Home » Acts & Regulations » The Prevention Of Money Laundering Bill Act

CHAPTER IV

Obligations of Banking Companies, Financial Institutions and Intermediaries

11. Banking Companies, Financial Institutions and intermediaries to maintain records

(1) Every banking company or financial institution and Intermediary shall-

1. maintain a record of all transactions, the nature and value of which may be prescribed, whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other, and where such series of transactions take place within a month;
2. furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed;
3. verify and maintain the records of the identity of all its clients, in such a manner as may be prescribed.

(2) The records referred to in sub-section (1) shall be maintained for a period of five years from the date of cessation of the transactions between the clients and the banking company or financial institution or intermediary, as the case may be.

12. Powers of Director to impose fine

(1) The Director may, either of his own motion or on an application made by any authority, officer or person, call for records referred to in sub-section (1) of section 11 and may make such inquiry or cause such inquiry to he made, as he thinks fit.

(2) If the Director, in the course of any inquiry, finds that a banking company, financial institution or an intermediary or any of its officers has failed to maintain, or, retain records in accordance with the provisions contained in section 11, then without prejudice to any other action that may be taken under any other provisions of this Act, be may, by an order, levy a fine on such banking company or financial institution or intermediary which shall not be less than ten thousand rupees but may extend to one lakh rupees.

(3) The Director shall forward a copy of the order passed under sub-section (2) to every banking company, financial institution or intermediary or person who is a party to the proceedings under that subsection.

13. No civil proceedings against banking companies, financial institutions, etc., in certain cases

Save as otherwise provided in section 12, the banking companies, financial institutions, intermediaries and their officers shall not be liable to any civil proceedings against them for furnishing information under clause (b) of sub-section (1) of section 11.

14. Procedure and manner of furnishing information by banking company, financial institution and intermediary

The Central Government may, in consultation with the Reserve Bank of India, prescribe the procedure and the manner of maintaining and furnishing information under sub-section (1) of section 11 for the purpose of implementing the provisions of this Act.

CHAPTER V

Summons, Searches and Seizures, etc.

15. Power of survey

(1) Notwithstanding anything contained in any other provisions of this Act, where an authority has reason to believe that an offence under section 3 has been committed, he may enter any place-

1. within the limits of the area assigned to him; or
2. in respect of which he is authorised for the purposes of this section by such other authority, who is assigned the area within which such place is situated,

at which any act constituting the commission of such offence is carried on, and may require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, such act so as to-

1. afford him the necessary facility to inspect such records as he may require and which may be available at such place;
2. afford him the necessary facility to check or verify the proceeds of crime or any transaction related to proceeds of crime which may be found therein; and
3. furnish such information as he may require as to any matter which may be useful for, or relevant, to any proceedings under this Act.

Explanation.-For the purposes of this sub-section, a place, where an act which constitutes the commission of the offence is carried on, shall also include any other place, whether any activity is carried on therein or not, in which the person carrying on such activity states that any of his records or any part of his property relating to such act are or is kept.

(2) An authority acting under this section may;-

1. place marks of identification on the records inspected by him and make or cause to be made extracts or copies therefrom,
2. make an inventory of any property checked or verified by him, and
3. record the statement of any person present in the place which may be useful for, or relevant to, any proceeding under this Act.

16. Search and Seizure

(1) Where the Director, on the basis of information in his possession, has reason to believe that any person;-

1. has committed any act which constitutes money-laundering, or
2. is in possession of any proceeds of crime involved in money-laundering, or
3. is in possession of any records relating to money-laundering,

then, subject to the rules made in this behalf, he may authorise any officer subordinate to him to-

1. enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept;
2. break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available;
3. seize any record or property found as a result of such search;
4. place marks of identification on such record or make or cause to be made extracts or copies therefrom;
5. make a note or an inventory of such record or property;
6. examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act:

Provided that no search shall be conducted unless, in relation to an offence under-

1. Part I, Part II, Part III or Part V of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or
2. Part IV of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).

(2) Where an authority, upon information obtained during survey under section 15, is satisfied that any evidence shall he or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing, enter and search the building or place where such evidence is located and seize that evidence:

Provided that no authorisation referred to in sub-section (1) shall be required for search under this sub-section.

