Section 8 of PMLA : Section 8: Adjudication

Explanation using Example

A businessman, Mr. Sharma, is suspected of engaging in money laundering activities. The Enforcement Directorate (ED) believes that he has been using his import-export business to launder money by over-invoicing imports. The ED attaches one of Mr. Sharma's properties under Section 5 of the Prevention of Money-Laundering Act, 2002.

Under Section 8(1) of the Act, the Adjudicating Authority issues a notice to Mr. Sharma, giving him 30 days to show the legitimate sources of his income and assets and to explain why the attached property should not be declared as proceeds of crime and confiscated.

Mr. Sharma submits a reply to the notice, claiming that the property was purchased with legitimate earnings from his business. The Authority, after considering his reply, hearing his arguments, and examining all relevant materials, decides under Section 8(2) and (3) that the property is indeed involved in money laundering and confirms the attachment.

The case goes to trial, and the Special Court finds Mr. Sharma guilty of money laundering. As per Section 8(5), the Court orders that the attached property, being involved in money laundering, shall be confiscated to the Central Government.

However, if Mr. Sharma had been found not guilty, or if the property was found not to be involved in money laundering, Section 8(6) would apply, and the Court would order the release of the property to Mr. Sharma.