Section 8 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 8 is where an attachment, a seizure or a freezing is tested. The Adjudicating Authority can serve a notice of not less than thirty days asking the person to show the sources by which the property was acquired. It then records a finding, and if it decides the property is involved in money-laundering it confirms the attachment or retention. Confiscation or release at the end of a trial is for the Special Court.
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.
On a complaint under section 5(5) or an application under section 17(4) or 18(10), the Adjudicating Authority, if it has reason to believe, may serve a notice of not less than thirty days calling on the person to show the sources of income and why the property should not be declared involved in money-laundering and confiscated. After hearing, it records a finding. If it confirms, the attachment continues for not more than three hundred and sixty-five days during investigation, or while proceedings are pending. Confiscation or release is ordered by the Special Court.
Sub-section (1): the notice
When the Adjudicating Authority receives a complaint under section 5(5), or applications under section 17(4) or section 18(10), and has reason to believe that a person has committed an offence under section 3 or is in possession of proceeds of crime, it may serve a notice of not less than thirty days. The words "offence under section 3 or is in possession of proceeds of crime" were substituted by Act 21 of 2009, section 5 (w.e.f. 1-6-2009).
The notice calls upon the person:
- to indicate the sources of his income, earning or assets, out of which or by means of which he acquired the property attached under section 5(1), or seized or frozen under section 17 or 18;
- to give 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 properties involved in money-laundering and confiscated by the Central Government.
The words "or frozen" were inserted by Act 2 of 2013, section 6 (w.e.f. 15-2-2013).
Two provisos protect others. Where the notice specifies property as held by a person on behalf of another, a copy shall also be served on that other person. Where property is held jointly by more than one person, the notice shall be served on all of them.
If you have received such a notice and need to prepare a reply with the evidence the notice asks for, legal dispute resolution support can help you read the notice against the section. The authority itself is described in our article on sections 6 and 7.
Sub-section (2): hearing and finding
The Adjudicating Authority shall, after (a) considering the reply, if any, (b) hearing the aggrieved person and the Director or any other officer authorised by him, and (c) taking into account all relevant materials on record, record by order a finding whether all or any of the properties in the notice are involved in money-laundering.
The proviso says if the property is claimed by a person other than the person to whom the notice was issued, that person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering.
Sub-section (3): confirmation and continuation
Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, it shall by order in writing confirm the attachment under section 5(1), or the retention of property or record seized or frozen under section 17 or 18 (with a finding to that effect). Such attachment, retention or freezing shall:
- (a) continue during investigation for a period not exceeding three hundred and sixty-five days, or the pendency of proceedings relating to any offence under the Act before a court or, under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be; and
- (b) become final after an order of confiscation is passed under sub-section (5) or (7) of section 8, or section 58B, or sub-section (2A) of section 60, by the Special Court.
The words "investigation for a period not exceeding three hundred and sixty-five days or" were inserted by Act 13 of 2018, section 208 (w.e.f. 19-4-2018), and "three hundred and sixty-five days" was substituted for "ninety days" by Act 7 of 2019, section 22 (w.e.f. 20-3-2019). The earlier figure is history only. In clause (b), "Special Court" was substituted for "Adjudicating Authority" by Act 20 of 2015, section 147 (w.e.f. 14-5-2015).
The Explanation, inserted by Act 7 of 2019 (w.e.f. 20-3-2019), says that in computing the three hundred and sixty-five days, the period during which the investigation is stayed by any court under any law for the time being in force shall be excluded.
Sub-section (4): taking possession
Where a provisional order of attachment under section 5(1) has been confirmed under sub-section (3), the Director or any other officer authorised by him shall forthwith take possession of the property attached under section 5 or frozen under section 17(1A), in such manner as may be prescribed. The proviso says if it is not practicable to take possession of property frozen under section 17(1A), the order of confiscation shall have the same effect as if the property had been taken possession of. The manner of taking possession is left to rules.
