Sections 9 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.
When an order of confiscation is made under the Act, section 9 says what happens to title: all the rights and title in the property vest absolutely in the Central Government, clear of all encumbrances. A proviso lets the Special Court or the Adjudicating Authority declare void an encumbrance or lease-hold interest created to defeat the Chapter. Section 10 then provides for Administrators who receive, manage and dispose of the property.
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.
After an order of confiscation under section 8(5) or (7), section 58B or section 60(2A), all rights and title vest absolutely in the Central Government, clear of all encumbrances. An encumbrance or lease-hold interest created to defeat the Chapter can be declared void after the person interested is heard. The Central Government may appoint Administrators of the rank of Joint Secretary or above to manage and dispose of the property.
Section 9: what the main part says
Section 9 applies "where an order of confiscation has been made" under sub-section (5) or sub-section (7) of section 8, or section 58B, or sub-section (2A) of section 60, "in respect of any property of a person". In that case, all the rights and title in the property vest absolutely in the Central Government, clear of all encumbrances.
The reference to the orders under which confiscation arises was substituted for "sub-section (6) of section 8" by Act 2 of 2013, section 7 (w.e.f. 15-2-2013), as the footnote prints. The orders themselves are the subject of our article on section 8 and, for the cross-border orders, sections 58A, 58B, 60 and 61.
Three words in the section deserve attention.
| Word or phrase | What it signals |
|---|---|
| "vest absolutely" | The Central Government takes the rights and title, not merely a charge or a right to possession |
| "clear of all encumbrances" | Ordinary encumbrances on the property do not follow it into the Government's hands |
| "order of confiscation" | The section is triggered by the order, not by attachment |
Attachment, defined in section 2(1)(d), prohibits transfer, conversion, disposition or movement; it does not vest title. Vesting follows confiscation.
If a lender, buyer or co-owner holds an interest in property that may be the subject of a confiscation order and wants the title documents read against this section, a legal due diligence review of the chain of title and the registered charges can set out what is on record.
The first proviso: encumbrances created to defeat the Chapter
The first proviso gives the Special Court or the Adjudicating Authority, "as the case may be", a power to look behind an encumbrance. It applies after giving an opportunity of being heard to any other person interested in the property attached under Chapter III, or seized or frozen under Chapter V. If the Court or Authority is of the opinion that any encumbrance on the property, or lease-hold interest, has been created with a view to defeat the provisions of the Chapter, it may by order declare that encumbrance or lease-hold interest to be void. The property then vests in the Central Government clear of such encumbrances or lease-hold interest.
The words "Special Court or the Adjudicating Authority, as the case may be," were substituted for "Adjudicating Authority", and "or frozen" was inserted, both by Act 2 of 2013, section 7 (w.e.f. 15-2-2013).
Printing slip: the proviso prints "any encumbrance on the property or or lease-hold interest", with a doubled "or". It is quoted here with that slip noted and the meaning is not changed.
The proviso turns on purpose. It speaks of an encumbrance or lease-hold interest created "with a view to defeat the provisions of this Chapter". An encumbrance without that purpose does not fall within it. The text does not say how that purpose is proved or what evidence is needed, and this article adds nothing on that.
The second proviso: damages remain
Nothing in section 9 discharges any person from any liability in respect of such encumbrances which may be enforced against such person by a suit for damages. So a holder whose encumbrance is declared void does not lose a claim in damages that can be enforced "against such person", that is, against the person who created the encumbrance. The text does not say more. The reader should check the current procedural law applicable to suits for damages.
Section 10: the Administrator
Sub-section (1): appointment
The Central Government may, by order published in the Official Gazette, appoint as many of its officers (not below the rank of a Joint Secretary to the Government of India) as it thinks fit to perform the functions of an Administrator.
Sub-section (2): management
The Administrator shall receive and manage the property in relation to which an order has been made under sub-section (5), (6) or (7) of section 8, or section 58B, or sub-section (2A) of section 60, in such manner and subject to such conditions as may be prescribed. The manner and conditions are left to rules; this article gives none.
Section 9 lists sub-section (5) or (7) of section 8, while section 10(2) lists sub-sections (5), (6) and (7) of section 8. The text consulted prints both lists as they are, and this article does not reconcile them. The footnote to section 10(2) says the reference was substituted for "sub-section (6) of section 8" by Act 2 of 2013, section 8 (w.e.f. 15-2-2013).
Sub-section (3): disposal
The Administrator shall also take such measures as the Central Government may direct to dispose of the property which is vested in the Central Government under section 9.
| Sub-section | Role of the Administrator |
|---|---|
| 10(1) | Officers not below Joint Secretary are appointed by Gazette order |
| 10(2) | Receive and manage the property as prescribed |
| 10(3) | Dispose of the vested property as the Central Government directs |
An illustration
The names are invented. A Special Court orders the confiscation of a warehouse owned by Greenfield Traders Pvt Ltd. A month earlier, the company had granted a lease-hold interest in the warehouse to a related firm. After hearing the firm as a person interested, the Court forms the opinion that the lease was created with a view to defeat the Chapter and declares it void. The warehouse vests in the Central Government clear of the lease. An Administrator then receives and manages the warehouse and, on the Central Government's directions, takes measures to dispose of it. The related firm's claim in damages against the company, if any, is not discharged by section 9.
The example shows how the sections fit. The outcome of any real matter turns on the order made and the facts found.
Need help with property that may be confiscated?
Title, charges and leases decide what a buyer or lender stands to lose if an order of confiscation is made. We can check the title chain and the recorded interests with you through legal due diligence. Our general guide on attachment and confiscation of property gives a wider overview.
Key takeaways
- After a confiscation order under the listed provisions, all rights and title vest absolutely in the Central Government, clear of all encumbrances.
- The Special Court or the Adjudicating Authority may declare void an encumbrance or lease-hold interest created with a view to defeat the Chapter, after hearing any other person interested.
- Nothing in section 9 discharges a person from liability for such encumbrances that can be enforced by a suit for damages.
- Administrators are officers not below the rank of Joint Secretary, appointed by order published in the Official Gazette.
- The Administrator receives, manages and disposes of the property; the manner and conditions of management are left to rules.
- Section 9 lists sub-sections (5) and (7) of section 8; section 10(2) also lists sub-section (6). Both are quoted as printed.
Read next
- Section 8: adjudication, confirmation of attachment and confiscation
- Section 5: provisional attachment of property
- Sections 58A, 58B, 60 and 61: property across borders
- 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.