Quick Mail

Please enter your name

Please type your message


Your captcha code looks wrong

 
Home Articles Foreign Exchange Law         Share :

Text of The Prevention of Money Laundering Bill

The Prevention of Money Laundering Bill - 1998

A

BILL

If a professional is found to have helped a money launderer or a mafia, he can get into very serious trouble.

to prevent money-laundering and to provide for confiscation of property derived from, or involvedin, money-laundering and for matters connected therewith or incidental thereto.

Be it enacted by Parliament in the Forty-ninth Year of the Republic of India as follows :-

CHAPTER I

Preliminary

1. (1) This Act may be called the Prevention of Money-laundering Act, 1998.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act.

2. In this Act, unless the context otherwise requires,-

(a) "Adjudicating Authority" means an adjudicating authority appointed under sub-section (1) of section 6;

(b) "Appellate Tribunal" means the Appellate Tribunal established under section 24;

(c) "Assistant Director" means an Assistant Director appointed under sub-section (1) of section 48;

(d) "attachment" means prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter III;

(e) "Bench" means a Bench of the Appellate Tribunal;

(f) "Chairperson" means the Chairperson of the Appellate Tribunal;

(g) "Deputy Director" means a Deputy Director appointed under sub-section (1) of section 48;

(h) "Director" or "Additional Director" or "Joint Director" means a Director or Additional Director or Joint Director, as the case may be, appointed under sub-section (1) of section 48;

(i) "financial institution" shall have the same meaning as assigned to it under clause (c) of section 45-I of the Reserve Bank of India Act, 1934;

(j) "intermediary" means a stock-broker, sub-broker, share transfer agent, banker to an issue, trustee to a trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and any other intermediary associated with securities market and registered under section 12 of the Securities and Exchange Board of India Act, 1992.

(k) "Member" means a Member of the Appellate Tribunal and includes the Chairperson;

(l) "money-laundering" has the meaning assigned to it in section 3;

(m) "notification" means a notification published in the Official Gazette;

(n) "prescribed" means prescribed by rules made under this Act;

(o) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property;

(p) "property" means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and includes instruments evidencing title to, or interest in, such property or assets, wherever located;

(q) "records" include the records maintained in the form of books or stored in a computer or such other form as may be prescribed.

(r) "Schedule" means the Schedule to this Act;

(s) "scheduled offence" means an offence specified in the Schedule;

(t) " Special Court" means Court of Session designated as Special Court under sub-section (1) of section 42;

(u) "transfer" includes sale, purchase, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien;

(v) "value" means the fair market value of any property on the date of its acquisition by any person, or if such date cannot be determined, the date on which such property is possessed by such person.

CHAPTER II

Offence of money-laundering

3. Whoever-

(a) acquires, owns, possesses or transfers any proceeds of crime;

(b) enters into any transaction which is related to proceeds of crime either directly or indirectly; or

(c) conceals or aids in the concealment of the proceeds of crime,

commits the offence of money-laundering.

4. Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees.

CHAPTER III

Attachment, adjudication and confiscation

5. (1) Where 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, on the basis of material in his possession, that-

(a) any person is in possession of any proceeds of crime;

(b) such person has been charged of having committed a scheduled offence; and

(c) 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 ninety days from the date of the order, in the manner provided in the Second Schedule to the Income-tax Act, 1961 and the Director or the other officer authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of that Schedule:

Provided that no such order of attachment shall be made unless, in relation to an offence under-

(i) 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; or

(ii) Part IV of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court.

(2) Save as otherwise provided, every order of attachment made under sub-section (1) shall cease to have effect after expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 7, whichever is earlier.

(3) 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.

(4) 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.

6. (1) The Central Government shall, by notification, appoint one or more persons not below the rank of Joint Secretary to the Government of India as Adjudicating Authority or Adjudicating Authorities to exercise the jurisdiction, powers and authority conferred on an Adjudicating Authority by or under this Act.

(2) The Central Government shall also specify in the notification referred to in sub-section (1) the matters and places in relation to which the Adjudicating Authority may exercise jurisdiction.

7. (1) On receipt of a complaint under sub-section (4) of section 5, if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3, he may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earnings or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government:

Provided that where a notice under sub-section (1) specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person:

Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property.

(2) The Adjudicating Authority shall, after-

(a) considering the reply, if any, to the notice issued under sub-section (1);

(b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf; and

(c) taking into account all relevant materials placed on record before him,

by an order record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) are involved in money-laundering:

Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering.

(3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of section 5, record a finding and such attachment-

(a) shall continue during the pendency of the proceedings relating to any scheduled offence before a court; and

(b) shall become final after the guilt of the person is proved in the trial court and order of such trial court becomes final.

(4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the attached property.

(5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the attachment of the property under sub-section (3) shall cease to have effect.

(6) Where the attachment of any property becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity to the person concerned, make an order confiscating such property.

8. Where an order of confiscation has been made under sub-section (6) of section 7 in respect of any property of a person, all the rights and title in such property shall vest absolutely in the Central Government free from all encumbrances:

Provided that where the Adjudicating Authority, after giving an opportunity of being heard to any other person interested in the property attached under this Chapter, is of the opinion that any encumbrance on the property or lease-hold interest has been created with a view to defeat the provisions of this Chapter, it may, by order, declare such encumbrance or lease-hold interest to be void and thereupon the aforesaid property shall vest in the Central Government free from such encumbrances or lease-hold interest:

Provided further that nothing in this section shall operate to discharge any person from any liability in respect of such encumbrances which may be enforced against such person by a suit for damages.

9. (1) The Central Government may, by order published in the Official Gazette, appoint as many of its officers (not below the rank of a Joint Secretary to the Government) as it thinks fit, to perform the functions of an Administrator.

(2) The Administrator appointed under sub-section (1) shall receive and manage the property in relation to which an order has been made under sub-section (6) of section 7 in such manner and subject to such conditions as may be prescribed.

(3) The Administrator shall also take such measures, as the Central Government may direct, to dispose of the property which is vested in the Central Government under section 8.

10. (1) The Adjudicating Authority shall, for the purposes of this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in respect of the following matters, namely:-

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a financial institution or a company, and examining him on oath;

(c) compelling the production of records;

(d) receiving evidence on affidavits;

(e) issuing commissions for examination of witnesses and documents, and

(f) any other matter which may be prescribed.

(2) All the persons so summoned shall be bound to attend in person or through authorised agents, as the Adjudicating Authority may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

(3) Every proceeding under this section shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code.

CHAPTER IV

Obligations of financial institutions and intermediaries

11. (1) Every financial institution and intermediary shall-

(a) maintain a record of all transactions, whether such transaction comprise of a single transaction or a series of transactions integrally connected to each other, exceed the value of twenty-five lakh rupees;

(b) furnish information of transactions referred to in clause (a) to the Commissioner of Income-tax having jurisdiction in respect of such financial institution or the intermediary, as the case may be;

(c) verify and maintain the records of the identity of all its clients, in such 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 financial institution or intermediary, as the case may be.

12. (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 be made, as he thinks fit.

(2) If the Director, in the course of any inquiry, finds that a 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, he may, by an order, levy a fine on such 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 financial institution or intermediary or person who is a party in the proceedings under that sub-section.

13. Save as otherwise provided in section 12, the 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. 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. (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-

(i) within the limits of the area assigned to him; or

(ii) 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 to,-

(i) afford him the necessary facility to inspect such records as he may require and which may be available at such place;

(ii) 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

(iii) 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-

(i) place marks of identification on the records inspected by him and make or cause to be made extracts or copies therefrom,

(ii) make an inventory of any property checked or verified by him,

(iii) record the statement of any person present in the place which may be useful for, or relevant to, any proceeding under this Act.

