Attachment of property involved in money-laundering
Section 5 of the Prevention of Money-Laundering Act, 2002 deals with attachment of property involved in money-laundering. Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that-- (a) any person is in possession The Act came into force on 01 Jul 2005.
1[(1)Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that--
(a) any person is in possession of any proceeds of crime; and
(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter,
he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed:
Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country:
Provided further that, notwithstanding anything contained in 2[first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.]
3 Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted.];
(2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.
(3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under 4[sub-section (3)] of section 8, whichever is earlier.
(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment.
Explanation.--For the purposes of this sub-section, "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.
(5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority.
Section 5, The Prevention of Money-Laundering Act, 2002 (Act 15 of 2003).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Nikesh Tarachand Shah vs Union of India Ministry of Finance through Secretary Revenue
Court's Decision & Legal Precedent
Section 45(1) of the Prevention of Money Laundering Act, 2002, insofar as it imposes two further conditions for release on bail (that Public Prosecutor be given opportunity to oppose and that Court be satisfied of reasonable grounds for believing accused not guilty and not likely to commit offence while on bail), is unconstitutional as it violates Articles 14 and 21 of the Constitution of India because: (1) the classification based on sentencing of predicate offences has no rational nexus to the object of the PMLA Act which is to attach proceeds of crime and bring money laundering offenders to book; (2) the twin conditions relate to guilt of predicate offence, not money laundering offence, creating a disconnect; (3) the provision produces manifestly arbitrary results depending on whether predicate offence is in Part A or Part B of Schedule or whether person is charged with money laundering alone; (4) the provision inverts the presumption of innocence which is fundamental to criminal law; (5) the procedure is not fair, just and reasonable as required by Article 21; and (6) the provision lacks a compelling state interest justifying such drastic inroads into personal liberty.
On this section: Provides for provisional attachment of proceeds of crime to prevent concealment and frustration of proceedings
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Kalyani Transco vs M/s Bhushan Power and Steel Limited
Court's Decision & Legal Precedent
Once a Resolution Plan is duly approved by the Adjudicating Authority under Section 31(2) of the IBC, the claims as provided in the Resolution Plan stand frozen and binding on all stakeholders. Claims not part of the approved Resolution Plan or the RfRP stand extinguished, and no person can initiate proceedings for such claims. The Committee of Creditors does not become functus officio after plan approval but continues to exist until full implementation or finality of appeals, with authority to monitor and supervise implementation through a monitoring committee. The commercial wisdom of the CoC in approving a Resolution Plan is paramount and non-justiciable, and courts cannot interfere with the CoC's business decisions unless the plan violates mandatory statutory provisions or is based on extraneous considerations or is ex facie arbitrary and illegal. Delay in implementation of an approved Resolution Plan does not justify setting aside the plan unless the delay is unjustified and attributable to the SRA. Compulsorily convertible debentures are treated as equity instruments as they involve mandatory conversion without repayment obligation. EBITDA generated during CIRP cannot be claimed by creditors unless specifically provided for in the RfRP or Resolution Plan. Erstwhile promoters and directors, as personal guarantors vitally interested in the Resolution Plan's outcome, have locus standi to appeal under Sections 61 and 62 of the IBC, but their appeals must be decided on merits considering their conduct during CIRP.
On this section: ED's authority to attach assets and initiate proceedings; interaction with Section 32A of IBC regarding immunity and asset protection
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Bikram Chatterji vs Union Of India
Court's Decision & Legal Precedent
An interim operational concession exempting procedural compliance documents may be granted in public interest to complete stalled real estate projects, without extinguishing the recovery rights of public authorities.
On this section: Sale of properties attached by the Directorate of Enforcement during ongoing investigations.
