Key Points from the Judgment The Prevention of Money-Laundering Act, 2002 (PMLA) is a comprehensive legislation aimed at preventing money-laundering, confiscating property derived from or involved in such activities, and establishing mechanisms for coordination against money-laundering, including prosecution of those involved in processes connected to proceeds of crime. (!) (!) (!) (!) (!) The PMLA was enacted in response to international commitments under conventions like the Vienna Convention (1988) and Palermo Convention, addressing threats to financial systems, integrity, and sovereignty posed by money-laundering. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) The Act comprises ten chapters covering definitions, offences, attachment and confiscation, obligations of financial entities, summons and searches, Appellate Tribunal, Special Courts, authorities, reciprocal arrangements, and miscellaneous provisions. (!) Amendments to the PMLA (2005, 2009, 2012, 2015, 2016, 2018, 2019) strengthen mechanisms for prevention, detection, attachment, confiscation, and prosecution, aligning with international standards like FATF recommendations. (!) (!) The expression "proceedings" in Section 2(1)(na) of the PMLA is expansive, including inquiries by ED authorities, Adjudicating Authority, and Special Courts. (!) "Investigation" under Section 2(1)(na) encompasses all proceedings for evidence collection by the Director or authorized authorities, interchangeable with "inquiry" for adjudication purposes. (!) (!) (!) "Proceeds of crime" under Section 2(1)(u) includes property derived or obtained directly/indirectly from scheduled offences, or its value, including equivalents held abroad; the 2019 Explanation clarifies it covers property from any related criminal activity. (!) (!) (!) Not all crime property qualifies as "proceeds of crime"; only property derived/obtained as a result of criminal activity relating to a scheduled offence qualifies, requiring a direct link. (!) (!) The PMLA is sui generis, blending regulatory, preventive, and penal aspects to combat money-laundering's transnational impact. (!) Offence of money-laundering under Section 3 involves direct/indirect attempts to indulge or assist in processes/activities connected with proceeds of crime, including concealment, possession, acquisition, use, or projecting/claiming as untainted; the 2019 Explanation clarifies "and" as "or," making each act independent. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Money-laundering is a continuing offence tied to possession/use of proceeds, not limited to integration stage; it commences after property is derived from a scheduled offence. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) The 2019 Explanation to Section 3 is clarificatory, not expansive, aligning with Vienna/Palermo Conventions; "and" in Section 3 is interpreted as "or" to avoid frustrating legislative intent. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Scheduled offences under Section 2(1)(y) include offences in Parts A, B, C of the Schedule; inclusion/exclusion of offences is legislative policy, not judicially reviewable for arbitrariness. (!) (!) (!) (!) (!) (!) (!) Provisional attachment under Section 5 requires recorded reasons based on material showing possession of proceeds of crime likely to be concealed; operates for 180 days; second proviso (2015 amendment) allows immediate attachment to prevent frustration of proceedings, without prior FIR. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Section 5 safeguards include high-ranking officer involvement, written reasons, 180-day limit, forwarding to Adjudicating Authority, and cessation on expiry or Adjudicating Authority order. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Section 8 adjudication involves show-cause notice, hearing, and confirmation of attachment for up to 365 days or pendency of proceedings; possession under sub-section (4) is exceptional, not routine, until formal confiscation. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Searches/seizures under Section 17 require Director/Deputy Director authorization, recorded reasons, and forwarding to Adjudicating Authority; deletion of 2019 proviso aligns with prevention focus, not requiring prior FIR. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Search of persons under Section 18 mirrors Section 17 safeguards, with additional protections like female searches by females and witness presence; deletion of 2019 proviso upheld for preventive efficacy. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Arrest under Section 19 by high-ranking officials requires recorded reasons, informing grounds, and production within 24 hours; valid even pre-complaint, as PMLA inquiry differs from criminal investigation. (!) (!) (!) (!) (!) Burden of proof under Section 24 presumes involvement of proceeds in money-laundering upon establishing foundational facts (existence of proceeds, link to scheduled offence, person's involvement); rebuttable by accused via evidence. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Special Courts under Section 44 try money-laundering offences independently from scheduled offences; trials proceed separately, with jurisdiction based on money-laundering location; proviso in Clause (a) is directory. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) Bail under Section 45 requires twin conditions: opportunity for Public Prosecutor opposition and court satisfaction of non-guilt and non-likelihood of reoffending; applies to anticipatory bail; Section 436A CrPC provides relief after half maximum imprisonment. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) [p

