INDIA Law and Practice Contributed by: Vijayendra Pratap Singh, Asif Ahmed, Tanmay Sharma and Bhanu Jindal, AZB & Partners
after conclusion of the trial. Such release/resto - ration of seized property may be without condi - tions or with conditions that the claimant shall execute a bond, with or without securities, to the satisfaction of the court. New Provisions of Attachment and Forfeiture of Property Under the BNSS The powers for attachment and forfeiture of property that were available under the CrPC have been retained under Chapter VII (Sections 111–124) of the BNSS. However, in addition thereto, the newly intro - duced Section 107 BNSS also seeks to pro - vide magistrates with powers to attach property identified as “proceeds of crime” pursuant to an application by an investigating officer, giving rea - sons for believing that the property is derived or obtained from a criminal activity or commission of an offence. This is subject to the magistrate hearing the affected party. However, under Sec - tion 107(5), a magistrate is also empowered to pass an ex parte interim order of attachment. At the conclusion of such proceedings, if the mag - istrate finds that a particular property constitutes proceeds of crime, it can direct pro rata distribu - tion of such proceeds of crime to the victims of such crime. If there are no claimants for such distribution, the property shall stand forfeited to the government. Notably, the power of attachment under the BNSS comes with even fewer procedural safe - guards than those provided under the PMLA. The constitutional validity of Section 107 has been challenged before the Supreme Court of India and is presently pending adjudication. The PMLA As stated in 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts , under the
PMLA, “proceeds of crime” are defined widely and may constitute not only the property directly or indirectly obtained through fraudulent activi - ties but also its equivalent value held in India when such property is taken or held outside India. It is relevant to note that if the proceeds of crime generated from fraud as recognised in a scheduled offence have been mixed with other funds, the value of these proceeds may be identified under the enactment and may be sub - ject to seizure or attachment. This is important because it recognises that the tainted property may no longer be available. The Directorate of Enforcement (ED), which is the investigating agency under the PMLA, is entitled to attach and (where not practicable to do so) to freeze such properties derived directly or indirectly from the proceeds of crime. How - ever, the Supreme Court of India recently clari - fied that mere use of a property in the commis - sion of the predicate offence will not render said property a proceed of crime. If, upon completion of trial, the offence of money laundering is proved, such property forms part of the proceeds of crime and stands confiscated by the central government, vested free from all encumbrances. If, however, the trial results in an acquittal, the property is released to the per - sons entitled to receive it. Regardless, the spe - cial court trying the offence of money laundering is entitled to direct the government to restore the confiscated property to a bona fide claimant, who may have suffered a loss due to the offence of money laundering, at any point during or after the trial. 1.6 Rules of Pre-Action Conduct Criminal Proceedings In the case of a criminal complaint relating to fraudulent acts, there are no rules of pre-action
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