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

(i) has committed any act which constitutes money-laundering, or

(ii) is in possession of any proceeds of crime involved in money-laundering, or

(iii) 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-

(a) 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;

(b) 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;

(c) seize any record or property found as a result of such search;

(d) place marks of identification on such record or make or cause to be made extracts or copies therefrom;

(e) make a note or an inventory of such record or property;

(f) 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-

(a) 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; or

(b) Part IV of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court.

(2) Where any officer, upon information obtained during survey under section 15, is satisfied that any evidence shall be 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.

17. (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 any thing 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 without unnecessary delay to the nearest Gazetted Officer superior in rank to him or a Magistrate.

(3) If such a requisition is made, the authority may detain the person until he can bring him before the Gazetted officer superior in rank to him or the Magistrate referred to in sub-section (2).

(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 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-

(a) 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; or

(b) Part IV of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court.

18. (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 without unnecessary delay, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction.

19. (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 (2) 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. (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 enquiry 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 Dirtector 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. (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-

(i) such records or property belong or belongs to such person; and

(ii) the contents of such records are true.

(iii) 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-

(a) 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 Special Court, the Appellate Tribunal or the Adjudicating Authority, as the case may be, 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 by the person by whom it purports to have been so executed or attested;

(b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence.

22. 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 be presumed that remaining transactions form part of such inter-connected transactions.

23. (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 Special Court, the Appellate Tribunal or the Adjudicating Authority, as the case may be, 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. 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. (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 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 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. (1) The Appellate Tribunal shall consist of a Chairperson and two other Members.

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

(a) the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof;

(b) a Bench may be constituted by the Chairperson with one or two Members as the Chairperson may deem fit;

(c) 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;

(d) 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 the 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. (1) A person shall not be qualified for appointment as Chairperson 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-

(a) is or has been a Judge of a High Court; or

(b) has been a Member of the Indian Legal Service and has held a post in Grade I of that Service for at least three years; or

(c) 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

(d) 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. 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,-

(a) in the case of the Chairperson, the age of sixty-eight years;

(b) in the case of any other Member, the age of sixty-five years.

29. The salary and allowances payable to and the other terms and conditions of service of the Chairperson and other Members shall be 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. 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 be continued before the Appellate Tribunal from the stage at which the vacancy is filled.

31. (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 misbehaviour 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. (1) In the event of the occurrence of any vacancy in the office of the Chairperson by reason of his death, resignation or otherwise, such one of the Members as the Central Government may, by notification, authorise in this behalf, shall act as the Chairperson until the date on which a new Chairperson, appointed in accordance with 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, such one of the Members as the Central Government may, by notification, authorise in this behalf, shall discharge the functions of the Chairperson until the date on which the Chairperson resumes his duties.

33. (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. (1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 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 while trying a suit, in respect of the following matters, namely:-

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872, requisitioning any public record or document or copy of such record or document from any office;

(e) issuing commissions for the examination of witness or documents;

(f) reviewing its decisions;

(g) dismissing a representation for default or deciding it ex parte;

(h) setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and

(i) any other matter which may be prescribed.

(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 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 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.

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

(2) The Central Government or the Director may authorise one or more legal practioners 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. The Chairperson, other Members and 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.

40. 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. 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-

(i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and

(ii) 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.

CHAPTER VII

Special Courts

42. (1) The Central Government, in consultation with the Chief Justice of a High Court, shall, for trial of offence punishable under section 4 by notification designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.

(2) When trying an offence under this Act, a Special Court may also try an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973, be charged at the same trial.

43. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,-

(a) the offence punishable under section 4 shall be triable only by the Special Court constituted for the area in which the offence has been committed; or

(b) a Special Court may, upon perusal of police report of the facts which constitute an offence under this Act or upon a complaint made by an authority authorised in this behalf under this Act take cognizance of the offence for which accused is committed to it for trial.

(2) Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 and the High Court may exercise such powers including the power under clause (b) of sub-section (1) of that section as if the reference to "Magistrate" in that section includes also a reference to a "Special Court" designated under section 42.