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Seema Garg v. Deputy Director, Directorate of Enforcement
Court's Decision & Legal Precedent
HC Final Order order-1.pdf 2020-03-06. PMLA Appeals 1-3 of 2019. Jaswant Singh / Sant Parkash. Index date matches 6 March 2020 (generic order-1.pdf verify banner; body is the named attachment judgment). Isolates PMLA 5: provisional attachment requires recorded ‘reason to believe’ on material that the person possesses proceeds of crime likely to be concealed/transferred; equivalent-value property is not proceeds of crime unless the 2(1)(u) limbs are met; stereotyped s.5 recitals are inadequate. Do not pad PMLA 3/8/17 (already filled). Leading HC because no labelled SC s.5 merits PDF (Opto Circuit is already on pmla 17; J Sekar name-collision).
On this section: PMLA 5 provisional attachment needs recorded reasons to believe, based on material, that proceeds of crime will be concealed or transferred; pre-offence equivalent-value property is not attachable as proceeds of crime (Seema Garg, P&H). Do not pad PMLA 3/8/17.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… of the show cause notice dated 20th October, 2015, whereby they have been called to indicate the source of their income and also show cause as to why the provisional attachment order be not confirmed. 3. Learned counsel for the petitioners submits that the provisional attachment order is in flagrant violation of Section 5 of the Prevention of Money-Laundering Act, 2002 (hereinafter referred to as the "PML Act"), as he submits that no order of attachment can be made in relation to a Schedule Offence if the report under Section 173 of the Cr.P.C does not reflect the name of the petitioners. 4. He points out that the CBI in its …
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… In this Writ Petition, the Petitioner, namely, Eastern Institute for Integrated Learning in Management University, seeks to quash and set aside the show cause notice dated 03-02-2015, Annexure P/2, issued by the Respondent No.3 under Sub-Section (1) of Section 5 of the Prevention of Money-Laundering Act, 2002 (for short "PMLA") and the subsequent proceedings consequential thereto. 2. Shorn of all details, the principal ground seeking to quash the impugned show cause notice WP(Crl.) No.02 of 2015 issued under Section 8 of …
Made under this section, and citing it
1 instrument states that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Another 4 instruments name this provision in its title or its text without being made under it.
- The Prevention of Money-laundering (Restoration of Confiscated Property) Amendment Rules, 2019Rule 2019
- Adjudicating Authority (Procedure) Regulation dated 18-3-2013Regulation 2013
- The Prevention of Money-laundering (Issuance of Provisional Attachment Order) Rules, 2013Rule 2013
- The Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013Rule 2013
Questions about Section 5
What have the courts held on Section 5 of the Prevention of Money-Laundering Act?
Nikesh Tarachand Shah vs Union of India Ministry of Finance through Secretary Revenue (23 Nov 2017) is the leading judgment on this section among those set out below: Provides for provisional attachment of proceeds of crime to prevent concealment and frustration of proceedings. Another 3 judgments on this section are set out below, 3 of them from the Supreme Court. They run from 2017 to 2026.
How do I find court cases under Section 5 of the Prevention of Money-Laundering Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Pmla 5, section 5 Pmla, section 5 of the Prevention of Money-Laundering Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 4 reported judgments on this section are set out on this page, beginning with Nikesh Tarachand Shah vs Union of India Ministry of Finance through Secretary Revenue (23 Nov 2017).
What should I read with Section 5 of the Prevention of Money-Laundering Act, and has it changed?
Its own text turns on section 8 (Adjudication), so none of them can safely be read on its own. 3 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there is one: most recently Notification appointing Director of Enforcement (2005).
When did Section 5 of the Prevention of Money-Laundering Act come into force?
Section 5 of the Prevention of Money-Laundering Act, commonly called attachment of property pmla, and cited as Pmla 5, came into force on 01 Jul 2005, having been enacted on 17 Jan 2003. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions1773 words
- 8. Adjudication975 words
- 6. Adjudicating Authorities, composition, powers, etc781 words
- 73. Power to make rules704 words
- 17. Search and seizure570 words
- 60. Attachment, seizure and confiscation, etc., of property in a contracting State or India546 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.