Sections 20 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 20 and 21 deal with what happens after property or records have been seized under section 17 or 18 or frozen under section 17(1A). The authorised officer may retain them, or keep them frozen, for a period not exceeding one hundred and eighty days if he has recorded reason to believe they are required for adjudication under section 8. On expiry they are returned unless the Adjudicating Authority permits retention beyond that period.
This article reads both sections from the consolidated text of the Act consulted (amendments shown up to 1 August 2019). Later amendments, rules and notifications should be checked; nothing after that date is stated here.
Seized or frozen property (section 20) and records (section 21) may be retained or kept frozen for not more than one hundred and eighty days from the day of seizure or freezing. On expiry they are returned unless the Adjudicating Authority permits more time after satisfying itself of what the section requires. After a confiscation or release order, the property or records are released as the section directs, and the Director may withhold release for ninety days if the item is relevant to appeal proceedings. A person from whom records were seized is entitled to obtain copies.
How the sections came about
Sections 20 and 21 were substituted for the earlier sections 20 and 21 by Act 2 of 2013, section 16 (w.e.f. 15-2-2013), as the footnote prints. Printing slip: the head of section 20 is printed "[20.Retention of property" with no space after the number; the heading is quoted as "Retention of property".
They follow the powers of search and seizure in sections 17 and 18 and connect to the adjudication in section 8. If you hold seized or frozen property or records and need to know how long they can be kept and what can be done at each stage, legal dispute resolution support can help you read the position against the text.
Section 20: retention of property
Sub-section (1): up to one hundred and eighty days
Where any property has been seized under section 17 or 18, or frozen under section 17(1A), and the officer authorised by the Director in this behalf has, on the basis of material in his possession, reason to believe (the reason to be recorded in writing) that the property is required to be retained for the purposes of adjudication under section 8, the property may, if seized, be retained, or if frozen, may continue to remain frozen, for a period not exceeding one hundred and eighty days from the day on which it was seized or frozen.
Sub-section (2): sealed envelope
The officer shall, immediately after he has passed the order for retention or continuation of freezing, forward a copy of the order with the material referred to in sub-section (1) to the Adjudicating Authority in a sealed envelope, in the manner as may be prescribed. The Adjudicating Authority keeps them for such period as may be prescribed. Manner and period are left to rules.
Sub-sections (3) and (4): return, or extension by the Adjudicating Authority
| Sub-section | Provision |
|---|---|
| 20(3) | On expiry of the period in sub-section (1), the property shall be returned to the person from whom it was seized, or whose property was ordered to be frozen, unless the Adjudicating Authority permits retention or continuation of freezing beyond that period |
| 20(4) | Before authorising retention or continuation beyond the period, the Adjudicating Authority shall satisfy himself that the property is prima facie involved in money-laundering and that it is required for the purposes of adjudication under section 8 |
Sub-section (4) names two matters of which the Adjudicating Authority must be satisfied: that the property is "prima facie involved in money-laundering", and that it "is required for the purposes of adjudication under section 8". The text does not say how long an extension may last, and this article gives no figure.
Sub-section (5): release after confiscation
After passing the order of confiscation under sub-section (5) or (7) of section 8, the Special Court "shall direct the release of all property other than the property involved in money-laundering to the person from whom such property was seized or the persons entitled to receive it". The words "Special Court" were substituted for "the Court or the Adjudicating Authority, as the case may be" by Act 20 of 2015, section 148 (w.e.f. 14-5-2015).
Sub-section (6): withholding release for ninety days
Where an order releasing the property has been made by the Special Court under sub-section (6) of section 8, or by the Adjudicating Authority under section 58B or sub-section (2A) of section 60, the Director or any officer authorised by him may withhold the release of any such property for a period of ninety days from the date of receipt of such order, if he is of the opinion that the property is relevant for the appeal proceedings under the Act. The words "receipt of" were inserted, and "Special Court" substituted for "Court", by Act 20 of 2015, section 148 (w.e.f. 14-5-2015).
Section 21: retention of records
Section 21 mirrors section 20 for records.
| Sub-section | Provision |
|---|---|
| 21(1) | Where records have been seized under section 17 or 18, or frozen under section 17(1A), and the Investigating Officer or any other officer authorised by the Director has reason to believe they are required to be retained for any inquiry under the Act, they may, if seized, be retained, or if frozen, continue to remain frozen, for a period not exceeding one hundred and eighty days from the day of seizure or freezing |
| 21(2) | The person from whom records are seized or frozen is entitled to obtain copies of the records |
| 21(3) | On expiry of the period in sub-section (1), the records shall be returned to the person from whom they were seized, or whose records were ordered to be frozen, unless the Adjudicating Authority permits retention or continuation of freezing beyond that period |
| 21(4) | Before authorising such retention or continuation, the Adjudicating Authority shall satisfy himself that the records are required for the purposes of adjudication under section 8 |
| 21(5) | After an order of confiscation or release under sub-section (5), (6) or (7) of section 8, or section 58B, or sub-section (2A) of section 60, the Adjudicating Authority shall direct the release of the records to the person from whom they were seized |
| 21(6) | Where an order releasing the records has been made, the Director or any other officer authorised by him may withhold the release of any such record for a period of ninety days from the date of receipt of such order, if he is of the opinion that the record is relevant for the appeal proceedings under the Act |
Points worth noting in the comparison.