44.(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,-

(a) every offence punishable under this Act shall be cognizable;

(b) no person accused of an offence punishable for a term of imprisonment of more than three years under this Act shall be released on bail or on his own bond unless-

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and

(ii) where the Public prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail:

Provided that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by-

(i) the Director; or

(ii) any officer of the Central or State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government.

(2) The limitation on granting of bail specified in sub-clause (i) clause (b) of sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail.

45. Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (including the provisions as to bails or bonds), shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the persons conducting the prosecution before the Special Court, shall be deemed to be a Public Prosecutor.

46. The High Court may exercise, so far as may be applicable, all the powers conferred by Chapter XXIX or XXX of the Code of Criminal Procedure, 1973, on a High Court, as if the Special Court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Court.

CHAPTER VIII

Authorities

47. There shall be the following classes of authorities for the purpose of this Act, namely:-

(a) Director or Additional Director or Joint Director,

(b) Deputy Director,

(c) Assistant Director, and

(d) such other class of officers as may be appointed for the purposes of this Act.

48. (1) The Central Government may appoint such persons as it thinks fit to be authorities for purposes of this Act.

(2) Without prejudice to the provisions of sub-section (1), the Central Government may authorise the Director or an Additional Director or a Joint Director or a Deputy Director or an Assistant Director appointed under that sub-section to appoint other authorities below the rank of an Assistant Director.

(3) Subject to such conditions and limitations as the Central Government may impose, an authority may exercise the powers and discharge the duties conferred or imposed on it under this Act.

49. (1) The Director shall, for the purposes of section 12, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 when trying a suit in respect of the following matters, namely:-

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a financial institution or a company, and examining him on oath;

(c) compelling the production of records;

(d) receiving evidence on affidavits;

(e) issuing commissions for examination of witness and documents; and

(f) any other matter which may be prescribed.

(2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act.

(3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

(4) Every proceeding under sub-section (2) and sub-section (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code.

(5) Subject to any rules made in this behalf by the Central Government, any fficer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act:

Provided that an Assistant Director or a Deputy Director shall not-

(a) impound any records without recording his reasons for so doing; or

(b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the Director.

50.(1) The authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, assigned as the case may be, to such authorities by or under this Act or the rules framed thereunder in accordance with such directions as the Central Government may issue for the exercise of powers and performance of the functions by all or any of the authorities.

(2) In issuing the directions or orders referred to in sub-section (1), the Central Government may have regard to any one or more of the following criteria, namely:- (a) territorial area;

(b) classes of persons;

(c) classes of cases; and

(d) any other criterion specified by the Central Government in this behalf.

51. The Central Government may, from time to time, issue such orders, instructions and directions to the authorities as it may deem fit for the proper administration of this Act and such authorities and all other persons employed in execution of this Act shall observe and follow such orders, instructions and directions of the Central Government:

Provided that no such orders, instructions or directions shall be issued-

(a) so as to require any authority to decide a particular case in a particular manner; or

(b) so as to interfere with the discretion of the Adjudicating Authority in exercise of his functions.

52. The Central Government may, by a special or general order, empower any officer of the Central Government or of a State Government to act as an authority under this Act.

53. The following officers are hereby empowered and required to assist the authorities in the enforcement of this Act, namely:-

(a) officers of the Customs and Central Excise Departments;

(b) officers appointed under section 5 of the Narcotic Drugs and Psychotropic Substances Act, 1985;

(c) income-tax authorities appointed under sub-section (1) of section 117 of Income-tax Act, 1961;

(d) officers of the stock exchange recognised under section 4 of the Securities Contracts (Regulation) Act, 1956;

(e) officers of the Reserve Bank of India;

(f) officers of Police;

(g) officers of enforcement appointed under section 4 of the Foreign Exchange

Regulation Act, 1973.

(h) officers of the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992;

(i) such other officers of the Central Government, State Government, local authorities or banking companies as the Central Government may, by notification, specify, in this behalf.

