When the Enforcement Directorate provisionally attaches a person's property under Section 5 of the Prevention of Money Laundering Act, 2002, that attachment is not the end of the story. Within a fixed window it must be tested before an independent forum that hears the affected person, weighs the material, and decides whether the property is genuinely involved in money-laundering. That forum is the Adjudicating Authority constituted under Section 6. It is the statutory hinge between the ED's investigative power and the eventual confiscation of property — a quasi-judicial body that supplies the first layer of due process in the PMLA scheme. This chapter unpacks Section 6 sub-section by sub-section, situates it against Sections 5, 8 and the Appellate Tribunal, and works through the case law that has settled (and unsettled) questions about its composition and powers.
Where Section 6 sits in the PMLA scheme
The PMLA's enforcement machinery moves in stages. The Directorate of Enforcement investigates the offence of money-laundering under Section 3, and where it has reason to believe that property is the proceeds of crime, it may pass a provisional attachment order under Section 5. But a provisional attachment is, by definition, temporary: Section 5(3) gives it a life of 180 days unless it is confirmed. The body empowered to confirm (or refuse to confirm) that attachment is the Adjudicating Authority. Section 6 creates and constitutes that body; Section 7 deals with its staff; Section 8 sets out the adjudication procedure; and Section 11 clothes it with the powers of a civil court for limited purposes.
It is essential to grasp at the outset that the Adjudicating Authority is not a criminal court. It does not try the offence of money-laundering — that is the function of the Special Court under Section 4. Instead, it conducts a civil, property-focused inquiry: is this property involved in money-laundering, such that the attachment should be confirmed pending the criminal trial? The Supreme Court in Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929, repeatedly emphasised this bifurcation between the adjudication of attachment and the trial of the predicate offence. Understanding the Authority's limited, civil character resolves most of the confusion that surrounds Section 6.
Appointment and jurisdiction: Section 6(1)
Section 6(1) provides that the Central Government shall, by notification, appoint an Adjudicating Authority to exercise the jurisdiction, powers and authority conferred by or under the Act. Two features deserve attention. First, the Authority is a creature of executive notification, not of a standing statutory bench — the Central Government decides when and where to constitute it. Second, its jurisdiction is defined entirely by the Act: it can do only what the PMLA authorises, and no more. This is why the Authority's role is so tightly tethered to Sections 5, 8 and the property-attachment scheme; it has no general adjudicatory remit.
In practice, a single Adjudicating Authority based in New Delhi has exercised PMLA jurisdiction across India, sitting in benches as the Chairperson directs. The Authority's orders are appealable, in the first instance, to the Appellate Tribunal under Section 26, and thereafter to the High Court under Section 42 — a tiered structure that the courts have repeatedly relied upon when rejecting challenges to the Authority's composition.
Composition: Section 6(2) and the experience requirement
Section 6(2) states that an Adjudicating Authority shall consist of a Chairperson and two other Members. The proviso adds a crucial qualitative requirement: one Member each shall be a person having experience in the field of law, administration, finance or accountancy. Read carefully, the proviso contemplates that the body should bring together legal, administrative and financial-accountancy expertise — reflecting the hybrid nature of money-laundering adjudication, which mixes questions of law (was there a scheduled offence, what are proceeds of crime) with questions of finance and accounting (tracing of value, valuation, layering).
The composition language has generated genuine litigation, because the Act elsewhere permits the Authority to sit in benches of one or two Members. The tension is obvious: if the full Authority must include a legally experienced Member, can a single Member who happens to come from the finance or administration stream lawfully confirm an attachment? This question — whether the quasi-judicial function under Section 8 can be exercised by a Member without legal experience — is examined in detail below.
Qualifications of Members: Section 6(3)
Section 6(3) prescribes the qualifications for appointment. Under clause (a), a person is qualified for appointment as a Member from the field of law if he is qualified for appointment as a District Judge, or has been a Member of the Indian Legal Service and has held a post in Grade I of that service. Under clause (b), a person in the field of finance, accountancy or administration is qualified only if he possesses such qualifications as may be prescribed by the Central Government.
The legal-member qualification mirrors the threshold for district judicial office, signalling that the legally experienced Member is meant to bring genuine adjudicatory competence to the bench. The deliberate linkage to District Judge eligibility is what petitioners have leaned on when arguing that money-laundering adjudication — with its serious consequences for property rights — cannot be conducted by a bench wholly bereft of legal experience. Section 6(4) makes clear that the Central Government appoints one of the Members as Chairperson, and the Chairperson need not necessarily be the legal Member.