Vijay Madanlal Choudhary vs Union of India

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(SC) 707

A. M. KHANWILKAR, DINESH MAHESHWARI, C. T. RAVIKUMAR
Vijay Madanlal Choudhary – Appellant
Versus
Union of India – Respondent

Advocates appeared:
For the Parties :Vikram Chaudhari, Nikhil Jain, Harshit Sethi, Sangram S. Saron, Rishi Sehgal, Keshavam Chaudhari, Prabhneer Swani, Arveen Sekhon, Hemant Shah, Vinod Kumar Jain, Satya Prakash, Suryanarayana Singh, Pragati Neekhra, Kapil Sibal, Mahesh Agarwal, Anshuman Srivastava, Prasouk Jawin, Rabiya Thakur, Nishant Rao, Arshit Anand, E.C. Agrawala, Kapil Sibbal, Dr. Abhishek Manu Singhvi, Mahesh Agarwal, Arijit Singh Khurana, Arshdeep Singh Khurana, Prateek K. Chadha, Ayush S., Adit S. Pujari, Amit Bhandari, Akshat Gupta, Madhavi Agrawal, Vaibhav Niti, Ambika Mathur, Shreedhar Kale, Raghav Tankha, Harsh Mittal, Shally Bhasin, Abhishek Manu Singhvi, Balaji Subramanian, Ishani Banerjee, SCV Vimal Pani, L Maheswari, Balaji Subramaniam, A. Lakshminarayanan, Ramesh, Sidharth Luthra, Tarun Dua, Anant Garg, Asif Ahmad, Adityaa Raju, Mukul Rohatgi, Sidharth Luthra, Suhaan Mukerji, Shri Singh, Aditya Dewan, Vishal Prasad, Chitralekha Das, Nikhil Parikshith, Asif Ahmad, Sanjivani Pattjoshi, Bharat Monga, Pankaj Singhal, Adityaa Raju, Dewang Singh Chauhan, Abhishek Manchanda, Kushagra Raghuvanshi, Chirag Madan, Shubhangini Jain, Ayush Kaushi, Hardik Rupal, Angaj Gautam, Yash Giri, Aaditya Raju, Sayandeep Pahari, Padma Venkataraman, Sayandeep Pahari, M/S. PLR Chambers And Co., Mukul Rohatgi, Suhaan Mukerji, Vivek Reddy, Shally Bhasin, Pratik Reddy, Victor Das, Anwesha Padhi, Madhavi Agrawal, Mohit Rai, Vikram Chaudhri, Atul Agarwal, Sourabh Kumar Mishra, Kumar Dushyant Singh, Vikram Chaudhry, Atul Agarwal, Vikram Chaudhri, Keshavam Chaudhri, Amit K. Nain, Harshit Sethi, Rishi Sehgal, Ria Khanna, Devanshu Yadav, Kapil Dahiya, Vikram Chaudhari, Raktim Gogoi, Varun Shekhar, Kartikeya Singh, Samarth Shandilya, Gautam Awasthi, . Vikram Chaudhri, Keshavam Chaudhri, Rishi Sehgal, Ria Khanna, Gautam Awasthi, Vikram Chaudhri, Harshit Sethi, Keshavam Chaudhri, Anzu K. Varkey, Rishi Sehgal, Ria Khanna, Kapil Dahiya, Devanshu, Vikram Chaudhari, Raktim Gogoi, Harshit Sethi, Kartikeya Singh, Avadh Bihari Kaushik, Rishi Sehgal, Keshavam Chaudhri, Ria Khanna, Kapil Dahiya, Vikram Chaudhari, Rishi Sehgal, Hemant Shah, Harshit Sethi, Keshavam Chaudhari, Ria Khanna, Avadh Bihari Kaushik, Vikram Chaudhri, Anand Dilip Dagga, Raktim gogoi, Kartikeya Singh, Rishi Sehgal, Ria Khanna, Avadh Bihari Kaushik, Tushar Mehta, SG Suryaprakash V. Raju, ASG Aman Lekhi, ASG K.M. Nataraj, ASG Kanu Agrawal, Rajat Nair, Sairica Raju, Sharadha Deshmukh, Neela Kedar Gokhale, Ritwiz Rishabh, Sharath Nambiyar, A k Sharma, Tushar Mehta,SG Aman Lekhi, ASG Zoheb Hussain, Shraddha Deshmukh Nisha Bagchi Binu Tamta Kanu Agrawal, Arvind Kumar Sharma, Tushar Mehta, SG Suryaprakash V. Raju, ASG K.M. Nataraj, Zoheb Hussain, Kanu Agrawal, Sairica Raju, Deepanshu Dutta, , Sughosh Subramanyajm, Shradha Deshmukh, Neela Kedar Gokhale, Ritwiz Rishabh, Sharath Nambiar, Arvind Kumar Sharma, Mukesh Kumar Maroria, Pranay Ranjan, Raj Bahadur Yadav, Tushar Mehta, Ld.SG S.V. Raju, ASG K.M. Nataraj, ASG Anshuman Singh, Ankit Bhatia, Arpit Goel, G.S. Makker, M.K.Maroria, Sairica Raju, Annam Venkatesh, Kanu Agrawal, Zoheb Hussain, Rajat N. Harsh Paul Singh, Vivek Gurnani, Shoaib Alvi, Om Prakash Shukla, Sanjay Kumar Tyagi, Deepabali Dutta, Shradha Deshmukha, Anvit Bhatia, Arvind Kumar Sharma, Tushar Mehta, SG S V Raju, ASG Kanu Agarwal, Zoheb Hossain, Mukesh Kumar Maroria, Deepabali Dutta, S.V.Raju, Aastha Mehta, Deepanwita Priyanka, Aishwarya Bhati, Archana Pathak Dave, Sughosh Subramanium, Swarupama Chaturvedi, B. V. Balaram Das, Aishwarya Bhati,ASG G.S Makker, Archana Pathak Dave, Swarupama Chaturvedi, Sughosh Subramanyam, A. Mariarputham, Avneesh Arputham, Anuradha Arputham, Praveen Kr. Singh, M/S. Arputham Aruna And Co, Tushar Mehta, SG SV Raju, ASG K.M. Nataraj, ASG Vijay Mandal C. Vinayak Sharma, Vats Joshi, Indira B, Anuj Udupa, Zoheb Hossain, Syed Abdul Haseeb, Kanu Agrawal, Digvijay, Dam, Rajat Nair, Adit Khorana, Sairica Raju, Mayank Pandey, Deepbali Datta, Mukesh Kumar Maroria, Tushar Mehta, SGI Jayant Kr. Sud, ASG S.V. Raju, ASG M.K. Maroria, Rajan Kr. Chourasia, Deepabali Duttai, Mayank Pandey, Sairica Raju, Syed Abdul Haseeb, Kanu Agarwal, Zoheb Hussain, Adit Khorana, Om Prakash Taygi, Tushar Mehta, SG Suryaprakash V.Raju, ASG Sairica Raju, Zoheb Hussain, Kanu Agrawal, Sughosh Subramanyam, B. Vinodh Kanna, Tushar Mehta, SG Aishwarya Bhati,ASG Rajat Nair, Shradha Deshmukh, Vansaja Shukla, Aishwarya Bhati, ASG Gurmeet Singh Makker, Archana Pathak Dave, Swarupama Chaturvedi, Sughosh Subramanyam, B.K. Satija, AAG Sanjay K., Samar Vijay Singh, AAG Ruchi Kohli, AAG Monika Gusain, Maninder Singh, Varun Shankar, Lakshman RS, Atharva Koppal, Divyanshu Jain, Arnav Narain, S.B. Upadhyay, Pawan R. Upadhyay, Sharmila Upadhyay, Anisha Upadhyay, Sarvjit Pratap Singh, Gaurav Prakash Pathak, Nishant Kumar, S. Niranjan Reddy, Raghenth Basant, Yogesh Raavi, Anirudh Reddy, Liz Mathew, Roopali Lakhotia, Siddharth Aggarwal, Shishir Mathur, Shohit Chaudhry, Vikramjit Banerjee, ASG Mukul Singh, D.L. Chidnanad, Amit Sharma, Rukhimini Bobde, A.K. Sharma, Pramod K. Dubey, Vivek Jain, Hemant Shah, Suchitra Kumbhat, Pramod Kumar Dubey, Hemant Shah, Prithveesh MK, Gurpreet S. Parwanda, Nishanth Patil, Malvika Kala, Adarsh Aggarwal, Ajay Aggarwal, Rajan Narain, Tushar Mehta, SG Suryaprakash V.Raju, ASG Sairica Raju, Zoheb Hussain, Kanu Agrawal, Sughosh Subramanyam, Raj Bahadur Yadav, Tushar Mehta, SG Mayank Pandey, Kanu Agarwal, Mukesh Kumar Maroria, Tushar Mehta, SG SV Raju,ASG Aman Lekhi, ASG Zoheb Hossain, Kanu Agarwal, Deepabali Datta, M.K. Maroria, Tushar Mehta, SG SV Raju, ASG Zoheb Hossain, Kanu Agrawal, Sairica S Raju, Sughosh Subramanyam, Raj Bahadur Yadav, Amit K Desai, S. HariHaran, Mr Naveen Malhotra, Mr S. Mahesh Sahasranaman, Mr Gopalkrishna Shenoy, Jaikriti S. Jadeja, Prapti Allagh, Varun K. Chopra, M/s VKC Law Offices, Dr. Menaka Guruswamy, Prateek K Chadha, Ayushi Rajput, Radhika Dhanotia, Yash S. Vijay, Shaffi Mather, Aabad Ponda, Parmatma Singh, Mayank Jain, Madhur Jain, Ms Neha Sharma, Binu Tamta, Arvind Kumar Sharma, Hitesh Kumar Sharma, S.K. Rajora, Akhileshwar Jha, E.Vinay Kumar, Dr. ( ) Vipin Gupta, Mayank Jain, Madhur Jain, Parmatma Singh, Sourabh Kapoor, Neeraj Kumar Sharma, Subhash Jadhav, Chandan Singh Shekhawat, Pranav Sarthi, Natabrata Bhattacharya, [ Awantika Manohar, Natasha Vinayak, S. Hari Haran, Jaikriti S. Jadeja, Prapti Allagh, Rakesh Dwivedi, Rajiv Shankar Dvivedi, Rishabh Jain, Sushant Kr. Sarkar, Arti Dvivedi, Jyoti Kumar Singh, Saurabh Mishra, Sunil Fernandes, Swaroop Anand, Nupur Kumar, Divyansh Tiwari, Nagendra R. Naik, Pai Amit, Pankhuri Bhardwaj, Saurabh Agrawal, Komal Mudhra, Abhiyudaya Vats, Bhavana Duhoon, Christi Jain, Mahesh Jethmalani, Hitesh Jain, Subhash Jadhav, Gunjan Mangla, Chadan Singh Shekhawat, Nikhil Ahuja, Pranav Sarthi, Tawanji Shukla, Malvika Kapila, Anjali Jha, Anjali Jha Manish, Priyadarshi Manish, Divyanshee Singh, Shivam Sharma, Raj Kishor Choudhary, Varun Raghavan, Shakeel Ahmed, Malvika Raghavan, Satish Pandey, Akbar Ali, Prabhoo Dayal Tiwari, Salim Ansari, Rajesh Pandey, Akbar Ali, Vikas Gupta, S. K. Verma, Vishal Shrivastava, Narender Hooda, Shaurya Lamba, Pallavi Hooda, Ashutosh Kumar, Seema Sindhu, Aalia Siddiqui, Dr. Surender Singh Hooda, Preeti Singh, Dr. G.K.Sarkar, Malbika Sarkar, Avadh Bihari Kaushik, Devanshu Yadav, Dr. G.K. Sarkar, Malbika Sarkar, Prashant Srivatav, Ayush Choudhary, Devanshu Yadav, Ayush Choudhary, Devanshu Yadav, Sameer Pandey, Gautam Awasthi, Gautam Awasthi, Ayush Choudhary, Devanshu Yadav, Sameer Pandey, Mukul Rohatgi, Omar Ahmed, Malak Manish Bhatt, Neeha Nagpal, Vishendra Tomar, Aditya Gupta, Jaspal Singh, Neeha Nagpal, Malak Manish Bhatt, Vijay Aggarwal, Mudit Jain, Yugant Sharma, Astha Sharma, Mantika Haryani, Ajit Sharma, Prithvees MK, Nishanth Patil, Shubhika Saluja, Malvika Kala, Kapil Sibal, Vivek Jain, Zulfiquar Memom, Mrinal Bharti, Parvez Memom, Chirag Naik, Vaijayanti Sharma, Nirvikar Singh, Manish Shekhari, Palash Bhatkoti, Vaijayanti Sharma, Nitin Sharma, Karan Bharihoke, Kunal Verma, E. M. S. Anam, Vishnu Shanker, Ranjana Roy Gawai, Vasudha Sen, Arshdeep Singh Khurana, Ujjawal Jain, Divya Roy, Sunil Kumar Jain, Fuzail Ahmad Ayyubi, Irshad Ahmad, Shailesh Madiyal, Sudhanshu Prakash, Vaibhav Sabhrawal Rakhi M., Rajan Parmar, Vinayaka S. Pandit, Neha Jain, Sudhanshu Prakash, Sruthi Iyer, Neha Jain, Shailesh Madiyal, Fuzail Ahmad Ayyubi, Kanishka Prasad Abbula kalam, Ibad Mushtaq, Akanksha Rai S.B. Upadhyay, Pawan Upadhyay, Sharmila Upadhyay, Anisha Upadhyay, S. S. Sastry, Rajender Vats, Nishant Kr. Gaurav P. Pathak Vipul Srivastav, Sarvjit Pratap Singh, M/S. Unuc Legal Llp, M/S. Ap & J Chambers, Bharadwaj