Corporate and Economic Laws · Laws and Regulations related to Anti-Money Laundering

PMLA Authorities, Special Courts and Section 72A Committee

Updated 11 October 2026 · Fact-checked

Under the PMLA, 2002, the Central Government appoints authorities (Section 49), designates Sessions Courts as Special Courts to try money-laundering (Sections 43 and 44), and may notify an Inter-ministerial Co-ordination Committee (Section 72A). Officers can arrest on recorded reasons to believe (Section 19). Answer by naming the body, its source section, and its power.

Understand Authorities, Special Courts and Inter-ministerial Co-ordination Committee

The PMLA, 2002 does not leave enforcement to one body. It sets up three layers: officers who investigate and act, courts that try the offence, and a coordination body that aligns policy across government. Learn each layer and the section that creates it.

Authorities (Section 49). The Central Government may appoint such persons as it thinks fit to be authorities for the Act. It may also authorise the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to appoint other authorities below the rank of Assistant Director. An authority exercises its powers and duties subject to conditions and limitations the Central Government imposes.

Director's powers. Two powers in the extract are worth remembering. Under Section 13, the Director can inquire into a reporting entity's compliance with its obligations. If he finds a failure by the entity, its designated director or an employee, he can issue a written warning, direct compliance with specific instructions, direct periodic reports on corrective measures, or impose a monetary penalty. Under Section 19, the Director, Deputy Director, Assistant Director or another authorised officer can arrest a person.

Special Courts (Sections 43 and 44). The Central Government, in consultation with the Chief Justice of the High Court, designates one or more Courts of Session as Special Courts for trying the offence punishable under Section 4. A Special Court also tries any other offence the accused may be charged with at the same trial under the Code of Criminal Procedure, 1973. A Special Court can take cognizance of the money-laundering offence on a complaint by an authorised authority, without the accused being committed to it for trial. It tries cases as a Court of Session would.

Section 72A Committee. The Central Government may, by notification, constitute an Inter-ministerial Co-ordination Committee. Its job is inter-departmental and inter-agency coordination: operational co-operation, policy co-operation, consultation with the financial and other sectors, and developing and implementing AML/CFT policy. It does not investigate, arrest or try anyone.

Key rules to remember

Authorities (Section 49): Central Government appoints authorities; may authorise Director to Assistant Director rank to appoint authorities below Assistant Director; Powers are exercised subject to conditions and limitations imposed by the Central Government.
Arrest (Section 19): Reason to believe (recorded in writing) + material in possession → arrest; inform grounds; produce within 24 hours; The 24 hours exclude journey time from the place of arrest to the court. A copy of the order and material goes to the Adjudicating Authority in a sealed envelope immediately after arrest.
Director's directions on reporting entities (Section 13): Warning | specific instructions | periodic reports | penalty of ₹10,000 to ₹1,00,000 for each failure; Applies to the reporting entity, its designated director on the Board or any employee. The penalty is for each failure.
Special Courts (Sections 43-44): Court of Session designated by Central Government in consultation with Chief Justice of the High Court; Trial of the Section 4 offence and connected scheduled offence is by the Special Court for the area where the offence was committed. Trial follows Court of Session procedure.
Co-ordination Committee (Section 72A): Constituted by Central Government by notification; Purposes: operational co-operation, policy co-ordination, consultation, developing AML/CFT policy, and any other notified matter.
Interconnected transactions (Section 23): If one or more interconnected transactions are proved to involve money-laundering, the rest are presumed to be part of them unless otherwise proved; Applies for adjudication or confiscation under Section 8 or for trial. The proof is to the satisfaction of the Adjudicating Authority or Special Court.

How to solve Authorities, Special Courts and Inter-ministerial Co-ordination Committee questions

Most questions here ask who does what, under which section, and with what limit. Use this method.

1Identify the body or power the question targets: authority, arrest, penalty on reporting entity, Special Court, or Section 72A Committee.
2Recall the source section: 49, 19, 13, 43/44 or 72A.
3State the conditions in the section's own order, for example reason to believe recorded in writing before arrest.
4Apply the facts: check the rank of the officer, the timing (24 hours), the place and the nature of the offence.
5Note the safeguards: grounds of arrest, sealed envelope to the Adjudicating Authority, production before the court.
6Conclude with a clear answer, such as valid or invalid arrest, correct court, or correct penalty range.

Quickest way: Match the body to its section

When to use it: For MCQs and the short case-based questions in Paper 13 Section A.

Appoints officers: Section 49.
Arrest: Section 19, with 24 hours and written reasons.
Fine or warning to a reporting entity: Section 13, ₹10,000 to ₹1,00,000 for each failure.
Trial: Special Court (Section 43 designates, Section 44 governs the trial).
Coordination only: Section 72A, constituted by notification, no enforcement role.