The authority seizing any record or property under this section shall within a period of thirty days from such seizure, file an application, requesting for retention of such record or property, before the Adjudicating Authority.

17. Search of persons

(1) If an authority, authorised in this behalf by the Central Government by general or special order, has reason to believe that any person has secreted about his person or in anything under his possession, ownership or control any record or proceeds of crime which may be useful for or relevant to any proceedings under this Act, he may search that person and seize such record or property which may be useful for or relevant to any proceedings under this Act.

(2) Where an authority is about to search any person, he shall, if such person so requires, take such person within twenty-four hours to the nearest Gazetted Officer superior in rank to him or a Magistrate:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey undertaken to take such person to the nearest Gazetted Officer, superior in rank to him, or Magistrate's Court.

(3) If the requisition under sub-section (2) is made, the authority shall not detain the person for more than twenty-four hours prior to taking him before the Gazetted Officer superior in rank to him or the Magistrate referred to in that sub-section:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of detention to the office of the Gazetted Officer, superior in rank to him, or the Magistrate's Court.

(4) The Gazetted Officer or the Magistrate before whom any such person is brought shall, if he sees no reasonable ground for search, forthwith discharge such person but otherwise shall direct that search be made.

(5) Before making the search under sub-section (1) or sub-section (4) the authority shall call upon two or more persons to attend and witness the search, and the search shall be made in the presence of such persons.

(6) The authority shall prepare a list of record or property seized in the course of the search and obtain the signatures of the witnesses on the list.

(7) No female shall be searched by any one excepting a female.

(8) The authority shall record the statement of the person searched under sub-section (1) or sub-section (4) in respect of the records or proceeds of crime found or seized in the course of the search:

Provided that no search of any person shall be made unless, in relation to an offence under-

1. Part I, Part II, Part III or Part V of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or
2. Part IV of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).

(9) The authority seizing any record or property under section (1) shall, within a period of thirty days from such seizure, file an application requesting for retention of such record or property, before the Adjudicating Authority.

18. Power to arrest

(1) if the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Government by general or special order, has reason to believe that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(2) Every person arrested under sub-section (1) shall within twenty-four hours, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Magistrate's Court.

19. Retention of property

(1) Where any property has been seized under section 16 or section 17, and the officer authorised by the Director in this behalf has reason to believe that such property is required to be retained for the purposes of adjudication under section 7, such property may be retained for a period not exceeding three months from the end of the month in which such property was seized.

(2) On expiry of the period specified in sub-section (1), the property shall be returned to the person from whom such property was seized unless the Adjudicating Authority permits retention of such property beyond the said period.

(3) The Adjudicating Authority, before authorising the retention of such property beyond the period specified in sub-section (1), shall satisfy himself that the property is prima facie involved in money-laundering and the property is required for the purposes of adjudication under section 7.

(4) After passing the order of confiscation under sub-section (6) of section 7, the Adjudicating Authority shall direct the release of all properties other than the properties involved in money-laundering to the person from whom such properties were seized.

(5) Notwithstanding anything contained in sub-section (4), the Director or any officer authorised by him in this behalf may withhold the release of any property until filing of appeal under section 25 or forty-five days from the date of order under sub-section (4), whichever is earlier, if he is of the opinion that such property is relevant for the proceedings before the Appellate Tribunal.

20. Retention of records

(1) Where any records have been seized under section 16 or section 17, and the Investigating Officer or any other officer authorised by the Director in this behalf has reason to believe that any of such records are required to be retained for any inquiry under this Act, he may retain such records for a period not exceeding three months from the end of the month in which such records were seized.

(2) On expiry of the period specified under sub-section (1), the records shall be returned to the person from whom such records were seized unless the Adjudicating Authority permits retention of such records beyond the said period.

(3) The Adjudicating Authority, before authorising the retention of such records beyond the period mentioned in sub-section (1), shall satisfy himself that the records are required for the purposes of adjudication under section 7.

(4) After the passing of an order of confiscation under sub-section (6) of section 7, the Adjudicating Authority shall direct the release of the records to the person from whom such records were seized.

(5) Notwithstanding anything contained in sub-section (4), the Director or any officer authorised by him in this behalf may withhold the release of any records until filing of appeal under section 25 or after forty-five days from the date of order under sub-section (4), whichever is earlier, if he is of the opinion that such records are relevant for the proceedings before the Appellate Tribunal.

