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December 2025Q. 4A(i)5 marksSyllabus 2022OR, alternative to Q. 4
(i)Describe Financial Intelligence Unit — India (FIU-IND) and what are the main functions of it ?
Financial Intelligence Unit - India (FIU-IND) is the central, national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions to enforcement agencies and foreign FIUs. Financial Intelligence Unit – India (FIU-IND) was set by the Government of India as the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions. FIU-IND is also responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money laundering and financing of terrorism. FIU-IND is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Finance Minister.
The main function of FIU-IND is to receive cash/suspicious transaction reports, analyse them and, as appropriate, disseminate valuable financial information to intelligence/enforcement agencies and regulatory authorities. The functions of FIU-IND are:
•Collection of Information: Act as the central reception point for receiving Cash Transaction reports (CTRs), Non-Profit Organisation Transaction Report (NTRs), Cross Border Wire Transfer Reports (CBWTRs), Reports on Purchase or Sale of Immovable Property (IPRs) and Suspicious Transaction Reports (STRs) from various reporting entities.
•Analysis of Information: Analyse received information in order to uncover patterns of transactions suggesting suspicion of money laundering and related crimes.
•Sharing of Information: Share information with national intelligence/law enforcement agencies, national regulatory authorities and foreign Financial Intelligence Units.
•Act as Central Repository: Establish and maintain national data base on the basis of reports received from reporting entities.
•Coordination: Coordinate and strengthen collection and sharing of financial intelligence through an effective national, regional and global network to combat money laundering and related crimes.
•Research and Analysis: Monitor and identify strategic key areas on money laundering trends, typologies and developments.
Source: ICSI Guideline Answers, December 2025, Q. 4A(i) (Syllabus 2022).
December 2024Q. 4(a)5 marksSyllabus 2022Law changed
Law changed after this attempt: The Fugitive Economic Offenders Act, 2018 was a separate lesson until the June 2025 exam. From the December 2025 exam it is deleted as a lesson and only a brief of salient features is retained inside the Prevention of Money Laundering lesson (Supplement for June 2026). Detailed section-level answers like this one are no longer covered in the study material. The answer below reflects the law as it stood for December 2024.
(a)Explain the Rules of Evidence and Standard of proof required by the Special Court under Fugitive Economic Offenders Act, 2018.
According to the Fugitive Economic Offenders Act, 2018, the rules of evidence state that the burden of proof for establishing:
(a)that an individual is a fugitive economic offender; or
(b)that a property is the proceeds of crime or any other property in which the individual alleged to be a fugitive economic offender has an interest, shall be on the Director or the person authorised by the Director to file the application.
Notwithstanding anything contained in any other law for the time being in force, where any person claims that any interest in any property was acquired bona fide and without knowledge of the fact that, such property constitutes proceeds of crime, the burden of proving such fact shall lie upon him.
The standard of proof applicable to the determination of facts by the Special Court under the Act shall be preponderance of probabilities.
Source: ICSI Guideline Answers, December 2024, Q. 4(a) (Syllabus 2022).
June 2024Q. 4(a)5 marksSyllabus 2022Law changed
Law changed after this attempt: The Fugitive Economic Offenders Act, 2018 was a separate lesson until the June 2025 exam. From the December 2025 exam it is deleted as a lesson and only a brief of salient features is retained inside the Prevention of Money Laundering lesson (Supplement for June 2026). Detailed section-level answers like this one are no longer covered in the study material. The answer below reflects the law as it stood for June 2024.
(a)Discuss the power of survey by director under law relating to Fugitive Economic Offenders Act, 20l8 ?
According to Fugitive Economic Offenders Act, 2018 where a director or any other officer authorised by the Director, on the basis of material in his possession, has reason to believe (the reason for such belief to be recorded in writing), that an individual may be fugitive economic offender, he may enter any place:
i)within the limit of the area assigned to him, or
ii)in respect of which he is authorised for the purposes of this section, by such other authority, who is assigned the area within which such place is situated.
