Prevention of Money Laundering Act (PMLA)

Some of the recent significant judgments of the Supreme Court pertaining to the Prevention of Money Laundering Act (PMLA) include:

Vijay Madanlal Choudhary case (State of Maharashtra, (2005) 5 SCC 294): The Supreme Court clarified that unaccounted property acquired through legal means does not automatically constitute proceeds of crime unless treated as such by tax legislation. Furthermore, not all properties attached by investigating agencies in connection with criminal activity are considered proceeds of crime. The property must be directly or indirectly derived from criminal activity related to a scheduled offence to fall under this category.

Directorate of Enforcement v. Padmanabhan Kishore (2022 SCC OnLine SC 1940, [2022]): The Supreme Court ruled that bribe-giving requires specific intent. If money is handed over without the intention of bribing, it is not considered a bribe but may constitute misappropriation. This judgment underscores the importance of intent in defining proceeds of crime under money laundering laws.

Murali Krishna Chakrala (Crl.M.P.No.2864 of 2022) case: Chartered Accountants and Panel Advocates cannot be prosecuted for providing certificates or opinions based on documents provided by clients, provided they are not required to verify the authenticity of those documents. However, failing to certify authenticity when required can lead to prosecution.

Rajiv Chakraborty Resolution Professional of EIEL case (2022 SCC OnLine Del 3703): The court clarified that an attachment order by the Enforcement Directorate does not render the corporate debtor or the Resolution Professional powerless. They possess avenues for legal redress, and the provisional attachment order does not confer superior rights to the Enforcement Directorate over the property.

V. Senthil Balaji case (Cr Appl 2284-2285 of 2023): This judgment emphasized strict adherence to procedures laid out in the PMLA when making arrests under the Act. Non-compliance with these procedures could invalidate the arrest.

Pankaj Bansal case (Cr Appl 3051-3052 of 2023): The Supreme Court held the Enforcement Directorate accountable for procedural mandates, stressing the need for transparency, fairness, and adherence to constitutional and statutory provisions during arrests and investigations.