Bharatiya Nagarik Suraksha Sanhita, 2023
Section 120
Forfeiture of property in certain cases
(1) The Court may, after considering the explanation, if any, to the show-cause notice issued under section 119 and the material available before it and after giving to the person affected (and in a case where the person affected holds any property specified in the notice through any other person, to such other person also) a reasonable opportunity of being heard, by order, record a finding whether all or any of the properties in question are proceeds of crime: Provided that if the person affected (and in a case where the person affected holds any property specified in the notice through any other person such other person also) does not appear before the Court or represent his case before it within a period of thirty days specified in the show-cause notice, the Court may proceed to record a finding under this sub-section ex parte on the basis of evidence available before it.
(2) Where the Court is satisfied that some of the properties referred to in the show-cause notice are proceeds of crime but it is not possible to identify specifically such properties, then, it shall be lawful for the Court to specify the properties which, to the best of its judgment, are proceeds of crime and record a finding accordingly under sub-section (1).
(3) Where the Court records a finding under this section to the effect that any property is proceeds of crime, such property shall stand forfeited to the Central Government free from all encumbrances.
(4) Where any shares in a company stand forfeited to the Central Government under this section, then, the company shall, notwithstanding anything contained in the Companies Act, 2013 (18 of 2013) or the Articles of Association of the company, forthwith register the Central Government as the transferee of such shares.
Why this exists
Criminal proceeds are often hidden in property, shares, or assets held in someone else's name to escape the law. This provision, part of a chapter on tracing and forfeiting property linked to crime, gives courts a structured process: notice, hearing, and then a binding finding that strips wrongdoers (or their nominees) of assets bought with crime money. It balances the state's interest in not letting crime pay against the individual's right to be heard before losing property, echoing older forfeiture frameworks like SAFEMA used for smugglers' and foreign-exchange offenders' illegal wealth.
How courts read it
Because the BNSS came into force only in 2024, there is no significant case law interpreting this exact section yet. However, courts have long upheld similar forfeiture schemes (for example, in Attorney General for India v. Amratlal Prajivandas, 1994, on SAFEMA) as constitutionally valid, provided the person affected gets a genuine opportunity to explain the source of the property before forfeiture is ordered. That basic due-process requirement — notice, explanation, and hearing before confiscation — is expected to guide how courts apply this provision too.
Common misconceptions
- Myth: The government can just take property without any court process.
Fact: The law requires a court hearing and a chance for the owner to explain before any forfeiture finding is made. - Myth: If the owner ignores the notice, the case is dropped.
Fact: If the person doesn't respond within 30 days, the court can decide the matter ex parte based on available evidence, and forfeiture can still happen. - Myth: Existing loans or mortgages on the property survive forfeiture.
Fact: Once forfeited, the property passes to the Central Government free of all encumbrances, meaning existing claims like mortgages are extinguished.