S., Guru Prasanna S., Ranjit Kumar Sharma, Priya Puri, Arshdeep, Sharad Puri, Ranjay Dubey, Yati Sharma, G.Sivabalamurugan, Aljo K. Joseph, Ranjan Kumar, Shelna K., Nikilesh Ramachandran, Amit K. Nain, Manish Pratap Singh, Mahima Bhardwaj, Vivek Narayan Sharma, Manish Pratap Singh, Mahima Bhardwaj, Tushar Kumar, Rajeev Kumar Jha, Pranshu Kaushal, Shubham Awasthi, Ajay Singh, Abhinav Raghav, Braj K. Mishara, Vijay Kumar, Arun Raghavender, Bharti Tyagi, Shantanu M. Adkar, R. Lakshmishankar, S. Udaya Kumar Sagar, Bina Madhavan, Sanjay Indukuri, R. Narayan Kumar, Shanker, Akanksha Mehra, Narayan Verma, Rao Vishwaja, M/S. Lawyer’s S Knit & Co, Akshay Nagarajan, Rishi Malhotra, Sonia Dube, Shatadru Chakraborty, Kanchan Yadav, Surbhi Anand, M/S. Legal Options, Tanveer Ahmed Mir, Arjun Singh Bhati, Dhruv Gupta, , Vaibhav Suri, Prabhav Ralli, Urja Pandey, Amit Gupta, Akhilesh Dubey, Dharmesh Joshi, Uttam Dubey, Hari Sankar Mahaptra, Bhavini Sribastava, M/S. Mitter & Mitter Co., Neeraj Kumar Sharma, Gursharan S. Virk, Nakul Mohta, Misha Rohatgi, Devansh Shrivastava, Johnson Subba, Bharat Moga, Deepak Prakash, Abhishek A. Rastogi, Pratushpava Saha, Mahir Chablani, Rohit Ghosh, Kanika Sharma, M/S. Khaitan & Co., M. T. George, Susy, Johns George, Rashi Bansal, Shekhar G Devasa, Manish Tiwari, Shashi Bhushan Nagar, Prashanth R. Dixit, Thashmitha K.M. Ramesh Jadhav, Satvisa Pattanayak, M/S. Devasa & Co., M/S. Ap & J Chambers, Namit Saxena, Awnish Maithani, Arushi Dhawan, M.K. Subramanian, Vinodh Kanna B., Vinodh Kanna B., Ritesh Patil, Shamik Shirishbhai Sanjanwala, Diksha Rai, Ankit Agarwal, Prateek Bhardwaj, Mahfooz Ahsan Nazki, Polanki Gowtham, Shaik Mohamad Haneef, T. Vijaya Bhaskar Reddy, K.V. Girish Chowdary, Rajeswari Mukherjee, Devendra Kumar Singh, Karunakar Mahalik, B. Paramesh, Roopam Rai, Shyam Sundar Rai, Manoranjan Mishra, Gouranga Biswal, Anil Katiyar, Syed Ahmed Saud, Daanish Ahmad Syed, Mohd. Parvez Dabas, Uzmi Jameel Husain, Aqib Baig, Mohd. Shahib, Sunil Saraogi, Sarabjot Singh, M/S. Shakil Ahmad Syed, Dr. Sujay Kantawala, Azmat Hayat Amanullah, Nishant Awana, Sagar Chauhan, Nitya Sharma, Gaurav T. Shahi, Devansh Malhotra, Sujit Sahoo, Aditya Talpade, Divyesh Pratap Singh, Srishti Singh, Gautam Talukdar, A.P. Singh, Shreyansh Rathi, M/S. M. V. Kini & Associates, Sarvesh Singh Baghel, Mukhtar Alam, Natasha, B. Krishna Prasad, M B R S Raju, Balaji Srinivasan, Lakshmi Rao, Prateek Yadav, Garima Jain, Aakriti Priya, Shiva Krishnamurti, V. Shyamohan, Jaspreet Gogia, Mandakini Singh, Ashima Mandla, Mandakini Singh, Karanvir Gogia, Shivangi Singhal, Ashima Mandla, O. P. Gaggar, Ashoka Kumar Thakur, Imran Khan, Anil K. Chopra, Shreeyash U. Lalit, Mahesh Kumar, Vishal Sharma, Devika Khanna, V. D. Khanna, Aniruddha P. Mayee, Chirag M. Shroff, Amandeep Mehta, Gautam Awasthi, Ayush Choudhary, Devanshu Yadav, Gautam Awasthi, Ayush Choudhary, Gaurav Malhotra, Devanshu Yadav, Sameer Pandey, Samir Ali Khan, Rahul Chitnis, Sachin