Section 5 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.
Section 5 allows the Director, or an officer not below the rank of Deputy Director authorised by the Director, to provisionally attach property by a written order for a period not exceeding one hundred and eighty days. The officer must have recorded reasons, based on material in his possession, to believe that a person is in possession of proceeds of crime that are likely to be concealed, transferred or dealt with so as to frustrate confiscation proceedings.
This article reads the section 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.
The officer must have reason to believe, recorded in writing, that a person possesses proceeds of crime likely to be concealed, transferred or dealt with so as to frustrate confiscation. The order lasts not more than one hundred and eighty days. A copy goes to the Adjudicating Authority in a sealed envelope immediately, and a complaint must be filed before it within thirty days of the attachment. The person interested in attached immovable property is not prevented from enjoying it.
Sub-section (1): who may attach, and on what ground
Sub-section (1) was substituted by Act 2 of 2013, section 5 (w.e.f. 15-2-2013), as the footnote prints. Its working parts are these.
| Element | As printed |
|---|---|
| Officer | The Director, or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of the section |
| Belief | Reason to believe, the reason to be recorded in writing, on the basis of material in his possession |
| Ground (a) | Any person is in possession of any proceeds of crime |
| Ground (b) | Such proceeds 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 under Chapter III |
| Act | By order in writing, provisionally attach "such property" |
| Period | Not exceeding one hundred and eighty days from the date of the order |
| Manner | In such manner as may be prescribed |
Both grounds (a) and (b) are joined by "and", so both must be present. "Proceeds of crime" has the meaning in section 2(1)(u), explained in our article on the key definitions in section 2. The manner of attachment is left to rules; this article gives no form or step that the Act does not print.
A person who has received a provisional attachment order and needs the order, the recorded reasons and the supporting documents reviewed can take legal dispute resolution advice. Our general guide on attachment and confiscation of property gives a wider overview.
The three provisos
First proviso: a report or complaint on the scheduled offence
No order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country. The words "first proviso" appear in the second proviso in place of "clause (b)", by substitution under Act 20 of 2015, section 146 (w.e.f. 14-5-2015). The reader should check the current procedural law for the corresponding provision of the Code of Criminal Procedure, 1973.
Second proviso: immediate attachment
Notwithstanding the first proviso, any property of any person may be attached if the Director, or an officer not below Deputy Director authorised by him, has reason to believe (the reasons to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment is likely to frustrate any proceeding under this Act.
Third proviso: stay by the High Court
The third proviso was inserted by Act 13 of 2018, section 208 (w.e.f. 19-4-2018). For computing the one hundred and eighty days, the period during which the proceedings under this section are stayed by the High Court is excluded, and a further period not exceeding thirty days from the date of the order of vacation of the stay is counted.
Printing note: the text after the third proviso ends with a stray semicolon ("counted.];") before sub-section (2). It is quoted here as printed and changes no meaning.
Sub-section (2): the sealed envelope
Immediately after attachment under sub-section (1), the Director or officer shall forward a copy of the order, along with the material in his possession referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed. The Adjudicating Authority shall keep the order and material for such period as may be prescribed. The manner and the period are left to rules.
Sub-section (3): when the order ceases
Every order of attachment shall cease to have effect after the expiry of the period specified in sub-section (1) or on the date of an order made under sub-section (3) of section 8, whichever is earlier. The words "sub-section (3)" were substituted for "sub-section (2)" by Act 13 of 2018, section 208 (w.e.f. 19-4-2018). Section 8 is explained in our article on adjudication, confirmation of attachment and confiscation.
Sub-section (4): enjoyment of immovable property
Nothing in the section prevents the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. The Explanation says "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.
This sub-section is limited to immovable property. The text says nothing about enjoyment of movable property or bank balances, and this article adds nothing.
Sub-section (5): complaint within thirty days
The Director or other officer who provisionally attaches any property shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. The authority is described in our article on sections 6 and 7.
Timeline at a glance
| Step | Provision | Time mentioned |
|---|---|---|
| Order of provisional attachment | 5(1) | Not exceeding one hundred and eighty days from the date of the order |
| Copy of order and material to Adjudicating Authority | 5(2) | Immediately after attachment, in a sealed envelope |
| Complaint to Adjudicating Authority | 5(5) | Within thirty days from attachment |
| Exclusion of High Court stay | Third proviso | Stay period excluded; further period up to thirty days after vacation counted |
| End of the order | 5(3) | On expiry of the period, or on an order under section 8(3), whichever is earlier |
An illustration
The names are invented. A Deputy Director records in writing that he believes Mr Sanjay Ahuja holds a plot bought from proceeds of a scheduled offence and that the plot may be sold to defeat confiscation. He provisionally attaches it for a period within one hundred and eighty days, sends a sealed copy to the Adjudicating Authority at once and files his complaint within thirty days. Mr Ahuja's family, who live on the plot, are persons interested in an immovable property and sub-section (4) says the attachment does not stop them from enjoying it. If the Adjudicating Authority makes an order under section 8(3) earlier, the attachment ceases on that date.
The text consulted does not say how a person interested may challenge an order, and this article does not supply any procedure that the Act does not print.
Need help with an attachment order?
Time runs from the date of the order, and the grounds, the recorded reasons and the scheduled offence all matter. We can review the order and the documents with you through legal dispute resolution.
Key takeaways
- The order can be made by the Director or an officer not below Deputy Director authorised by the Director, on recorded reason to believe based on material in his possession.
- Both conditions must be present: possession of proceeds of crime and likelihood of concealment, transfer or dealing that may frustrate confiscation.
- The order is provisional and lasts not more than one hundred and eighty days from its date.
- The first proviso requires a report or complaint on the scheduled offence; the second proviso allows immediate attachment on recorded belief.
- The order and material go to the Adjudicating Authority in a sealed envelope, and a complaint follows within thirty days.
- The person interested in attached immovable property is not prevented from enjoying it.
Read next
- Section 6 and 7: Adjudicating Authority, composition, powers and staff
- Section 8: adjudication, confirmation of attachment and confiscation
- Section 4: punishment for money-laundering
- 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.