29 July, 2022
10 Min Read
The Supreme Court of India upheld the constitutional validity of the Prevention of Money Laundering Act's (PMLA) controversial “twin conditions for bail” i.e., the trial court needs to give bail only if the accused proves he is not guilty of money laundering. If the accused gets bail, he also has to prove that he is not likely to commit any offence while on bail.
By upholding the reverse burden of proof condition for bail, the court also overruled its own rule in 2017 in Nikesh Tarachand Shah vs Union of India, where the court declared the twin test as unconstitutional.
More about the case
What has the Supreme Court said in the Ruling?
Criticism of the Ruling
Around 4,700 cases are being investigated by the ED under the Prevention of Money Laundering Act (PMLA). Also, ED raids jumped 27 times during 2014-2022 as per the figures provided in the Rajya Sabha.
Dirty Money & Money Laundering
Dirty Money: Criminal activities like illegal arms sales, smuggling, drug trafficking and prostitution rings, insider trading, bribery and computer fraud schemes produce large profits and the money which is generated by this activity is known as dirty money.
Steps of Money laundering:
About Prevention of Money Laundering Act (PMLA) 2002
Definition of money laundering
Sec. 3 of PMLA defines the offence of money laundering as whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of the offence of money-laundering.
PMLA prescribes the obligation of banking companies, financial institutions and intermediaries for verification and maintenance of records of the identity of all its clients and also of all transactions and for furnishing information of such transactions in a prescribed form to the Financial Intelligence Unit-India (FIU-IND).
Empowerment of officers:
Setting up of Authority:
It envisages the designation of one or more courts of sessions as Special Courts or Special Courts to try the offences punishable under PMLA and offences with which the accused may, under the Code of Criminal Procedure 1973, be charged at the same trial.
Agreement for Central Government:
It allows the Central Government to enter into an agreement with the Government of any country outside India for enforcing the provisions of the PMLA, exchange of information for the prevention of any offence under PMLA or under the corresponding law in force in that country or investigation of cases relating to any offence under PMLA
Source: The Hindu
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