Patil, Aaditya A. Pande, Geo Joseph, Shwetal Shepal, V. N. Raghupathy, Nishe Rajen Shonker, Anu K. Joy, Alim Anvar, Akash Kakade, Somanatha Padhan, Swetab Kumar, Sukhada Kakade, Vishal Mahajan, AAG Anil Kumar, Suraj Kumar, Dr. Monika Gusain, Dinesh Kumar Sabharwal, Sameer Bhatnagar, Syed Mehdi Imam, V. Vasudevan, Aswathi M.K., Birj Kant Mishra, Hitesh Kumar Sharma, S.K. Rajora, Akhileshwar Jha, Maneesha Kongovi, R. Sudhinder, Prerana Amitabh, Shivabhushan Hatti, Shashank Dixit, R Gopalakrishan, V. Vasudev, Awasthi M.K., Malak Manish Bhatt, Gautam Khazanchi, Neeha Nagpal, Anshuman Sinha, Vijay K. Pande, Jaikriti S Jadeja, Pragya Sharma, Vinay Prakash, Amit, Maneesh Saxena, Vipin Kumar Saxena, Kajal Rani, Natasha Dalmia, Anand Varma, Parmatma Singh, Mayank Jain, Madhur Jain, A. Selvin Raja, Tanveer Ahmed Mir, Arjun Singh Bhati, Dhruv Gupta, Vaibhav Suri, Prabhav Ralli, Urja Pandey, Abhimanyu Bhandari Kartika Sharma Arav Pandit, Shreyansh Agrawal Rooh-e-Hina Dua, Rajive Bhalla, Rajiv Malhotra, Yajur Bhalla, Deepak Samota, Sumeir Ahuja, Shubham Bhalla, B. Vinodh Kanna, V. Purushothaman Reddy, Gurusharan S. Virk, Nakul Mohta, Misha Rohatgi Mohta, Devansh Shrivastava, Johnson Subba, Akash Kakade, Somanath Padhan, Ashok Anand, Rakesh Kr. Singh, Swetab Kumar, Rajiv Shankar Dvivedi, Rakesh Dwivedi, Rishabh Jain, Sushant Kr. Sarkar, Jyoti Kumar Singh, Arti Dvivedi, Saurabh Mishra, Sachin Jolly, Akshay Anand, Devanshu Yadav, Gautam Awasthi, Gautam Awasthi, Dr. G.K. Sarkar, Malbika Sarkar, Prashant Srivastav, Devanshu Yadav, Maneesha Kongovi R Sudhinder Prerana Amitabh Shivabhushan Hatti Shashank Dixit R Gopalakrishnan S. HariHaran, Jaikriti S. Jadeja, Vikas Singh, Vishal Gosain, Nagarkatti Kartik Uday, Deepika Kalia, Adya Rajkotia Luthra, Sandeep Sharma, Sunny Choudhary, E. C. Agrawala, Jaikriti S. Jadeja, Raj Kamal, Abhimanyu Bhandari, Kartika Sharma, Arav Pandit, Ananya Skri, Akarsh Sharma, Shreyansh Agrawal, Roohe Hina Dua, Tushar Mehta, SG Aman Lekhi, ASG M.K.Maroria, Deepabali Dutta Zoheb Hussain Kanu Agarwal Wills Mathews, Mathen Joseph, Devendra Kumar Tiwari, Paul John Edison, Rakesh Garg, Ashish Gopal Garg, Shweta Garg, Anshuman Srivastava, Tushar Mehta, SG Kanu Agrawal, Zoheb Hussain, Deepabali Dutta, Navanjay Mahapatra, Arvind Kumar Sharma, Tushar Mehta, SG S. V. Raju, ASG M.K.Maroria, Mayank Pandey, Deepabali Dutta, S.A. Haseeb, Sairica Raju, Zoheb Hussain, Adit Khorana, Kanu Agarwal, N. Hariharan, S. Hariharan, Ankur Chawla, Arshdeep Singh Khurana, Naveen Malhotra, S. Mahesh Sahasranaman, Gopalkrishna Shenoy, Jaikriti S. Jadeja, Prapti Allagh, V.K.Biju, Ria Sachthey, Chetanya Singh, Amlendu Kumar Akhilesh Kumar Jha, Abhay Pratap Singh, Shaji George, Vijay Laxmi, T. G. Narayanan Nair, Shweta Garg, G. Prakash, Tushar Mehta, SG Aishwarya Bhati, ASG Sanjay Jain, ASG Rajat Nair, Shradha Deshmukh , Vansaja Shukla, Arvind Kumar Sharma, D.Kumanan, Narender Kumar Verma, Pranav Sachdeva, K. Paari Vendhan, Uma Devi. M, Advocates

