Supreme Court cautions against ‘indiscriminate’ use of money laundering law

What is the News?

The Supreme Court has told the Enforcement Directorate(ED) that indiscriminate use of the Prevention of Money Laundering(PMLA) Act will dilute the relevance of the legislation.

What was the issue?

The Court was hearing two cases by petitioners who had been named as accused under the Prevention of Money Laundering(PMLA) Act.

What did the Supreme Court say?

The Supreme Court has cautioned ED against slapping the Prevention of Money Laundering (PMLA) Act indiscriminately even for minor offences and said it cannot be used as a weapon to put people behind the bars.

Further, the court said that the PMLA Act was enacted to catch big fish and not for minor offences involving Rs 10,000 or Rs 100. Hence, it should be used reasonably.

What is Money Laundering?

Money laundering is concealing or disguising the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources. It is frequently a component of other, much more serious, crimes such as drug trafficking, robbery or extortion.   

Few Important Provisions of PMLA Act

Section 45 of the PMLA Act makes it difficult for the court to grant bail/anticipatory bail to the accused once the anti-money laundering law was slapped on the person. 

Section 4 says that the offences under PMLA Act are to be treated as cognizable and non-bailable.

Source: This post is based on the article “Supreme Court cautions against ‘indiscriminate’ use of money laundering law” published in Indian Express on 16th Dec 2021.