CHAPTER IX

MISCELLANEOUS

54. Any authority or officer exercising powers under this Act or any rules made thereunder, who,-

(a) without reasonable ground of suspicion, searches or causes to be searched any building or place; or

(b) vexatiously detains or searches or arrests any person,

shall for every such offence be liable on conviction for imprisonment for a term which may extend to three months or fine which may extend to ten thousand rupees or both.

55. Any person wilfully and maliciously giving false information and so causing an arrest or a search to be made under this Act shall on conviction be liable for imprisonment for a term which may extend to three months or fine which may extend to ten thousand rupees or both.

56. No court shall take cognizance of any offence under section 54 or section 55 except with the previous sanction of the Central Government.

57. The provisions of the Code of Criminal Procedure, 1973 shall apply, in so far as they are not inconsistent with the provisions of this Act, to arrests, searches and seizures, attachment, confiscations, investigations, prosecution and all other proceedings under this Act.

58. The Director or any other authority specified by him by a general or special order in this behalf may furnish or cause to be furnished to-

(i) any officer, authority or body performing any functions under any law relating to imposition of any tax, duty or cess or to dealings in foreign exchange, or prevention of illicit traffic in narcotic drugs and psychotropic substances; or

(ii) such officer, authority or body performing functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify by notification in the Official Gazette in this behalf,

any such information received or obtained by any authority in performance of his functions under this Act, as may, in the opinion of the Director or the other authority, be necessary for the purpose of enabling the officer, authority or body to perform his or its functions under that law.

59. No suit, prosecution or other legal proceeding shall lie against the Central Government or any authority or any other person exercising any power or discharging any functions or performing any duties under this Act for anything done in good faith or intended to be done under this Act or any rule or instruction or direction made thereunder.

60. No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons, order, document or other proceeding if such notice, summons, order, document or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.

61. Where any fine imposed on any person under section 12 is not paid within six months from the day of imposition of fine, the Director or any other officer authorised by him in this behalf may proceed to recover the amount from the said person in the same manner as prescribed in Schedule II of the Income-tax Act, 1961 for the recovery of arrears and he or any officer authorised by him in this behalf shall have all the powers of the Tax Recovery Officer mentioned in the said Schedule for the said purpose.

62. (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of and was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.

Explanation.-For the purposes of this section-

(i) "company" means any body corporate and includes a firm or other association of individuals; and

(ii) "director", in relation to a firm, means a partner in the firm.

63. The provisions of this Act shall have effect notwithstanding anything inconstent therewith contained in any other law for the time being in force.

64. (1) Where-

(a) any property of a person has been attached under section 7 and no appeal against the order attaching such property has been preferred; or

(b) any appeal has been preferred to the Appellate Tribunal, and-

(i) in a case referred to in clause (a), such person dies or is adjudicated an insolvent before preferring an appeal to the Appellate Tribunal; or

(ii) in a case referred to in clause (b), such person dies or is adjudicated an insolvent during the pendency of the appeal,

then, it shall be lawful for the legal representatives of such person or the official assignee or the official receiver, as the case may be, to prefer an appeal to the Appellate Tribunal or as the case may be, to continue the appeal before the Appellate Tribunal, in place of such person and the provisions of section 25 shall, so far as may be, apply, or continue to apply, to such appeal.

(2) Where-

(a) after passing of a decision or order by the Appellate Tribunal, no appeal has been preferred to the High Court under section 41; or

(b) any such appeal has been preferred to the High Court-

then,

(i) in a case referred to in clause (a), the person entitled to file the appeal dies or is adjudicated an insolvent before preferring an appeal to the High Court, or

(ii) in a case referred to in clause (b) the person who had filed the appeal dies or is adjudicated an insolvent during the pendency of the appeal before the high Court,

then, it shall be lawful for the legal representatives of such person, or the official assignee or the official receiver, as the case may be, to prefer an appeal to the High Court or to continue the appeal before the High court in place or such person and the provision of section 41 shall, so far as may be, apply or continue to apply to such appeal.