Where the director or any officer authorised by the Director, on the basis of material in his possession, has reason to believe (the reason for such belief to be recorded in writing), that an individual may be fugitive economic offender and it is necessary to enter any place, he may request any proprietor, employee or any other person who may be present at that time, to-
a)afford him the necessary facility to inspect such records as he may require and which may be available at such place:
b)afford him the necessary facility to check or verify the proceeds of crime or any transaction related to proceeds of crime which may be found therein: and
c)Furnish such information as he may require as to any matter which may be useful for, or relevant to any proceedings.
The Director, or any other officer acting under this section may:
i)place marks of identification on the records inspected by him and make or cause to be made extracts or copies therefrom:
ii)make any inventory of any property checked or verified by him; and
iii)record the statement of any person at the property which may be useful for or relevant to, any proceeding
Source: ICSI Guideline Answers, June 2024, Q. 4(a) (Syllabus 2022).
June 2024Q. 4(c)5 marksSyllabus 2022
(c)What is meant by “Regulated Entities” (REs) under the Prevention of Money-Laundering Act, 2002 ?
The “Regulated Entities” (REs) under the protection of Money-Laundering Act, 2002 means:
a)all Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs)/ Local Area Banks (LABs)/ All Primary (Urban) Co-operative Banks (UCBs)/ State and Central Co-operative Banks (StCBs/CCBs) and any other entity which has been licenced under Section 22 of Banking Regulation Act, 1949, which as a group shall be referred as ‘banks”.
d)All Payment System Providers (PSPs), System Participants (SPs) and Prepaid Payment Instrument Issuers (PPI Issuers).
e)All authorised persons (APs) including those who are agents of Money Transfer Service Scheme (MTSS), regulated by the Regulator.
Source: ICSI Guideline Answers, June 2024, Q. 4(c) (Syllabus 2022).
December 2023Q. 2(b)5 marksSyllabus 2022Law changed
Law changed after this attempt: The Fugitive Economic Offenders Act, 2018 was a separate lesson until the June 2025 exam. From the December 2025 exam it is deleted as a lesson and only a brief of salient features is retained inside the Prevention of Money Laundering lesson (Supplement for June 2026). Detailed section-level answers like this one are no longer covered in the study material. The answer below reflects the law as it stood for December 2023.
(b)Faizal is a fugitive economic offender and has left India to avoid legal proceedings against him. Discuss the provisions relating to power of civil/tribunal to disallow civil claims and attach his property.
Power to Disallow Civil Claims Section 14 of the Fugitive Economic Offenders Act, 2018 deals with power to disallow civil claims. It provides that notwithstanding anything contained in any other law for the time being in force a. On a declaration of an individual as a fugitive economic offender any court or tribunal in India in any civil proceeding before it, may, disallow such individual from putting forward or defending any civil claims and b. Any Court or Tribunal in India in any civil proceeding before it, may disallow any company or limited liability partnership from putting forward or defending any civil claim, if an individual filing the claim on behalf of the company or the limited liability partnership or any promoter or key managerial personnel or majority shareholder of the company or an individual having a controlling interest in the limited liability partnership has been declared as a fugitive economic offender.
Attachment of Property Section 5 of the Fugitive Economic Offenders Act, 2018 empower the Director or any other officer authorised by the Director, not below the rank of Deputy Director, may with the permission of the Special Court, attach any by an order in writing in prescribed manner.
The Director or any other officer authorised by the Director, not below the rank of Deputy Director, authorised by the Director may by an order in writing, at any time prior to the filing of the application to the Special Court attach any property
1.For which there is a reason to believe that the property is proceeds of crime, or is a property or benami property owned by an individual who is a fugitive economic offender and
2.Which is being or is likely to be dealt with in a manner which may result in the property being unavailable for confiscation.
Director or any other officer who provisionally attaches any property shall within a period of thirty days from the date of such attachment file an application before the Special Court.
The attachment of any property shall continue for a period of one hundred and eighty days from the date of order of such attachment or such other period as may be extended by the special court before the expiry of such period.
Source: ICSI Guideline Answers, December 2023, Q. 2(b) (Syllabus 2022).
