🌐 Introduction

The Prevention of Money Laundering Act, 2002 (PMLA) serves as India’s primary legislation against financial crimes linked to money laundering. Beyond investigation and confiscation, the Act also outlines important provisions relating to appeals, vesting of confiscated property, and obligations of financial institutions.

Sections 9, 10, 12, and 26 of the PMLA detail how aggrieved parties can seek remedies through appeals, how tainted properties vest in the Central Government, and the compliance responsibilities of banks and intermediaries. These safeguards and obligations ensure that the enforcement process remains just, transparent, and backed by a proper mechanism for grievance redressal and accountability.

📝Appeals to the Appellate Tribunal (Section 26)

👤 Who can appeal:

• The Director or any person aggrieved by an order of the Adjudicating Authority.
• A reporting entity aggrieved by an order of the Director, FIU-IND under Section 13(2)

⏳ Filing period:

• Appeals must be filed within 45 days from the receipt of the order.

⚖️ Powers of the Appellate Tribunal (ATMLA):

• After giving both parties an opportunity to be heard, the Tribunal can:
1. Confirm the order
2. Modify the order
3. Set aside the order

🕒 Timeframe for disposal:

• The Tribunal should aim to dispose of the appeal within six months of filing.

📌 Example:

If a bank is directed to freeze a suspicious account by the Director, FIU-IND, it can file an appeal to ATMLA within 45 days. The Tribunal will hear the bank and the Director before passing a final order.

🏛️ Vesting of Tainted Property in the Central Government (Section 9)

🏠 Confiscated property:

• When a Special Court or Adjudicating Authority orders confiscation under Section 8(5/7), Section 58B, or Section 60(2A), all rights and title of the property vest absolutely in the Central Government, free from any encumbrances.

🚫 Encumbrances or lease-holds created to defeat the Act:

• If any encumbrance or lease-hold interest was created to avoid confiscation, the authority can declare it void.
• After this, the property vests fully in the Central Government.

🗂️ Management of confiscated property (Section 10)

• The Central Government may appoint officers (minimum rank: Joint Secretary) as Administrators to manage such properties.

📌 Example:

If a laundered property has a mortgage created just before confiscation, the authority can declare the mortgage void, and the property will be managed by the appointed Administrator on behalf of the Government.

🏦Obligations of Banking Companies, Financial Institutions, and Intermediaries (Section 12)

📂 Record maintenance:

• Maintain records of all transactions for five years from the date of transaction.
• Maintain client and beneficial owner documents, account files, and business correspondence for five years after the business relationship ends or account closure, whichever is later.

🔒 Confidentiality:

• All information maintained, verified, or furnished must be kept confidential, except as required by any other law in force.

📌 Example:

A bank must keep KYC records, account statements, and transaction details of a client for five years after the account is closed. These records cannot be disclosed except under legal obligations.

Key Takeaways

1. Appeals: ATMLA provides a mechanism for quick resolution of grievances against Adjudicating Authority or FIU orders.
2. Vesting: Confiscated property vests in the Central Government, and fraudulent encumbrances can be declared void.
3. Management: Confiscated properties are managed by appointed officers ensuring proper administration.
4. Obligations of entities: Banks and financial intermediaries must maintain records for five years and keep them confidential.

🔍 Conclusion

The provisions of appeals, vesting, and obligations under PMLA, 2002 reinforce both accountability and compliance within the anti-money laundering framework. By allowing appeals, the law provides a fair remedy system; by vesting tainted property with the Central Government, it ensures that illicit gains are neutralized; and through obligations on financial institutions, it builds a robust compliance environment that prevents misuse of the financial system.

Together, these sections ensure that the enforcement of PMLA remains strong, balanced, and transparent—striking at the roots of money laundering while upholding fairness and due process.