- Different reason to believe. Section 20(1) speaks of reason to believe that the property is required "for the purposes of adjudication under section 8", with the reason recorded in writing. Section 21(1) speaks of reason to believe that records are required "for any inquiry under this Act", and the text in the brackets about recording the reason is not repeated.
- Different test for the Adjudicating Authority. Section 20(4) adds that the property is "prima facie involved in money-laundering". Section 21(4) asks only that the records be required for the purposes of adjudication under section 8.
- Copies. Section 21(2) gives the person an entitlement to copies of records seized or frozen. The text says nothing more on the manner or timing of providing copies.
- Records have no separate sealed-envelope sub-section. Section 20(2) provides for the sealed envelope. The text of section 21 has no similar sub-section.
Printing and drafting notes: sub-section (5) of section 21 was amended by Act 20 of 2015, section 149 (w.e.f. 14-5-2015) to add "or release under" and the list of provisions. Sub-section (6) prints "has been made by the Court ", where the substituted words sit beside the old word "Court". It is quoted as printed. Also, sub-section (5) speaks of an "order of confiscation or release" by reference to section 8, where those orders are made by the Special Court, while the direction to release the records is given by the Adjudicating Authority; the text is quoted as printed.
The retention timeline
| Stage | Property (section 20) | Records (section 21) |
|---|---|---|
| Retention by officer | Up to one hundred and eighty days from seizure or freezing | Up to one hundred and eighty days from seizure or freezing |
| Expiry | Return unless Adjudicating Authority permits more time | Return unless Adjudicating Authority permits more time |
| Extension | Adjudicating Authority satisfied of prima facie involvement and need for adjudication | Adjudicating Authority satisfied that records are needed for adjudication |
| Release after final order | Special Court directs release of property not involved in money-laundering | Adjudicating Authority directs release of records |
| Appeal hold | Ninety days from receipt of the releasing order | Ninety days from receipt of the releasing order |
Our article on section 17 explains the thirty-day application for retention that precedes these steps, and our article on sections 22 and 23 covers the presumptions that apply to records and property found in a search.
An illustration
The names are invented. On 1 June, an officer seizes a hard drive and a vehicle from the premises of Delta Logistics Pvt Ltd. He records his reason to believe that both are required for adjudication under section 8. The hard drive may be retained for up to one hundred and eighty days from 1 June, and the company is entitled to obtain copies of the records on it. When the period expires, both items are to be returned unless the Adjudicating Authority permits retention beyond it. To allow the vehicle to be retained longer, the Adjudicating Authority must satisfy itself that the vehicle is prima facie involved in money-laundering and is required for adjudication.
Need help with seized or frozen property or records?
The period runs from the day of seizure or freezing, and what the Adjudicating Authority must be satisfied of depends on whether the item is property or a record. We can review the dates, the orders and your position with you through legal dispute resolution.
Key takeaways
- Seized or frozen property and records may be retained or kept frozen for not more than one hundred and eighty days from the day of seizure or freezing.
- On expiry they are returned unless the Adjudicating Authority permits retention or continuation of freezing beyond that period.
- For property, the Adjudicating Authority must be satisfied that it is prima facie involved in money-laundering and required for adjudication under section 8.
- For records, it must be satisfied that they are required for the purposes of adjudication under section 8.
- The person from whom records are seized is entitled to obtain copies.
- Release after a final order can be withheld for ninety days from receipt of the order if the item is relevant for the appeal proceedings.
Read next
- Section 17: search, seizure and freezing of property
- Section 8: adjudication, confirmation of attachment and confiscation
- Sections 22 and 23: presumptions as to records, property and inter-connected transactions
- Attachment and Confiscation of Property: ED Powers
Disclaimer: Based on the consolidated text of the Prevention of Money-laundering Act, 2002 published by the Enforcement Directorate, showing amendments up to Act 23 of 2019 (1 August 2019), and on the Department of Revenue consolidated copy of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 listing amendments up to 19 July 2024, as consulted on 2 October 2026. Later amendments, notifications, other rules and regulator directions should be checked. This article is general information, not legal advice; check the official text before acting.