(3) The powers of the official assignee or the official receiver under sub-section (1) or sub-section (2) shall be exercised by him subject to the provisions of the Presidency-towns Insolvency Act, 1909 or the Provincial Insolvency Act, 1920, as the case may be.

65. No suit, prosecution or other legal proceedings shall lie against the Central Government, the Chairperson or other Member of the Appellate Tribunal, Adjudicating Authority, any authority or person or any officer or other employee of the Appellate Tribunal for anything which is in good faith done or intended to be done under this Act or any rules made thereunder.

66. (1) The Central Government may, by notification, make rules for carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing, such rules may provide for all or any of the following, namely:-

(a) the form in which records referred to in this Act may be maintained;

(b) the manner in which and the conditions subject to which the properties confiscated may be received and managed under sub-section (2) of section 9;

(c) the additional matters in respect of which the Adjudicating Authority may exercise the powers of a civil court under clause (f) of sub-section (1) of section 10;

(d) the manner in which records may be verified and maintained by financial institutions and intermediaries under clause (c) of sub-section (1) of section 11;

(e) the procedure and manner of maintaining and furnishing information under sub-section (1) of section 11 as required under section 14;

(f) the rules relating to search and seizure under sub-section (1) of section 16;

(g) the manner in which records authenticated outside India may be received under sub-section (2) of section 21;

(h) the form of appeal and the fee for filing such appeal, under sub-section (3) of section 25;

(i) the salary and allowances payable to and the other terms and conditions of service of the Chairperson and other Members of the Appellate Tribunal under section 29;

(j) the salaries and allowances and of the conditions of service of the officers and employees of the Appellate Tribunal under sub-section (3) of section 33;

(k) the additional matters in respect of which the Appellate Tribunal may exercise the powers of a civil court under clause (i) of sub-section (2) of section 34;

(l) the additional matters in respect of which the authorities may exercise powers of a civil court under clause (f) of sub-section (1) of section 49;

(m) rules relating to impounding and custody of records under sub-section (5) of section 49;

(n) any other matter which is required to be or may be prescribed.

(3) Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

67. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, do any thing not inconsistent with such provisions of this Act for the purpose of removing the difficulty:

Provided that no such order shall be made under this section after the expiry of two years from the commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.

THE SCHEDULE

[See section 2(s)]

PART I

OFFENCES UNDER THE INDIAN PENAL CODE

Section Description of offence

121 Waging, or attempting to wage war, or abetting waging of war, against the Government of India.

121A Conspiracy to commit offenses punishable by section 121 against the State.

302 Murder.

304 Culpable homicide not amounting to murder, if act by which the death is caused is done with the intention of causing death.

307 Attempt to murder.

308 Attempt to commit culpable homicide.

327 Voluntarily causing hurt to extort property, or a valuable security, or to constrain to do anything which is illegal or which may facilitate the commission of the offence.

329 Voluntarily causing grievous hurt to extract property, or a valuable security, or to constrain to do anything which is illegal or which may facilitate the commission of the offence.

364A Kidnapping for ransom, etc.

384 to 389 Offences relating to extortion.

392 to 402 Offences against property.

409 Criminal breach of trust by public servant, or by banker, merchant or agent.

418 Cheating a person whose interest the offender was bound,either by law or by legal contract, to protect.

420 Cheating and thereby dishonestly inducing delivery of property or the making the alteration or destruction of a valuable security.

467 Forgery of a valuable security, will or authority to make or tansfer any valuable security, or to receive any money, etc.

477A Falsification of accounts.

489A Counterfeiting currency notes or bank notes.

489B Using as genuine, forged or counterfeit currency notes or bank notes.

PART II

OFFENCES UNDER THE IMMORAL TRAFFIC (PREVENTION) ACT, 1956

Section

Description of offence

5 Procuring, inducing or taking person for the sake of prostitution.

6 Detaining a person in premises where prostitution is carried on.

8 Seducing or soliciting for purpose of prostitution.

9 Seduction of a person in custody.

PART III

OFFENCES UNDER THE ARMS ACT, 1959.