21. Presumption as to records or property in certain cases

(1) Where any records or property are or is found in the possession or control of any person in the course of a survey or a search, it shall be presumed that-

1. such records or property belong or belongs to such person;
2. the contents of such records are true; and
3. the signature and every other part of such records which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a record, stamped, executed or attested, that it was executed or attested by the person by whom it purports to have been so stamped, executed or attested.

(2) Where any records have been received from any place outside India, duly authenticated by such authority or person and in such manner as may be prescribed, in the course of proceedings under this Act, the Special Court, the Appellate Tribunal or the Adjudicating Authority, as the case may be, shall;-

1. presume, that the signature and every other part of such record, which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person's handwriting; and in the case of a record executed or attested, that it was executed or attested b the person by whom it purports to have been so executed or attested;
2. admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence.

22. Presumption in inter-connected transactions

Where money-laundering involves two or more inter-connected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under section 7, it shall unless other-wise proved to the satisfaction of the Adjudicating Authority be presumed that the remaining transactions form part of such inter-connected transactions.

23. Presumption of culpable mental state

(1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.

Explanation.-In this sub-section, "culpable mental state" includes intention, motive, knowledge of a fact and belief in, or reason to believe, a fact.

(2) For the purpose of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when, its existence is established by a preponderance of probability.

CHAPTER VI

Appellate Tribunal

24. Establishment of Appellate Tribunal

The Central Government shall, by notification, establish an Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority and the authorities under this Act.

25. Appeals to Appellate Tribunal

(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal.

(2) Any banking company, financial institution or intermediary aggrieved by any order of the Director made under sub-section (2) of section 12, may prefer an appeal to the Appellate Tribunal.

(3) Every appeal preferred under sub-section (1) or sub-section (2) shall be filed within a period of forty-five days from the date on which a copy of the order made by the Adjudicating Authority or Director is received and it shall be in such form and be accompanied by such fee as may be prescribed:

Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.

(4) On receipt of an appeal under sub-section (1), or sub-section (2), the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.

(5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Adjudicating Authority or the Director, as the case may be.

(6) The appeal filed before the Appellate Tribunal under sub-section (1) or sub-section (2) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of filing of the appeal.

26. Composition, etc., of Appellate Tribunal

(1) The Appellate Tribunal shall consist of a Chairperson and two other Members.

(2) Subject to the provisions of this Act,-

1. the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof;
2. a Bench may be constituted by the Chairperson with one or two Members as the Chairperson may deem fit;
3. the Benches of the Appellate Tribunal shall ordinarily sit at New Delhi and at such other places as the Central Government may, in consultation with the Chairperson, by notification specify;
4. the Central Government shall, by notification, specify the areas in relation to which each Bench of the Appellate Tribunal may exercise jurisdiction.

(3) Notwithstanding anything contained in sub-section (2), the Chairperson may transfer a Member from one Bench to another Bench.

(4) If at any stage of hearing of any case or matter it appears to the Chairperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be referred to him for transfer, to such Bench as the Chairperson may deem fit.

27. Qualifications for appointment

(1) A person shall not be qualified for appointment as Chair-person unless he is or has been a Judge of the Supreme Court or of a High Court.

(2) A person shall not be qualified for appointment as a Member unless he--

1. is or has been a Judge of a High Court; or
2. has been a Member of the Indian Legal Service and has held a post in Grade 1 of that Service for at least three years; or
3. has been a member of the Indian Revenue Service and has held the post of Commissioner of Income-tax or equivalent post in that Service for at least three years; or
4. has been a member of the Indian Economic Service and has held the post of Joint Secretary or equivalent post in that Service for at least three years.

(3) No sitting Judge of the Supreme Court or of a High Court shall be appointed under this section except after consultation with the Chief Justice of India.

28. Term of office

The Chairperson and every other Member shall hold office as such for a term of five years from the date on which he enters upon his office:

Provided that no Chairperson or other Member shall hold office as such after he has attained,-

1. in the case of the Chairperson, the age of sixty-eight years;
2. in the case of any other Member, the age of sixty-five years.

