Money laundering cases under the Prevention of Money-Laundering Act, 2002

Section 3 makes it an offence to directly or indirectly attempt to indulge in, knowingly assist, or be involved in any process or activity connected with the proceeds of crime, including concealment, possession, acquisition, use, and projecting or claiming the property as untainted. The activity continues for as long as the person keeps enjoying the proceeds. Section 4 prescribes rigorous imprisonment of three to seven years and fine, rising to ten years where the proceeds relate to an offence in paragraph 2 of Part A of the Schedule.

The scheduled offence case matters throughout. In Pavana Dibbur (2023) the Supreme Court held that a PMLA accused need not be an accused in the scheduled offence, but benefits if all the accused there are acquitted or discharged, or if that case is quashed.

Under Section 50(2) and (3), ED officers down to Assistant Director can summon any person to give evidence or produce records, and that person must attend, state the truth and produce the documents asked for. Section 50(4) treats the proceeding as a judicial proceeding for Sections 193 and 228 of the IPC.

In Prem Prakash (2024) the Supreme Court held that when an accused is in custody under the PMLA, in whatever case, a Section 50 statement recorded by the same agency is inadmissible against him, because he is not operating with a free mind.

Section 19(1) allows arrest only on material in the officer's possession, after he records in writing his reason to believe that the person is guilty, and the person must be told the grounds of arrest as soon as may be. The person must be produced before the Special Court or a Magistrate within twenty-four hours.

In Pankaj Bansal (2023) the Supreme Court held that a copy of the written grounds must be given to the arrested person as a matter of course and without exception. Ram Kishor Arora v. Directorate of Enforcement, (2024) 7 SCC 599, accepted oral information at arrest followed by written grounds within twenty-four hours, and held that the Pankaj Bansal rule applies to arrests from 3 October 2023. In Mihir Rajesh Shah v. State of Maharashtra, 2025 INSC 1288, the Court held that written grounds, in a language the arrested person understands, are required for arrests under any law; if they cannot be given at the time of arrest, they must be given in writing at least two hours before the person is produced for remand, failing which the arrest and remand are illegal. Jaskaran Jeet Singh Deol v. State of Punjab, 2026 INSC 1022, follows it. The Delhi High Court has held that Mihir Rajesh Shah applies only to arrests made after 6 November 2025. Applying Pankaj Bansal, the Court in Prabir Purkayastha v. State (NCT of Delhi), (2024) 8 SCC 254, set aside the arrest and remand. In Arvind Kejriwal v. Directorate of Enforcement, (2024) 9 SCC 577, it said the Section 19 power is not for the purpose of investigation and that arrest can and should wait.

Under Section 45(1), bail is refused unless the Public Prosecutor has been heard and, if he opposes, the court is satisfied that there are reasonable grounds for believing the accused is not guilty and is not likely to commit an offence on bail. The Special Court may release a person under sixteen, a woman, a sick or infirm person, or a person accused of laundering less than one crore rupees without these conditions.

In Vijay Madanlal Choudhary, (2023) 12 SCC 1, the Supreme Court upheld Sections 3, 5, 19, 45, 50 and other provisions, and said the twin conditions restrict bail without imposing an absolute restraint. In Manish Sisodia (2024) the Court applied its earlier ruling in his case that, where custody is long and the trial delayed, a right to bail must be read into Section 439 of the CrPC (now Section 483 of the BNSS) and Section 45. In Prem Prakash (2024) it said bail is the rule even under the PMLA, and that the rigours of Section 45 can be relaxed where custody has been long and the trial will not end soon.

Under Section 5(1), an officer not below Deputy Director may provisionally attach property for up to one hundred and eighty days, recording in writing his reason to believe that someone holds proceeds of crime that may be concealed or transferred. Ordinarily a police report or complaint must already exist for the scheduled offence; the second proviso allows urgent attachment on recorded reasons.

Under Section 8(1), the Adjudicating Authority gives a notice of at least thirty days asking the person to show the sources used to acquire the property. It decides after hearing both sides under Section 8(2), and a confirmed attachment is recorded under Section 8(3). Under Section 26, an appeal lies to the Appellate Tribunal within forty-five days of receiving the order, with delay condonable for sufficient cause.

Under Section 44(1), the Section 4 offence and any connected scheduled offence are tried by the Special Court, which takes cognizance on a complaint by an authorised authority. A scheduled offence case pending elsewhere can be committed to it on the ED's application.

In Tarsem Lal (2024) the Supreme Court held that once the Special Court takes cognizance of the complaint, the ED cannot arrest an accused named in it under Section 19; if it wants custody, it must apply to the Special Court, which may allow custody only if custodial interrogation is needed. Where the ED did not arrest the accused before filing the complaint, the Special Court should issue a summons. An accused who appears is not in custody, so a bond under Section 88 of the CrPC is not bail. If he does not appear, the court may issue a warrant under Section 70 of the CrPC, starting with a bailable one.