Judgement Key Points

Key Points from the Judgment

The Prevention of Money-Laundering Act, 2002 (PMLA) is a comprehensive legislation aimed at preventing money-laundering, confiscating property derived from or involved in such activities, and establishing mechanisms for coordination against money-laundering, including prosecution of those involved in processes connected to proceeds of crime. (!) (!) (!) (!) (!)
The PMLA was enacted in response to international commitments under conventions like the Vienna Convention (1988) and Palermo Convention, addressing threats to financial systems, integrity, and sovereignty posed by money-laundering. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
The Act comprises ten chapters covering definitions, offences, attachment and confiscation, obligations of financial entities, summons and searches, Appellate Tribunal, Special Courts, authorities, reciprocal arrangements, and miscellaneous provisions. (!)
Amendments to the PMLA (2005, 2009, 2012, 2015, 2016, 2018, 2019) strengthen mechanisms for prevention, detection, attachment, confiscation, and prosecution, aligning with international standards like FATF recommendations. (!) (!)
The expression "proceedings" in Section 2(1)(na) of the PMLA is expansive, including inquiries by ED authorities, Adjudicating Authority, and Special Courts. (!)
"Investigation" under Section 2(1)(na) encompasses all proceedings for evidence collection by the Director or authorized authorities, interchangeable with "inquiry" for adjudication purposes. (!) (!) (!)
"Proceeds of crime" under Section 2(1)(u) includes property derived or obtained directly/indirectly from scheduled offences, or its value, including equivalents held abroad; the 2019 Explanation clarifies it covers property from any related criminal activity. (!) (!) (!)
Not all crime property qualifies as "proceeds of crime"; only property derived/obtained as a result of criminal activity relating to a scheduled offence qualifies, requiring a direct link. (!) (!)
The PMLA is sui generis, blending regulatory, preventive, and penal aspects to combat money-laundering's transnational impact. (!)
Offence of money-laundering under Section 3 involves direct/indirect attempts to indulge or assist in processes/activities connected with proceeds of crime, including concealment, possession, acquisition, use, or projecting/claiming as untainted; the 2019 Explanation clarifies "and" as "or," making each act independent. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Money-laundering is a continuing offence tied to possession/use of proceeds, not limited to integration stage; it commences after property is derived from a scheduled offence. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
The 2019 Explanation to Section 3 is clarificatory, not expansive, aligning with Vienna/Palermo Conventions; "and" in Section 3 is interpreted as "or" to avoid frustrating legislative intent. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Scheduled offences under Section 2(1)(y) include offences in Parts A, B, C of the Schedule; inclusion/exclusion of offences is legislative policy, not judicially reviewable for arbitrariness. (!) (!) (!) (!) (!) (!) (!)