Section

Description of offence

25 To manufacture, sell, transfer, convert, repair or test or prove or expose or offer for sale or transfer or to have in possession for sale, transfer, conversion, repair, test or proof, any arms or amunition in contravention of section 5 of the Arms Act, 1959.

26 To acquire, have in possession or carry any prohibited arms or prohibited ammunition in contravention of section 7 of the Arms Act, 1959.

27 Contravention of section 24A of the Arms Act, 1959 relating to prohibition as to possession of notified arms in disturbed areas, etc.

28 Contravention of section 24B of the Arms Act, 1959 relating to prohibition as to carrying of notified arms in or through public places in disturbed areas.

29 To do any act in contravention of any provisions of section 3,4,10 or 12 of the Arms Act, 1959 in such manner as specified in sub-section (1) of section 26 of the said Act.

30 To do any act in contravention of any provisions of section 5, 6, 7 or 11 of the Arms Act, 1959 in such manner as specified in sub-section (2) of the section 26 of the said Act.

31 Use of arms or ammunitions in contravention of section 5 or use of any arms or ammunition in contravention of section 7 of the Arms Act, 1959.

32 Use and possession of fire arms or imitation fire arms in certain cases.

33 Knowingly purchasing arms from unlicensed person or for delivering arms, etc., to person not entitle to posses the same.

34 Contravention of any condition of a licence or any provisions of the Arms Act, 1959 or any rule made thereunder.

PART IV

OFFENCES UNDER THE NARCOTIC DRUGS AND PSYCHOTROPIC

SUBSTANCES ACT, 1985.

Section

Description of offence

15 Contravention in relation to poppy straw.

18 Contravention in relation to opium poppy and opium.

20 Contravention in relation to cannabis plant and cannabis.

22 Contravention in relation to psychotropic substances.

23 Illegal import into India, export from India or transhipment of narcotic drugs and psychotropic substances.

24 External dealings in narcotic drugs and psychotropic substances in contravention of section 12 of the Narcotic Drugs and Psychotropic Substances Act, 1985.

25A Contravention of orders made under section 9A of the Narcotic Drugs and Psychotropic Substances Act, 1985.

27A Financing illicit traffic and harbouring offenders.

29 Abetment and criminal conspiracy.

PART V

OFFENCES UNDER THE PREVENTION OF CORRUPTION ACT, 1988

Section

Description of offence

7 Public servant taking gratification other than legal remuneration in respect of an official Act.

8 Taking gratification in order, by corrupt or illegal means, to influence public servant.

9 Taking gratification for exercise of personal influence, with public servant.

10 Abetment by public servant of offenses defined in section 8 or section 9 of the Prevention of Corruption Act, 1988.

STATEMENT OF OBJECTS AND REASONS

It is being realised, world over, that money-laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. Some of the initiatives taken by the international community to obviate such threat are outlined below:-

(i) The United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substance, to which India is a party, calls for Preventing of laundering of proceeds of drug crimes and other connected activities and confiscation of proceeds derived from such offence.

(ii) The BASLE Statement of principles, enunciated in 1989, outlined basic policies and procedures that banks should follow in order to assist the law enforcement agencies in tackling the problem of money laundering.

(iii) The Financial Action Task Force established at the summit of seven major industrial nations, held in Paris from 14 to 16 July, 1989, to examine the problem of money laundering has made forty recommendations, which provide the foundation material for comprehensive legislation to combat the problem of money laundering. The recommendations were classified under various heads. Some of important heads are-

(i) declaration of laundering of monies earned through serious crimes,a criminal offence;

(ii) to work out modalities of disclosure by financial institutions regarding reportable transactions;

(iii) confiscation of the proceeds of crime;

(iv) declaring money laundering to be an extraditable offence; and

(v) promoting international co-operation in investigation of money-laundering.

(iv) The Political Declaration and Global Programme of Action adopted by United Nations General Assembly by its Resolution No.S-17/2 of 23rd February, 1990, inter-alia, calls upon the member States to develop mechanism to prevent financial institutions from being used for laundering of drug related money and enactment of legislation to prevent such laundering.

