Code:
(1) The Court may, after considering the explanation, if any, to the show-cause
notice issued under section 119 and the material available before it and after giving to the
person affected (and in a case where the person affected holds any property specified in the
notice through any other person, to such other person also) a reasonable opportunity of
being heard, by order, record a finding whether all or any of the properties in question are
proceeds of crime:
Provided that if the person affected (and in a case where the person affected holds
any property specified in the notice through any other person such other person also) does
not appear before the Court or represent his case before it within a period of thirty days
specified in the show-cause notice, the Court may proceed to record a finding under this
sub-section ex parte on the basis of evidence available before it.
(2) Where the Court is satisfied that some of the properties referred to in the
show-cause notice are proceeds of crime but it is not possible to identify specifically such
properties, then, it shall be lawful for the Court to specify the properties which, to the
best of its judgment, are proceeds of crime and record a finding accordingly under
sub-section (1).
(3) Where the Court records a finding under this section to the effect that any property
is proceeds of crime, such property shall stand forfeited to the Central Government free
from all encumbrances.
(4) Where any shares in a company stand forfeited to the Central Government under
this section, then, the company shall, notwithstanding anything contained in the Companies
Act, 2013 or the Articles of Association of the company, forthwith register the Central
Government as the transferee of such shares.
Explanation:
This section outlines the process for a court to declare property as proceeds of crime and order its forfeiture to the Central Government.
Procedure:
- Show-Cause Notice (Section 119): The court issues a notice to the person allegedly holding the proceeds of crime, giving them an opportunity to explain why the property should not be declared as such.
- Hearing: The court will hear the person affected and any other relevant parties, providing a chance to present evidence and arguments.
- Finding: Based on the evidence and arguments, the court decides whether the property is indeed proceeds of crime.
- Ex Parte Decision: If the person affected fails to appear within the specified time, the court can proceed ex parte based on the available evidence.
- Partial Forfeiture: Th court cannot specifically identify all the proceeds of crime. Hence, it can declare a portion of the property as proceeds of crime.
- Forfeiture: The property is declared as proceeds of crime. Then, it is forfeited to the Central Government, free of any encumbrances.
- Shares in a Company: If shares in a company are forfeited, the company must register the Central Government as the new owner of the shares.
Illustration:
Suppose a person is accused of laundering money earned through drug trafficking. The authorities suspect that the person purchased a luxury car with the proceeds of crime. The court, after following the procedure outlined in Section 120, could declare the car as proceeds of crime. It can order its forfeiture to the Central Government.
Common Questions and Answers:
- Q: Who can initiate the process of declaring property as proceeds of crime?
A: The process can be initiated by law enforcement agencies like the police or the Enforcement Directorate.
- Q: What happens to the property after it is forfeited?
A: The Central Government has the authority to dispose of the forfeited property. It could include selling it and utilizing the proceeds for public purposes.
- Q: Can the person whose property is forfeited appeal the court’s decision?
A: Yes, the person affected has the right to appeal the court’s decision through the appropriate legal channels.