December 2024Q. 3(c)5 marksSyllabus 2022
(c)Ravinder is a public servant and a sum of ₹ 50 Lakhs was recovered from his car parked outside his house while he was sitting in his car with Uttam, a businessman who allegedly handed over this money to clear his Income Tax file pending with Ravinder. Explain whether this money can be regarded as ‘Proceeds of Crime’ under the Prevention of Money Laundering Act, 2002 ? What defense can Ravinder submit to prove that he is not guilty ? Support your answer with relevant case law.
Yes, this money can be regarded as Proceeds of Crime’ under the Prevention of Money Laundering Act, 2002.
In the case of Directorate of Enforcement {Appellant(s)} vs. Padmanabhan Kishore {Respondent(s)} (Arising out of SLP (Crl.) No. 2668 of 2022) Judgement dated October 31, 2022, Supreme Court of India inter-alia observed that the definition of “proceeds of crime” in PML Act, inter alia, means any property derived or obtained by any person as a result of criminal activity relating to a scheduled offence.
The offences punishable under Sections 7, 12 and 13 are scheduled offences, as is evident from paragraph 8 of Part-A of the Schedule to the PML Act. Any property thus derived as a result of criminal activity relating to offence mentioned in said paragraph 8 of Part-A of the Schedule would certainly be “proceeds of crime”. Section 3 states, inter alia, that whoever knowingly assists or knowingly is a party or is actually involved in any process or activity connected with proceeds of crime including its concealment, possession, acquisition or use shall be guilty of offence of money-laundering.
The Defence that Ravinder could submit is:
It is true that so long as the amount is in the hands of a bribe giver, and till it does not get impressed with the requisite intent and is actually handed over as a bribe, it would definitely be untainted money. If the money is handed over without such intent, it would be a mere entrustment. If it is thereafter appropriated by the public servant, the offence would be of misappropriation or species thereof but certainly not of bribe. The crucial part therefore is the requisite intent to hand over the amount as bribe and normally such intent must necessarily be antecedent or prior to the moment the amount is handed over. Thus, the requisite intent would always be at the core before the amount is handed over. Such intent having been entertained well before the amount is actually handed over, the person concerned would certainly be involved in the process or activity connected with “proceeds of crime” including inter alia, the aspects of possession or acquisition thereof. By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime. Without such active participation on part of the person concerned, the money would not assume the character of being proceeds of crime. The relevant expressions from Section 3 of the PML Act are thus wide enough to cover the role played by such person.
Further, Supreme Court of India held that on a bare perusal of the complaint made by the Enforcement Directorate, it is quite clear that the respondent was prima facie involved in the activity connected with the proceeds of crime.
Source: ICSI Guideline Answers, December 2024, Q. 3(c) (Syllabus 2022).
December 2023Q. 3(c)5 marksSyllabus 2022Law changed
Law changed after this attempt: The Benami Transactions (Prohibition) Act, 1988 was a separate lesson until the June 2025 exam. From the December 2025 exam it is deleted as a lesson and only a brief of salient features is retained inside the Prevention of Money Laundering lesson (Supplement for June 2026). Detailed section-level answers like this one are no longer covered in the study material. The answer below reflects the law as it stood for December 2023.
(c)‘A’, an individual by a transaction, purchased a house in the name of his wife.
Consideration of transaction was paid by ‘A’ out of his known sources.
Government seized the house claiming it to be a benami property. Decide.
Whether the action of the Government is justified under the Prohibition of the Benami Transaction Act, 1988 ?
According to Section 2(9) of the Prohibition of Benami Transactions Act, 1988, an individual purchasing a property in the name of his spouse or any child and the consideration for such property has been provided out of the known sources shall not amount to Benami Transaction.
'A' has purchased a house in the name of his wife and consideration of transaction was paid by ‘A’ out of his known sources and thus it is not a benami transaction.
Therefore, the action of the Government is not justified under Prohibition of Benami Property Transactions Act, 1988.
Source: ICSI Guideline Answers, December 2023, Q. 3(c) (Syllabus 2022).
December 2023Q. 4A(iv)4 marksSyllabus 2022OR, alternative to Q. 4Law changed
Law changed after this attempt: The Benami Transactions (Prohibition) Act, 1988 was a separate lesson until the June 2025 exam. From the December 2025 exam it is deleted as a lesson and only a brief of salient features is retained inside the Prevention of Money Laundering lesson (Supplement for June 2026). Detailed section-level answers like this one are no longer covered in the study material. The answer below reflects the law as it stood for December 2023.