Benches and the single-Member problem: Section 6(5)
Section 6(5) is the operational heart of the controversy. Clause (a) provides that the Authority's jurisdiction may be exercised by benches. Clause (b) provides that a Bench may be constituted by the Chairperson with one or two Members as the Chairperson may deem fit. The plain effect is that a single Member can constitute a Bench and exercise the Authority's powers, including the power to confirm attachment under Section 8.
The constitutional challenge to single-Member functioning was considered by the Delhi High Court in J. Sekar v. Union of India (2018), where the validity of single-Member benches and the broader scheme of Section 6 was examined. The Court read Section 6(5)(b) as a deliberate legislative choice permitting flexible bench composition, and declined to strike it down. The Court's reasoning emphasised that the Authority performs a fact-finding, confirmation function subject to a full appellate remedy, so the absence of a multi-Member bench in a given case does not by itself vitiate the proceedings.
Transfer to a larger Bench: Section 6(6) and 6(7)
Section 6(6) empowers the Chairperson to transfer a Member from one Bench to another. Section 6(7) provides that if at any stage of the hearing of a case it appears to the Chairperson or a Member that the case is of such a nature that it ought to be heard by a Bench consisting of two Members, the case may be transferred by the Chairperson, or referred to him for transfer, to such Bench as the Chairperson may deem fit.
These provisions are the statutory safety-valve relied on by courts upholding single-Member functioning. The Telangana High Court, in the litigation arising out of the Karvy group attachments, reasoned that if every Section 8 confirmation required a legally experienced Member, the express permission for one-Member benches in Section 6(5)(b), read with the discretionary upgrade mechanism in Section 6(7), would be rendered nugatory and ineffective. The Court held that the legislature, having conferred the adjudicatory function on the Authority, intended it to be exercisable by a Bench constituted under Section 6(5)(b), with Section 6(7) available where complexity warranted two Members. The drafting, in other words, contemplates flexibility, not a rigid legal-member mandate for every case.
Term, salary, resignation and removal: Sections 6(8) to 6(13)
Section 6(8) fixes the tenure: the Chairperson and every Member hold office for a term of five years from the date on which they enter upon office, subject to a maximum age of sixty-five years. Section 6(9) provides for salary, allowances and conditions of service as prescribed, with the protection that they shall not be varied to the disadvantage of an incumbent after appointment — a standard safeguard for adjudicatory independence.
Section 6(10) addresses vacancies: where a vacancy arises in the office of the Chairperson or a Member, the Central Government fills it in accordance with the appointment provisions, and the proceedings may continue from the stage at which the vacancy arose. Section 6(11) deals with resignation: the Chairperson or a Member may resign by writing addressed to the Central Government, but is required to continue in office until the expiry of three months from the date of the notice, or until a successor enters office, or until the expiry of the term — whichever is earliest — unless permitted to relinquish office sooner. Section 6(12) provides that no Member shall be removed except by an order of the Central Government on the ground of proved misbehaviour or incapacity, after an inquiry. Section 6(13) provides that, on a vacancy in the office of the Chairperson by reason of death, resignation or otherwise, the senior-most Member shall act as Chairperson until a regularly appointed Chairperson enters office.
Vacancies do not invalidate proceedings: Section 6(14)
Section 6(14) is a curative provision. It declares that no act or proceeding of the Adjudicating Authority shall be questioned or be invalid merely on the ground of the existence of a vacancy or defect in the constitution of the Authority. This is a familiar legislative device that protects the continuity of adjudication against purely technical attacks. Courts have read it harmoniously with the composition challenges: it does not authorise a body constituted in a manner the Act forbids, but it does insulate proceedings from being set aside for transient vacancies or minor constitutional irregularities, especially where no prejudice is shown. The provision dovetails with the appellate safeguards to defeat the argument that every composition irregularity is automatically fatal.
Procedure: Section 6(15) and natural justice
Section 6(15) provides that the Adjudicating Authority shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and, subject to the other provisions of the Act, shall have power to regulate its own procedure. This sub-section captures the Authority's character precisely: it is freed from the rigidity of the CPC, but it is not freed from fairness. The twin pillars of natural justice — audi alteram partem (the right to be heard) and the rule against bias — bind the Authority in every adjudication.
The Delhi High Court in Dr. U.S. Awasthi v. Adjudicating Authority, PMLA (2023) engaged with the contours of the Authority's procedural freedom and its natural-justice obligations, reiterating that procedural flexibility under Section 6(15) does not dilute the affected person's right to a meaningful hearing before an attachment is confirmed. Read with Section 11 — which gives the Authority the same powers as a civil court in respect of discovery and inspection, enforcing attendance, compelling production of records, receiving evidence on affidavit and issuing commissions — the Authority is procedurally light but evidentially equipped to conduct a fair inquiry.