Sub-sections (5) to (7): the Special Court
| Sub-section | Trigger | Order |
|---|---|---|
| 8(5) | On conclusion of a trial of an offence under the Act, the Special Court finds the offence of money-laundering has been committed | Such property involved in money-laundering, or used for committing the offence, shall stand confiscated to the Central Government |
| 8(6) | On conclusion of a trial, the Special Court finds the offence has not taken place or the property is not involved in money-laundering | It shall order release of the property to the person entitled to receive it |
| 8(7) | The trial cannot be conducted by reason of the death of the accused, the accused being declared a proclaimed offender, or any other reason, or having commenced could not be concluded | On an application moved by the Director or a person claiming to be entitled to possession of property in respect of which an order has been passed under section 8(3), the Special Court passes appropriate orders on confiscation or release, having regard to the material before it |
Sub-sections (5) and (6) were substituted for the earlier sub-sections by Act 2 of 2013, section 6 (w.e.f. 15-2-2013). What follows after a confiscation order, including the vesting of the property, is dealt with in our article on sections 9 and 10.
Sub-section (8): restoration to a claimant
Sub-section (8), inserted by Act 20 of 2015, section 147 (w.e.f. 14-5-2015), applies where property stands confiscated to the Central Government under sub-section (5). The Special Court, in such manner as may be prescribed, may direct the Central Government to restore the confiscated property or part of it to a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering.
The first proviso says the Special Court shall not consider such a claim unless it is satisfied that the claimant has acted in good faith, has suffered the loss despite having taken all reasonable precautions and is not involved in the offence. The second proviso, inserted by Act 13 of 2018 (w.e.f. 19-4-2018), allows the Special Court, if it thinks fit, to consider the claim during the trial in such manner as may be prescribed. The manner is left to rules.
Stages at a glance
| Stage | Who acts | Key words from the text |
|---|---|---|
| Complaint or application received | Adjudicating Authority | Reason to believe an offence under section 3 or possession of proceeds of crime |
| Notice | Adjudicating Authority | Not less than thirty days; sources of income; show cause |
| Finding | Adjudicating Authority | After reply, hearing and relevant materials |
| Confirmation | Adjudicating Authority | Attachment or retention continues for not more than three hundred and sixty-five days during investigation, or while proceedings are pending |
| Final order | Special Court | Confiscation under 8(5) or (7), or release under 8(6) or (7) |
| Restoration | Special Court | Claimant with a legitimate interest, good faith, quantifiable loss |
An illustration
The names are invented. Ms Leena Dhawan receives a notice from the Adjudicating Authority after her flat was provisionally attached. The notice gives her not less than thirty days to indicate the sources by which she acquired it and to show cause why it should not be declared involved in money-laundering. Her brother Mr Arjun Dhawan, who holds a share in the flat, is also served because the property is held jointly. After hearing both and the officer, the authority confirms the attachment. The attachment then continues for the period in sub-section (3)(a), and the matter passes to the Special Court for confiscation or release at the end of the trial under sub-sections (5) and (6).
The text consulted does not say what weight any particular piece of evidence carries, and this article adds no rule that the section does not print.
Need help replying to a notice under section 8?
The notice asks for the sources of income and for evidence, within a minimum of thirty days, and the finding that follows shapes everything after it. We can review your notice, your documents and your reply with you through legal dispute resolution. Our general guide on attachment and confiscation of property gives a wider overview.
Key takeaways
- The Adjudicating Authority may serve a notice of not less than thirty days on a complaint under section 5(5) or an application under section 17(4) or 18(10).
- A copy of the notice goes to any person on whose behalf property is held, and to all joint holders.
- After a hearing, it records a finding; if it confirms, the attachment or retention continues for not more than three hundred and sixty-five days during investigation, or during the pendency of proceedings.
- The period of any stay of the investigation by a court is excluded in counting the three hundred and sixty-five days.
- Confiscation or release is ordered by the Special Court at the end of the trial, or on an application where the trial cannot be conducted.
- The Special Court may direct restoration to a claimant with a legitimate interest who has acted in good faith.
Read next
- Section 5: provisional attachment of property
- Sections 6 and 7: Adjudicating Authority
- Sections 9 and 10: vesting of confiscated property and its management
- 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.