Provisional attachment under Section 5 requires recorded reasons based on material showing possession of proceeds of crime likely to be concealed; operates for 180 days; second proviso (2015 amendment) allows immediate attachment to prevent frustration of proceedings, without prior FIR. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Section 5 safeguards include high-ranking officer involvement, written reasons, 180-day limit, forwarding to Adjudicating Authority, and cessation on expiry or Adjudicating Authority order. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Section 8 adjudication involves show-cause notice, hearing, and confirmation of attachment for up to 365 days or pendency of proceedings; possession under sub-section (4) is exceptional, not routine, until formal confiscation. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Searches/seizures under Section 17 require Director/Deputy Director authorization, recorded reasons, and forwarding to Adjudicating Authority; deletion of 2019 proviso aligns with prevention focus, not requiring prior FIR. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Search of persons under Section 18 mirrors Section 17 safeguards, with additional protections like female searches by females and witness presence; deletion of 2019 proviso upheld for preventive efficacy. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Arrest under Section 19 by high-ranking officials requires recorded reasons, informing grounds, and production within 24 hours; valid even pre-complaint, as PMLA inquiry differs from criminal investigation. (!) (!) (!) (!) (!)
Burden of proof under Section 24 presumes involvement of proceeds in money-laundering upon establishing foundational facts (existence of proceeds, link to scheduled offence, person's involvement); rebuttable by accused via evidence. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Special Courts under Section 44 try money-laundering offences independently from scheduled offences; trials proceed separately, with jurisdiction based on money-laundering location; proviso in Clause (a) is directory. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Bail under Section 45 requires twin conditions: opportunity for Public Prosecutor opposition and court satisfaction of non-guilt and non-likelihood of reoffending; applies to anticipatory bail; Section 436A CrPC provides relief after half maximum imprisonment. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) [p

JUDGMENT :

A.M. Khanwilkar, J.

Table of Contents

Particulars	Paragraph No(s).
Preface	1(a)-(d)
Submissions of the Private Parties
Mr. Kapil Sibal, Senior Counsel	2(i)–(xxiii)
Mr. Sidharth Luthra, Senior Counsel	3(i)–(iii)
Dr. Abhishek Manu Singhvi, Senior Counsel	4(i)–(ix)
Mr. Mukul Rohatgi, Senior Counsel	5(i)-(iii)
Mr. Amit Desai, Senior Counsel	6(i)-(iii)
Mr. S. Niranjan Reddy, Senior Counsel	7(i)-(ii)
Dr. Menaka Guruswamy, Senior Counsel	8(i)-(v)
Mr. Aabad Ponda, Senior Counsel	9(i)-(ii)
Mr. Siddharth Aggarwal, Senior Counsel	10(i)-(iii)
Mr. Mahesh Jethmalani, Senior Counsel	11(i)-(iii)
Mr. Abhimanyu Bhandari, Counsel	12(i)-(iv)
Mr. N. Hariharan, Senior Counsel	13
Mr. Vikram Chaudhari, Senior Counsel	14(i)-(v)
Mr. Akshay Nagarajan, Counsel	15
Submissions of the Union of India
Mr. Tushar Mehta, Solicitor General of India	16(i)-(lxxx)
Mr. S.V. Raju, Additional Solicitor General of India	17(i)-(lxvi)
Consideration
The 2002 Act	19-22
Preamble of the 20

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2022 Supreme(SC) 707

A. M. KHANWILKAR, DINESH MAHESHWARI, C. T. RAVIKUMARVijay Madanlal Choudhary – AppellantVersusUnion of India – Respondent

Key Points from the Judgment

Cases Referred (204)

A. M. KHANWILKAR, DINESH MAHESHWARI, C. T. RAVIKUMAR
Vijay Madanlal Choudhary – Appellant
Versus
Union of India – Respondent