(iv)Elaborate the law and procedure in respect of confiscation and vesting of benami property under the Benami Transactions (Prohibition) Act, 1988.
Section 27 of Benami Transaction (Prohibition) Act, 1988 deals with confiscation and vesting of benami property. According to Section 27(1) of the Act where an order is passed in respect of any property under section 26(3) holding such property to be a benami property, the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating the property held to be a benami property. However, where an appeal has been filed against the order of the Adjudicating Authority, the confiscation of property shall be made subject to the order passed by the Appellate Tribunal under section 46. Further, confiscation of the property shall be made in accordance with such procedure as may be prescribed.
Section 27(2) provides that the above shall not apply to a property held or acquired by a person from the benamidar for adequate consideration, prior to the issue of notice under sub-section (1) of section 24 without his having knowledge of the benami transaction.
Section 27(3) states that where an order of confiscation has been made, all the rights and title in such property shall vest absolutely in the Central Government free of all encumbrances and no compensation shall be payable in respect of such confiscation.
As per Section 27 (4) any right of any third person created in such property with a view to defeat the purposes of this Act shall be null and void.
Section 27 (5) provides that where no order of confiscation is made upon the proceeding under this Act attaining finality, no claim shall lie against the Government.
PART II
Source: ICSI Guideline Answers, December 2023, Q. 4A(iv) (Syllabus 2022).
June 2024Q. 4A(ii)5 marksSyllabus 2022OR, alternative to Q. 4Law changed
Law changed after this attempt: The Benami Transactions (Prohibition) Act, 1988 was a separate lesson until the June 2025 exam. From the December 2025 exam it is deleted as a lesson and only a brief of salient features is retained inside the Prevention of Money Laundering lesson (Supplement for June 2026). Detailed section-level answers like this one are no longer covered in the study material. The answer below reflects the law as it stood for June 2024.
(ii)How is the Management of properties confiscated under the Law relating to Benami Transactions and Prohibition ?
Section 28 of the Benami Transactions (Prohibition) Act, 1988 relates to management of properties confiscated under this Act. Sub-section (1) of this section provides that the Administrator shall have the power to receive and manage the property, in relation to which an order of confiscation under sub-section (1) of section 27 has been made, in such manner and subject to such conditions, as may be prescribed.
Sub-section (2) of this section provides that the Central Government may, by order published in the Official Gazette, notify as many of its officers as it thinks fit, to perform the functions of Administrators.
Sub-section (3) of this section provides that 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 subsection (2) of section 27 in such manner and subject to such conditions as may be prescribed.
Source: ICSI Guideline Answers, June 2024, Q. 4A(ii) (Syllabus 2022).
June 2025Q. 3(b)5 marksSyllabus 2022
(b)X was caught transferring funds through illegal export of opium from India to South Africa.
State whether X has committed any offence under the Prevention of Money Laundering Act,
2002. Elucidate the punishment that may be imposed on X under the Act.
According to Section 3 of the Prevention of Money Laundering Act, 2002, whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering.
Punishment: Section 4 of the said Act provides for the punishment for Money-Laundering. Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than 3 years but which may extend to 7 years and shall also be liable to fine. But where the proceeds of crime involved in money-laundering relate to any offence specified under paragraph 2 of Part A of the Schedule, the maximum punishment may extend to 10 years instead of 7 years.
As per the provisions of the Prevention of Money Laundering Act, 2002 Mr. X has Committed an offence under Section 3 and Section 23 of this Act and he may be punished as per the aforesaid provisions of section 4 of the Prevention of Money Laundering Act, 2002.
(5 Marks)
Source: ICSI Guideline Answers, June 2025, Q. 3(b) (Syllabus 2022).