(v) The United Nations in the Special Session on Countering World Drug Problem Together concluded on 8th to 10th June, 1998 has made another declaration regarding the need to combat Money Laundering to which India is a signatory.

2. In view of the above, there is an urgent need for the enactment of a comprehensive legislation providing, inter-alia, for preventing money-laundering and connected activities, confiscation of proceeds of crime, setting up of agencies and mechanisms for co-ordinating measures necessary for combating money-laundering, etc.

3. The Bill seeks to achieve the above objects.

New Delhi; Yashwant Sinha.

The July, 1998.

FINANCIAL MEMORANDUM

The following clauses of the Bill involved expenditure on the part of the Central Government, namely:-

Clause 6.- sub-clause (1) empowers the Central Government to appoint one or more persons not below the rank of Joint Secretary to the Government of India as Adjudicating or Adjudicating Authorities. Clause 24 empowers the Central Government to establish an Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority. Clause 33 empowers the Central Government to provide the Appellate Tribunal with such officers and employees as that Government may deem fit. Sub-clause (1) of clause 48 empowers the Central Government to appoint such persons as it thinks fit to be authorities for purposes of proposed Act.

To begin with, it is proposed to constitute three Benches of the Appellate Tribunal at Delhi, Mumbai and Chennai. It is also proposed to appoint for each Bench of the Appellate Tribunal one officer to the rank of Joint Secretary to the Government of India, two Directors and four Assistant Director with necessary staff and employees to assist such Bench. For establishing the Directorate of Money-laundering, it is proposed to appoint one Director in the rank of Special Secretary to Government of India and other authorities of appropriate ranks with necessary supporting staff and employees to assist the Director in discharge of his duties. It is also proposed to appoint four Adjudicating Authorities each in Delhi, Calcutta, Chennai and Mumbai with necessary officers, staff and employees to assist them in discharge of their duties.

The recurring expenditure for the aforesaid appointment in respect of salaries, wages and offices expenses etc., is estimated to be Rs. per annum. The non-recurring expenditure in respect of office equipment, office furniture, electrical installation and motor vehicles, etc., is estimated to be Rs. per annum. The Bill does not involve any other recurring or non-precurring expenditure.

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 66 of the Bill empowers the Central Government to make rules, by notification in Official Gazette for carrying out the provisions of the proposed Act. Such rules may provide, inter-alia, for form in which records referrred in the proposed Act may be maintained, the manner in which and the conditions subject to which the properties confiscated may be received and managed under sub-section (2) of the proposed section 9, the additional matter in respect of which the Adjudicating Authority may excise the powers of a civil court under clause (1) of sub-section (1) of the proposed section 10, the manner in which records may be verified and maintained by financial institutions and intermediaries under clause (c) of sub-section (1) of proposed section 11, the procedure and manner of maintaining and furnishing information under sub-section (1) of section 11 as required under proposed section 14,

the rules relating to search and seizure under sub-section (1) of proposed section 16,

the manner in which records authenticated outside India may be received under sub-section (2) of proposed section 21, the form of appeal and the fee for filing such appeal, under sub-section (3) of proposed section 25, the salary and allowances payable to and the other terms and conditions of service of the Chairperson and other Members of the Appellate Tribunal under proosed section 29, the salaries and allowances and of the conditions of service of the officers and employees of the Appellate Tribunal under sub-section (3) of proposed section 33, the additional matters in respect of which the Appellate Tribunal may exercise the powers of a civil court under clause (i) of sub-section (2) of proposed section 34, the additional matters in respect of which the authorities may exercise powers of a civil court under clause (f) of sub-section (1) of proposed section 49, rules relating to impounding and custody of records under sub-section (5) of proposed section 49 and any other matter which is required to be or may be prescribed.

The matter in respect of which the aforesaid rules may be made or generally matters of procedure and administrative detail and it is not practicable to provide for them in the Bill itself. The delegation of legislative power is, therefore, of a normal character.