Freezing of Assets under Section 51 A of Unlawful Activities Prevention Act, 1967: A means of deterring the terrorist activities in India

UAPA, 1967, that is the Unlawful Activities Prevention Act is a legislation dating back to fifty years. The act was legislated for the competent determent of unlawful and illegal activities including that of terrorist activities which are harmful to the integrity, sovereignty and the safety of India. The act has withstood major amendments in the years 2004, 2008, 2012 and 2019. India, with such a diverse population has always found itself as the target of various rebel groups, religious and political organizations, naxal groups, terrorist organizations who have possessed a clearly destructive as well as hateful ideologies towards the country and have worked towards the ruination and the annihilation of its peace.

UAPA is utilized as a tool by the State to keep a watchful eye on the illegal activities and bring them to a curb. The legislation vests the governmental authorities with the right to take the required action against the offenders.

As per Section 51A, For the prevention of, and for coping with terrorist activities, the Central Government shall have power to—

  • freeze, seize or attach funds and other financial assets or economic resources held by, on behalf of or at the direction of the individuals or entities listed in the Schedule to the Order, or any other person engaged in or suspected to be engaged in terrorism
  • prohibit any individual or entity from making any funds, financial assets or economic resources or related services available for the benefit of the individuals or entities listed in the Schedule to the Order or any other person engaged in or suspected to be engaged in terrorism;
  • prevent the entry into or the transit through India of individuals listed in the Schedule to the Order or any other person engaged in or suspected to be engaged in terrorism.]

The addition of this particular section to UAPA, 1967 can be owed to the amendment of 2008. The Central Government, in the year 2009, released an order which encompassed within itself a meticulous procedure for the application and implementation of Section 51A. It specifically talks about preventing and coping with terrorist activities.

The responsibility of keeping the list of those individuals or organizations who and which are to be subjected to the sanction measures of the UN lies upon the Ministry of Home Affairs. These lists are further communicated by regulators to banks, stock exchanges, intermediaries which are regulated by SEBI, insurance companies, UAPA nodal officers of all the states of India as well as union territories, the immigration authorities, real estate agents and the deals who deal in valuable metals and stones.

Concerning the funds, financial assets, economic resources which are held by the individuals mentioned in the list of MHA, referred to as designated  individuals/entities and where all these resources are held in the form of bank accounts, insurance policies or stocks, notifications and guidelines are issued by the financial regulators to banks, stock exchanges, intermediaries regulated by the SEBI and insurance companies. These notifications necessitate them to upkeep an electronically updated list of the designated individuals and entities, based on the list provided by MHA and run regular checks on them to ascertain whether they are the holders of any funds or related resources. In case, a match is found between any customer and these individuals/entities, it is the responsibility of all the aforementioned institutions to relay the complete information of such individuals/entities to the Central Nodal Officer of UAPA.

The same information is also supposed to be sent to the Nodal Officer of the State or the Union Territory where the individual/entity is a holder of the account in question. A verification process to be conducted by the Police of that particular State or a Central Agency is initiated to establish the fact that the designated individuals/entities are the same as the ones which have been identified by banks, stock exchanges, intermediaries and insurance companies. In case the verification gets completed and the information relayed by the bank is proved to be legible and true, an order for the freezing of the assets of such individuals/entities is issued by the Central Nodal Officer immediately and the same is communicated to the concerned bank, depository and the insurance company as well. The Central nodal officer for the UAPA legislation is vested with the responsibility of forwarding a copy of the order to all the Principal Secretaries or Secretaries, Home Department of the States/UTs and all UAPA nodal officers in the country.  This process is carried out to ensure that no individual or entity contributes any funds or financial assets which would provide benefits to the designated individuals/entities and help them in furthering their propaganda of terrorism. The

 Central Nodal Officer also communicates the same to all Directors General of Police/ Commissioners of Police of all States/Union Territories so that they can commence and take an action against these terrorist activities under the for Unlawful Activities Prevention Act.

It is not necessary to provide a prior notice of the order to the designated entity/individual before the issuance of the order.

When it come to the economic resources or financial assets which are of an immovable nature, the Central Nodal officer is required to forward a list of designated individuals/entities by electronic means to the nodal officers designated to states or union territories so that they can initiate the procedure of verification concerning if the designated individuals/entities are the current holders of any financial assets or economic resources of an immovable nature. The verification is carried out with the help of records of the Registrar’s office. If the designated individuals/entities are found as the holders of assets of immovable nature, the nodal officers of states or union territories communicate the complete details of those assets to the Central Nodal officer.

The further procedural implementation is similar to the one carried out in case of funds, financial assets, economic resources of designated individuals/entities  held in the form of bank accounts, insurance policies or stocks, notifications and guidelines are issued by the financial regulators to banks, stock exchanges, intermediaries regulated by the SEBI and insurance companies.

Concerning the real-estate agents and dealers of valuable metals or stones and other Designated Non-Financial Businesses and Professions (DNFBPs), a list of designated individuals/entities is circulated among the above-mentioned categories of business/business owners by the regulators. The Central Board of Excise and Customs has a released advisory advising the dealers of valuable metals and stones to not proceed with any transaction with the designated individuals/entities and to immediately inform the Central Board of Excise and Customs which will then proceed in the same manner as is done in the cases of financial assets or economic resources of immovable nature and  funds, financial assets, economic resources of designated individuals/entities  held in the form of bank accounts, insurance policies or stocks, notifications and guidelines are issued by the financial regulators to banks, stock exchanges, intermediaries regulated by the SEBI and insurance companies.

Sources:

  1. https://www.mha.gov.in/sites/default/files/ProcedureImplementationSection51A_30032021.pdf

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