June 2025Q. 4A(i)5 marksSyllabus 2022OR, alternative to Q. 4Law changed
Law changed after this attempt: The Benami Transactions (Prohibition) Act, 1988 was a separate lesson until the June 2025 exam. From the December 2025 exam it is deleted as a lesson and only a brief of salient features is retained inside the Prevention of Money Laundering lesson (Supplement for June 2026). Detailed section-level answers like this one are no longer covered in the study material. The answer below reflects the law as it stood for June 2025.
(i)Explain the provisions relating to Special Courts constituted under Section 50 of the Prohibition of Benami Property Transactions Act, 1988.
Section 50 of the Benami Transactions Prohibition Act, 1988 relates to Special Courts.
Section 50 (1) provides that the Central Government, in consultation with the Chief Justice of the High Court, shall for trial of an offence punishable under this Act, by notification, designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.
Section 50 (2) provides that while trying an offence under this Act, a Special Court shall also try an offence other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973, be charged at the same trial.
Section 50(3) states that the Special Court shall not take cognizance of any offence punishable under this Act except upon a complaint in writing made by -. (i) the authority; or (ii) any officer of the Central Government or State Government authorized in writing by that Government by a general or special order made in this behalf.
According to Section 50(4) every trial under this section shall be conducted as expeditiously as possible and an endeavour shall be made by the Special Court to conclude the trial within six months from the date of filing of the complaint.
(5 Marks)
Source: ICSI Guideline Answers, June 2025, Q. 4A(i) (Syllabus 2022).
December 2024Q. 4A(i)5 marksSyllabus 2022OR, alternative to Q. 4Law changed
Law changed after this attempt: The Benami Transactions (Prohibition) Act, 1988 was a separate lesson until the June 2025 exam. From the December 2025 exam it is deleted as a lesson and only a brief of salient features is retained inside the Prevention of Money Laundering lesson (Supplement for June 2026). Detailed section-level answers like this one are no longer covered in the study material. The answer below reflects the law as it stood for December 2024.
(i)Explain the provisions of ‘Offences by Companies’ under Section 62 of the Benami Transactions (Prohibition) Act, 1988.
Section 62 of the Benami Transaction (Prohibition) Act, 1988 relates to consequences in case of offences by companies. Section 62 (1) provides that where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.
Section 62(2) states that nothing contained in sub-section (1) of this section shall render any person liable to punishment, if he proves that the contravention took place without his knowledge.
Section 62(3) provides that notwithstanding anything contained in subsection (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.
Source: ICSI Guideline Answers, December 2024, Q. 4A(i) (Syllabus 2022).
June 2026Q. 2(b)5 marksSyllabus 2022
(b)Arjun Mehta purchased a house using proceeds of crime. The Enforcement Directorate attached the property under the Prevention of Money Laundering Act, 2002. During the pendency of proceedings, Arjun Mehta created a lease in favour of his friend and also mortgaged the house to a private lender. Later, the Special Court passed an order of confiscation under Section 8(5) of the Act. What will be the effect of confiscation on the lease and mortgage created by Arjun Mehta under Section 9 of the Prevention of Money Laundering Act, 2002 ? Will those rights survive after confiscation ?
Section 9 of the Prevention of Money Laundering Act, 2002 provides that 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, all the rights and title in such property shall vest absolutely in the Central Government free from all encumbrances: Where the Special Court or the Adjudicating Authority, as the case may be, after giving an opportunity of being heard to any other person interested in the property attached under this Chapter, or seized or frozen under Chapter V, 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 this Chapter, it may, by order, declare such encumbrance or lease-hold interest to be void and thereupon the aforesaid property shall vest in the Central Government free from such encumbrances or lease-hold interest.
It may be noted that nothing in this section shall operate to discharge any person from any liability in respect of such encumbrances which may be enforced against such person by a suit for damages.
In the present case, the property was confiscated under Section 8(5) of the PMLA. Once confiscation is ordered, the property vests absolutely in the Central Government free from all encumbrances. If the lease and mortgage were created after attachment and with the intention to defeat the proceedings under PMLA, the Special Court can declare them void.
Therefore, the lease in favour of the friend and the mortgage in favour of the lender will not survive after confiscation. The Central Government will obtain full and clear title over the property.
Source: ICSI Guideline Answers, June 2026, Q. 2(b) (Syllabus 2022).