29. Conditions of service

The salary and allowances payable to and the other terms and conditions of service of the Chairperson and other Members shall he such as may be prescribed:

Provided that neither the salary and allowances nor the other terms and conditions of service of the Chairperson or any other Member shall be varied to his disadvantage after appointment.

30. Vacancies

If, for reason other than temporary absence, any vacancy occurs in the office of the Chairperson or any other Member, then the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may he continued before the Appellate Tribunal from the stage at which the vacancy is filled.

31. Resignation and removal

(1) The Chairperson or any other Member may, by notice in writing under his hand addressed to the Central Government, resign his office:

Provided that the Chairperson or any other Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.

(2) The Chairperson or any other Member shall not be removed from his office except by an order made by the Central Government on the ground of proved misbehavior or incapacity, after an inquiry made by a person appointed by the President in which such Chairperson or any other Member concerned had been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.

32. Member to act as Chairperson in certain circumstances

(1) In the event of the occurrence of any vacancy in the office of the Chairperson by reason of his death, resignation or otherwise, the senior-most member, shall act as the Chair-person until the date on which a new Chairperson, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.

(2) When the Chairperson is unable to discharge his functions owing to absence, illness or any other cause, the senior-most member shall discharge the functions of the Chairperson until the date on which the Chairperson resumes his duties.

33. Staff of Appellate Tribunal

(1) The Central Government shall provide the Appellate Tribunal with such officers and employees as that Government may think fit.

(2) The officers and employees of the Appellate Tribunal shall discharge their functions under the general superintendence of the Chairperson.

(3) The salaries and allowances and other conditions of service of the officers and employees of the Appellate Tribunal shall be such as may be prescribed.

34. Procedure and powers of Appellate Tribunal

(1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Appellate Tribunal shall have powers to regulate its own procedure.

(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely:-

1. summoning and enforcing the attendance of any person and examining him on oath;
2. requiring the discovery and production of documents;
3. receiving evidence on affidavits;
4. subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office;
5. issuing commissions for the examination of witnesses or documents;
6. reviewing its decisions;
7. dismissing a representation for default or deciding it ex parte;
8. setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and
9. any other matter, which may be, prescribed by the Central Government.

(3) An order made by the Appellate Tribunal under this Act shall be executable by the Appellate Tribunal as a decree of civil court and, for this purpose, the Appellate Tribunal shall have all the powers of a civil court.

(4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal may transmit any order made by it to a civil court having a local jurisdiction and such civil court shall execute the order as if it were a decree made by that court.

(5) All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Indian Penal Code, 1860 (45 of 1860) and the Appellate Tribunal shall be deemed to be a civil court for the purposes of sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of 1974).

35. Distribution of business amongst Benches

Where any Benches are constituted, the Chairperson may, from time to time, by notification, make provisions as to the distribution of the business of the Appellate Tribunal amongst the Benches and also provide for the matters which may be dealt with by each Bench.

36. Power of Chairperson to transfer cases

On the application of any of the parties and after notice to the parties, and after hearing such of them as he may desire to be heard, or on his own motion without such notice, the Chairperson may transfer any case pending before one Bench, for disposal, to any other Bench.

37. Decision to be by majority

If the Members of a Bench consisting of two Members differ in opinion on any point, they shall state the point or points on which they differ, and make a reference to the Chairperson who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other Members of the Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of the Members of the Appellate Tribunal who have heard the case, including those who first heard it.

38. Right of appellant to take assistance of legal practitioner and of Government, etc., to appoint presenting officers

(1) A person preferring an appeal to the Appellate Tribunal under this Act may either appear in person or take the assistance of authorised representative of his choice to present his case before the Appellate Tribunal.

(2) The Central Government or the Director may authorise one or more authorised representatives or any of its officers to act as presenting officers and every person so authorised may present the case with respect to any appeal before the Appellate Tribunal.

39. Members, etc., to be public servants

The Chairperson, Members and other officers and employees of the Appellate Tribunal, the Adjudicating Authority, Director and the officers subordinate to him shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code, 1860 (45 of 1860).

40. Civil court not to have jurisdiction

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Director, an Adjudicating Authority or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

41. Appeal to High Court

Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such order:

Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

Explanation.-For the purposes of this section, "High Court" means-

1. the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and
2. where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.