How the Authority actually adjudicates: Section 8
Section 6 constitutes the Authority; Section 8 tells it what to do. On receipt of a complaint under Section 5(5), or an application under Section 17(4) or 18(10), the Authority that has reason to believe a person has committed an offence under Section 3 or is in possession of proceeds of crime issues a notice under Section 8(1) calling upon that person to show cause, within not less than thirty days, why the attached or seized property should not be declared involved in money-laundering. Section 8(2) requires the Authority to consider the reply, hear the aggrieved person and the Director or his authorised officer, take into account all relevant material, and then record a finding whether the property is involved in money-laundering.
If the Authority so finds, Section 8(3) provides that it shall, by order in writing, confirm the attachment or retention of the property, which then continues during the pendency of proceedings relating to the scheduled offence before a court and (following the 2015 and 2019 amendments) for the periods specified in the provision. Where the Authority is not satisfied, it must decline to confirm, and the provisional attachment falls away — demonstrating that the adjudication is a genuine check rather than a rubber stamp. The Supreme Court in Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929, upheld the Section 8 scheme, characterising confirmation of attachment as a civil consequence distinct from the criminal trial, and stressing that the show-cause notice and opportunity of hearing built into Section 8 satisfy the demands of natural justice. The Court rejected the contention that the absence of a detailed mini-trial before the Authority offended due process, holding that the structured notice-reply-hearing mechanism, coupled with the appellate remedy, was constitutionally adequate. The judgment is the single most important authority on the function the Authority performs, and any answer on Section 6 should anchor itself to its reasoning on the civil character of attachment adjudication.
The 180-day rule and functus officio
Section 5(1), read with Section 5(3), gives a provisional attachment a maximum life of 180 days from the date of the order, unless confirmed under Section 8. The practical consequence is a hard deadline: the Adjudicating Authority must complete adjudication and pass a confirmation order within that window, failing which the provisional attachment lapses. This is what makes the Authority's timely functioning critical to the ED's enforcement strategy.
The High Courts have clarified the contours of this deadline. In the line of authority from the Calcutta High Court, it has been held that the Authority does not become functus officio on the mere expiry of 180 days from the provisional attachment order unless and until the order is confirmed (or fails to be confirmed) under Section 8 — though the underlying attachment ceases to have effect if confirmation does not occur within the statutory period. Subsequent decisions also recognised that the Supreme Court's COVID-19 limitation-extension directions applied to extend the period available for confirmation in attachment proceedings, a point accepted by the Delhi High Court. The interplay of the 180-day clock with the Authority's adjudicatory duty is a recurring examination favourite.
The composition litigation: legal member versus single member
The most contested question under Section 6 is whether a quasi-judicial confirmation under Section 8 can be made by a Bench that has no legally experienced Member. Petitioners have argued, relying on the proviso to Section 6(2) and on the Supreme Court's tribunal jurisprudence, that adjudication of property rights demands legal competence on the bench. They invoke R.K. Jain v. Union of India, (1993) 4 SCC 119, where the Supreme Court underscored the importance of legal expertise in the constitution of tribunals discharging judicial functions.
The counter-position, accepted by the Telangana High Court in the Karvy-group litigation, is that Section 6(5)(b) expressly permits one-Member benches and Section 6(7) supplies a mechanism to upgrade to two Members where the case warrants; reading in a mandatory legal-member requirement for every confirmation would render these provisions otiose. The Court held that the Authority, when confirming attachment, does not perform the functions of a court trying a lis but exercises a statutory adjudicatory power within the four corners of the Act, and that the robust appellate structure — an Appellate Tribunal headed by a person qualified to be a judge, with a further appeal to the High Court — cures any composition concern. The challenge mounted before the Telangana High Court, including in Hygro Chemicals Pharmtek Pvt. Ltd. v. Union of India, thus failed on the single-member point. The Court reasoned that the Authority, in confirming attachment, operates within a closed statutory remit and does not adjudicate competing private rights in the manner of a civil court, so the analogy to R.K. Jain-type tribunals discharging core judicial functions does not hold with full force. Aspirants should be able to articulate both sides: the textual flexibility argument that has prevailed, grounded in the express permission for one-Member benches and the safety-valve in Section 6(7), and the principled objection rooted in tribunal jurisprudence — that bodies determining valuable property consequences ought to carry legal expertise — which keeps the debate alive notwithstanding the High Court rulings. A balanced answer notes that the question has not been authoritatively foreclosed by the Supreme Court on the specific composition point, even as Vijay Madanlal upheld the broader Section 8 machinery.
