3. Introduction
When a person uses his illicitly earned money to make a huge income and to use
it fairly can be termed generally as money laundering. However the section 3 of
the Prevention of the Money Laundering Act , 2002 defines more clearly as to what
is money laundering and even makes a person who knowingly assists or knowingly
indulges becomes party or is actually connected to any activity connected to
money laundering or even related to concealment , acquisition or use of such
money will be held liable to the offence of money laundering.
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4. The act in itself defines the procedure of the investigation of money laundering and
also the adjudicating authorities. Over the time there have been constant debates on
the questionless powers of the authorities under this act to make arrests or to deny
certain rights to the accused. Recently the apex court itself took to address the petition
regarding the unconstitutionality of the powers to make arrest under this act or the
confiscation of the property.
5. The Process
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• The process of the investigation of a matter goes through various stages according to the
Prevention of Money Laundering Act includes the registration of the FIR then the filing of ECIR
(Enforcement Case Information Report) , issuing summons under section 50 of the act and then
the filing of the final complaint in the Special Court. The adjudicating authorities if they find it fit
and reasonable can issue summon to a person under section 50 of the act.
• The summons are usually issued for the production of documents, evidences or to even conduct
an investigation under the act. Infact, the Additional Director, Joint Director and Deputy of
Assistant Director can issue summons to a person if he considers it necessary in order to
produce any records during the investigation or to hand over an evidence.
6. Cases
• as per the section of the Act the
adjudicating power of the authority is
same as the one given vested in the civil
court under the Code of Civil Procedure
,908 (5 of 908) while trying a suit and
this was also held in the case of G
Radhakrishnan v Assistant Director
(204) SCC online Mad 3980.
• In addition, every proceeding under sub-
section (2) and (3) of Section 50 of
PMLA is deemed to be a judicial
proceeding. In the case of B.
Narayanaswamy v Deputy Director
and Others (2019) SCC online Mad
32868, it was held that, every
proceeding under sub-section(2) and (3)
of Section 50 of PMLA, 2002 shall be
deemed to be a judicial proceeding
within the meaning of section 93 and
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7. Conclusion
• The statement made before
the enforcement directorate
is admissible during the
investigation however, if a
statement is made before a
police officer, then it is
inadmissible evidence.
Regarding the relevancy off
statements reordered after
the arrest if an accused
person is forced to be a
witness against himself then
it violates article 20(3) of the
Constitution as ED can force
individuals to give
statements through undue
influence.
• For another issue a petition was
filed to revisit the power of the
ED as authority and the apex
court recently held section 8(4)
of the act which talks about
possession of the property in
question before a formal order
of confiscation is passed should
be an exception and not a rule.
In the same court also stated
that the ED is "not required to
share the ECIR (Enforcement
Case Information Report) copy"
with the accused. This
document, the court said,
cannot be equated with an FIR
(First Information Report).
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8. Presentation title 8
In conclusion it can be stated that even if the act has been exhaustive in
defining the process of the investigation and to keep a check on the money
laundering , it is to be noted that the powers given to the officers under this
act for adjudicating their authority is extensive and can easily be misused and
a person who may or may not be accused of such offence may be made to give
a statement under coercion or undue influence or threat.
It is to be considered and understood that the purpose of the investigation id
to collect evidences , documents and issuing summons and it wont be violative
of article 20(3) of the Constitution unless a person is arrested and then
compelled to give a statement against himself.
