PMLA and Law

PMLA and Law

In context of PMLA, 2002 it is held in Bhagwan Bhagat v. Union of India [2025] GCtR 1920 (Jharkhand) that "the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever."

Further, the foundational premise of the PMLA is the laundering of "proceeds of crime," irrespective of whether the scheduled offence arises under the IPC or a special statute. Once the commission of the scheduled offence generates proceeds, the laundering of such proceeds falls squarely within Section 3 of the PMLA. 

the "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence, meaning thereby, the words “any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence” will come under the fold of the proceeds of crime. 

defence on merit is not to be considered at the time of stage of framing of charge and that cannot be a ground of discharge. However, the defence of the accused cannot be looked into at the stage of discharge. The accused has no right to produce any document at that stage. 

In the aforesaid context, it needs to refer herein that the Hon’ble Apex Court in Pavna Dibbur v. Directorate of Enforcement (Criminal Appeal No. 2779/2023) held that who could commit an offence under the PMLA may not be named in the scheduled offence.

It has further been clarified that if a person who is unconnected with the scheduled offence, knowingly assists the concealment of the proceeds of crime or knowingly assists the use of proceeds of crime, in that case, he can be held guilty of committing an offence under Section 3 of the PMLA. Therefore, it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence.