings on the property: the criminal trial under this Act, in which attachment under Section 18A is available, and proceedings under the money laundering legislation, in which the proceeds are attached, the attachment is confirmed by the adjudicating authority, and confiscation follows a conviction by the special court under that statute. The second is used more often because the definition of proceeds of crime is wider, it reaches property of equivalent value, and the machinery is administered by a dedicated agency.

4. Why the Provision Was Needed

Before 2018 the Act contained no attachment provision of its own, and the Ordinance of 1944 applied only to the offences scheduled to it. The consequence was that property could be dissipated during the years a trial took, so that a conviction produced a sentence but no restitution. Section 18A closes that gap and reflects the principle, now accepted in Indian economic offence legislation generally, that depriving the offender of the gain matters as much as punishing him, and that the deprivation must begin while the proceedings are pending rather than at their conclusion.

5. Related Topics and Provisions