Adjudicating Authority versus the Special Court
A clean conceptual line separates the Adjudicating Authority from the Special Court. The Special Court, designated under Section 43, tries the offence of money-laundering and can convict, sentence, and order confiscation on conviction under Section 8(5) to 8(8). The Adjudicating Authority does none of this. It confirms or refuses to confirm attachment and decides whether property is involved in money-laundering for the purpose of attachment — a determination that is civil and provisional in character, not a finding of guilt. Vijay Madanlal Choudhary drew this distinction sharply: the adjudication of attachment and the trial of the scheduled offence run on parallel tracks, and a finding by the Authority does not bind the criminal court on guilt. This is why the standard of satisfaction before the Authority (reason to believe, civil probabilities) differs from the criminal standard of proof beyond reasonable doubt that governs the trial — a distinction usefully illustrated by the eventual collapse of the prosecution in J. Sekar @ Sekar Reddy v. Directorate of Enforcement, where the Supreme Court quashed PMLA proceedings for want of a sustainable scheduled offence.
Exam takeaways and common traps
For judiciary and CLAT-PG candidates, Section 6 rewards precision. Remember: the Authority is constituted by Central Government notification (6(1)); it comprises a Chairperson and two Members with law, administration and finance/accountancy expertise (6(2)); the legal Member must be qualified to be a District Judge or have been Grade-I Indian Legal Service (6(3)); benches of one or two Members are permitted (6(5)); larger benches may be ordered for complex cases (6(7)); tenure is five years subject to age sixty-five (6(8)); vacancies do not invalidate proceedings (6(14)); and the Authority is not bound by the CPC but is bound by natural justice (6(15)).
Common traps: do not confuse the Adjudicating Authority with the Appellate Tribunal or the Special Court; do not assume the Chairperson must be the legal Member; and do not state that a single Member cannot confirm an attachment — the prevailing view, after the Telangana High Court litigation and J. Sekar v. Union of India, is that a single-Member Bench is competent. For the foundational scheme, revisit the genesis of the PMLA and the FATF recommendations, and for the full notes set, return to the PMLA notes hub.
Frequently asked questions
Who appoints the Adjudicating Authority under the PMLA?
Under Section 6(1), the Central Government appoints the Adjudicating Authority by notification to exercise the jurisdiction, powers and authority conferred by or under the Act. It is constituted by executive notification, not by a standing statutory bench.
What is the composition of the Adjudicating Authority?
Section 6(2) provides for a Chairperson and two other Members, with the proviso that one Member each shall have experience in the field of law, administration, finance or accountancy. The legal Member must be qualified for appointment as a District Judge or have held Grade I of the Indian Legal Service under Section 6(3).
Can a single Member confirm an attachment under Section 8?
Yes. Section 6(5)(b) permits a Bench of one or two Members. The Delhi High Court in J. Sekar v. Union of India (2018) upheld single-Member functioning, and the Telangana High Court in the Karvy-group litigation, including Hygro Chemicals Pharmtek Pvt. Ltd. v. Union of India, held that a Member need not have legal experience to exercise Section 8 powers, since reading in such a requirement would render Sections 6(5)(b) and 6(7) nugatory.
Is the Adjudicating Authority bound by the Code of Civil Procedure?
No. Section 6(15) provides that the Authority is not bound by the CPC, 1908, but shall be guided by the principles of natural justice and may regulate its own procedure. However, under Section 11 it has the same powers as a civil court for limited purposes such as discovery, enforcing attendance and receiving evidence on affidavit.
What is the difference between the Adjudicating Authority and the Special Court?
The Adjudicating Authority confirms or refuses to confirm attachment and decides whether property is involved in money-laundering — a civil, provisional determination. The Special Court under Section 43 tries the offence of money-laundering and may convict and order confiscation. As the Supreme Court held in Vijay Madanlal Choudhary v. Union of India (2022), these run on parallel tracks and the Authority's finding does not establish criminal guilt.
What is the 180-day rule and how does it affect the Authority?
Under Section 5(1) read with Section 5(3), a provisional attachment lapses after 180 days unless confirmed by the Adjudicating Authority under Section 8. The Authority must therefore complete adjudication within that window. Courts have held the Authority does not become functus officio merely on expiry of 180 days, but the attachment ceases to have effect if confirmation does not occur within the statutory period.