Source: The Hindu 

Introduction 

The Bharatiya Nagarik Suraksha Sanhita (BNSS) of 2023 introduced Section 107, which deals with "proceeds of crime." This new law gives courts broad powers to attach and forfeit property believed to be derived from criminal activities. Unlike previous laws, Section 107 allows for quicker action during the investigation phase, potentially leading to rapid disposal of seized property. 

What is section 107 of BNSS  

• About 
  • Section 107 of the relevant Act provides a comprehensive framework for the attachment, forfeiture, or restoration of property believed to be derived from criminal activities.  
  • This section empowers law enforcement and judicial authorities to take action against proceeds of crime while ensuring due process.  
• Initiation of Attachment Proceedings  
  • A police officer conducting an investigation may apply for property attachment if they have reason to believe the property is derived from criminal activity. 
  • This application must be made to the Court or Magistrate with jurisdiction over the offence. 
  • The application requires approval from the Superintendent of Police or Commissioner of Police. 
• Issuance of Show Cause Notice  
  • If the Court or Magistrate believes the properties are proceeds of crime, they may issue a show cause notice. 
  • The notice gives the property holder 14 days to explain why an attachment order should not be made. 
  • If the notice specifies property held by another person on behalf of the primary subject, that person must also be served a copy of the notice. 
• Consideration and Order of Attachment  
  • The Court or Magistrate will consider any explanation provided in response to the show cause notice. 
  • They will also consider available material facts and provide a reasonable opportunity for the concerned parties to be heard. 
  • An attachment order may be passed for properties found to be proceeds of crime. 
  • If the person fails to appear or represent their case within the 14-day period, an ex parte order may be passed. 
• Ex Parte Interim Order  
  • The Court or Magistrate may pass an ex parte interim order for attachment or seizure without issuing a notice if they believe that doing so would defeat the object of attachment or seizure. 
  • This interim order remains in force until an order under subsection (6) is passed. 
• Distribution of Proceeds  
  • If the Court or Magistrate finds the attached or seized properties to be proceeds of crime, they shall direct the District Magistrate to distribute these proceeds ratably among persons affected by the crime. 
• Implementation of Distribution  
  • The District Magistrate must distribute the proceeds within 60 days of receiving the order. 
  • The District Magistrate may perform this task personally or authorize a subordinate officer to do so. 
• Forfeiture to Government  
  • If there are no claimants for the proceeds, no ascertainable claimants, or a surplus after satisfying claimants, the proceeds are forfeited to the Government. 
  • Section 107 balances the need for swift action against criminal proceeds with the principles of natural justice by providing opportunities for affected parties to present their case.  
  • It also ensures that victims of crimes can potentially recover their losses through the distribution of seized criminal proceeds.  
  • The provision for ex parte orders in urgent cases, coupled with the eventual requirement for a full hearing, demonstrates the law's attempt to be both effective and fair in dealing with proceeds of crime. 

What is the Introduction of the "Proceeds of Crime" Concept Under Section 107 of the BNSS, 2023 and other Provision? 

• Introduction of "Proceeds of Crime" Concept  
  • Section 107 of the BNSS, 2023 introduces provisions dealing with properties that are "proceeds of crime". 
  • This concept was previously mainly addressed in the Prevention of Money Laundering Act (PMLA), 2002 and certain sections of the Code of Criminal Procedure,1973   (CrPC). 
• Expanded Court Powers  
  • Section 107 grants courts extensive powers to: a) Attach any property on the request of the police during investigation. b) Forfeit the proceeds of crime to the government under certain conditions. 
• Initiation of Attachment Proceedings  
  • Any police officer conducting an investigation can apply for property attachment. 
  • The application requires approval from the Superintendent of Police or Commissioner of Police. 
  • The officer needs only to have "reason to believe" that the property is derived from criminal activity. 
• Comparison with PMLA Provisions  
  • Unlike the PMLA, Section 107 of BNSS does not require: a) Written recording of reasons for belief. b) Belief that proceeds are likely to be concealed or transferred. c) A 90-day limit on provisional attachment. 
• Timing of Attachment  
  • Under BNSS, property can be attached during the investigation. 
  • This contrasts with CrPC, which allowed attachment only after the investigation report was forwarded to a magistrate. 
• Disposal of Property  
  • BNSS is silent on the stage of disposal, unlike PMLA which specifies disposal only after trial conclusion. 
  • If properties are found to be proceeds of crime, the court can order the District Magistrate to distribute them to affected persons. 
  • Unclaimed or surplus proceeds are forfeited to the government. 
• Procedural Safeguards  
  • The court must issue a show-cause notice with a 14-day response period before attachment. 
  • Ex parte orders can be passed if the person does not represent their case. 
  • The District Magistrate has 60 days to distribute the property after a court order. 
• Potential Constitutional Conflict  
  • Article 300A of the Constitution protects against deprivation of property except by authority of law. 
  • Laws affecting property rights must be "just, fair, and reasonable". 
• Definition Issues  
  • BNSS lacks a clear definition of 'proceeds of crime', except in sections dealing with organized crime and terrorist acts. 
• Legislative Intent and Concerns  
  • The intent appears to be empowering states for expeditious disposal and distribution of crime proceeds. 
  • Concerns exist about the lack of guidelines for identifying rightful claimants and the potential for property disposal without a proper trial. 

Conclusion  

While Section 107 aims to empower states to quickly handle and distribute proceeds of crime, it raises several concerns. The lack of clear guidelines for identifying rightful claimants and the possibility of disposing of property before a trial concludes could lead to legal and practical issues. There's a risk that this process might not fully align with constitutional protections of property rights, potentially making it vulnerable to legal challenges.