Money laundering, as defined under the Prevention of Money Laundering Act, 2002 (PMLA), entails a direct or indirect attempt to indulge in or knowingly assist or being a party to or being involved in any process or activity connected with the proceeds of crime. “Proceeds of crime” means any property derived or obtained, directly or indirectly, as a result of criminal activity relating to an offence set out in the schedule to the PMLA, which lists offences under 26 statutes and certain offences under the Indian Penal Code, 1860.
The penalty is severe: rigorous imprisonment for a term of three years, which may extend to seven years and a monetary penalty. Similarly, bail pending trial has been severely circumscribed. Under section 45(1) of the PMLA, the public prosecutor must have the opportunity to oppose bail and if bail is opposed, the special court must be satisfied of the existence of reasonable grounds for believing that the accused is not guilty of the offence. Contrary to the maxim “innocent until proven guilty”, the accused must satisfy the court before trial commences that they are not guilty.
Strangely, while a person arrested under the PMLA could not be released on bail without meeting the conditions prescribed by section 45, a person apprehending arrest for money laundering may be granted anticipatory bail under the Code of Criminal Procedure, 1973.
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Deepak Biswas is a partner and Sneha Jaisingh is a senior associate at Bharucha & Partners.
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