Common mistakes in Authorities, Special Courts and Inter-ministerial Co-ordination Committee

Saying the Section 72A Committee investigates or prosecutes.
The word 'committee' sounds like an enforcement body.
Fix: Remember it only coordinates across departments and agencies, and shapes AML/CFT policy.
Treating the 24 hours for production before a court as including travel time.
Students remember the figure but skip the proviso.
Fix: Add that the time needed for the journey from the place of arrest to the court is excluded.
Dropping the requirement that reasons to believe be recorded in writing.
Students focus on the officer's power rather than its conditions.
Fix: Always write: material in possession, reason to believe, recorded in writing, grounds communicated.
Stating the Section 13 penalty as a single fixed amount.
Memorising only the upper limit.
Fix: State it as not less than ₹10,000 and up to ₹1,00,000 for each failure, and list the other three actions.
Saying the Special Court is a new type of court created from scratch.
The name suggests a separate court.
Fix: A Special Court is a Court of Session designated by the Central Government, in consultation with the Chief Justice of the High Court.
Saying the accused must be committed for trial before the Special Court takes cognizance.
Students apply ordinary criminal procedure.
Fix: Under Section 44, the Special Court may take cognizance on a complaint by an authorised authority without commitment.

Worked examples

Example 1

An Assistant Director of the Directorate of Enforcement has material suggesting that Mr. Rao is guilty of a PMLA offence. He arrests Mr. Rao in Nagpur at 10.00 A.M. on Monday and records his reasons for belief on file. State the procedure he must follow after the arrest.

Show the solution

Arrest power: an Assistant Director may arrest under Section 19 if, on the basis of material in his possession, he has reason to believe, recorded in writing, that the person is guilty.
Grounds: he must inform Mr. Rao of the grounds for arrest as soon as may be.
Adjudicating Authority: immediately after the arrest he must forward a copy of the order with the material to the Adjudicating Authority in a sealed envelope.
Production: Mr. Rao must be taken within 24 hours to a Special Court or a Judicial Magistrate or Metropolitan Magistrate having jurisdiction. Journey time to the court is excluded from the 24 hours.

Answer: The Assistant Director must communicate the grounds, send the order and material in a sealed envelope to the Adjudicating Authority immediately, and produce Mr. Rao before the Special Court or competent Magistrate within 24 hours, excluding journey time.

Example 2

A bank's designated director fails to comply with obligations under Chapter IV of the PMLA, and the Director, after inquiry, wants to act. Separately, a student says that the Inter-ministerial Co-ordination Committee under Section 72A can impose the penalty. Advise.

Show the solution

Section 13 lets the Director inquire into a reporting entity's obligations and, on finding failure by the entity, its designated director or any employee, act without prejudice to other action under the Act.
The Director's options are: a written warning, a direction to comply with specific instructions, a direction to send periodic reports on measures taken, or a monetary penalty.
The penalty must be at least ₹10,000 and may go up to ₹1,00,000 for each failure.
Section 72A allows the Central Government to constitute a Committee for coordination of operations and policy. It has no power to penalise.
The Director must forward a copy of the order to every banking company, financial institution, intermediary or person party to the proceedings.

Answer: The student is wrong. The penalty is imposed by the Director under Section 13, between ₹10,000 and ₹1,00,000 for each failure, or the Director may instead warn or direct. The Section 72A Committee only coordinates operations and policy.

Exam tips

Write the section number beside every power you state. Examiners reward the link between power and section.
In arrest questions, list conditions in order: material, reason to believe, written record, grounds, sealed envelope, 24 hours.
For Section 72A, list its coordination purposes and add that it is constituted by notification. Do not give it enforcement powers.
In MCQs, watch for options that swap the penalty range or change 24 hours to another period.
Use a single sentence to state the Special Court's status: a designated Court of Session trying the offence under Section 4.

Practice questions from Laws and Regulations related to Anti-Money Laundering

Authorities, Special Courts and Inter-ministerial Co-ordination Committee in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CS ProfessionalInter-ministerial Co-ordination Committee under the Companies Act, 2013

Authorities, Special Courts and Inter-ministerial Co-ordination Committee: frequently asked questions

What is Section 72A of the PMLA?

It allows the Central Government to constitute, by notification, an Inter-ministerial Co-ordination Committee. The Committee coordinates government, law enforcement agencies, the Financial Intelligence Unit, India and regulators on AML and CFT operations and policy.

Who can arrest under the PMLA?

Under Section 19, the Director, Deputy Director, Assistant Director or another officer authorised by the Central Government can arrest. The officer needs material and a reason to believe, recorded in writing, that the person is guilty of an offence under the Act.

Which court tries money-laundering cases?

The Special Court designated by the Central Government, which is a Court of Session. The offence under Section 4 and any connected scheduled offence are triable by the Special Court for the area where the offence was committed.

What can the Director do against a reporting entity that fails its obligations?

Under Section 13, after inquiry the Director may issue a written warning, direct compliance with specific instructions, direct periodic reports on measures taken, or impose a penalty of ₹10,000 to ₹1,00,000 for each failure.