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CS Executive · Economic, Commercial and Intellectual Property Laws · Prevention of Money Laundering

Under Section 5(1), the first proviso bars attachment unless a scheduled offence report or complaint has been filed. An officer has recorded reasons to believe that, if a property involved in money-laundering is not attached immediately, non-attachment is likely to frustrate proceedings under the Act, though no such report or complaint exists yet. What is the position?

The property can still be attached. The second proviso to Section 5(1) operates notwithstanding the first proviso, allowing attachment where the Director or an authorised officer not below Deputy Director records reasons, based on material, that non-attachment would likely frustrate proceedings under the Act.

  1. AAttachment is impossible in every case until the report or complaint is filed
  2. BThe property may be attached under the second proviso despite the first proviso, on recorded reasons based on materialCorrect
  3. COnly the Adjudicating Authority can order such attachment
  4. DAttachment is allowed only for thirty days

Explanation

The second proviso begins 'notwithstanding anything contained in the first proviso' and allows attachment of any person's property where the authorised officer, on material and with reasons recorded in writing, believes non-attachment would likely frustrate proceedings. The first option ignores this override. The Director or an officer not below Deputy Director, not the Adjudicating Authority, makes the order.

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