Finance

PML Act 2002: Special Courts, Role of Police, Duty of other Departments

The legal denotation of the term Money Laundering is to process illegally obtained money through a legitimate business or send it to a foreign account and when it returns, no one can identify its original source. Money laundering involves three step transactions wherein the criminal places the illegally obtained money into the formal financial system and then the money is layered or spread out into several transactions within the financial system so that the origin of the money is lost. Eventually, the money gets integrated into the financial system. Let’s look at other facets of PML Act 2002.

Features of the PML Act 2002

Section 3 of the Act defines the term money laundering; section 4 prescribes punishment for the offences categorized in Para 2 of part A of the Act. Under the relevant sections of this act, Director, Financial Intelligence Unit and Director (Enforcement) have been conferred with concurrent powers to implement the provisions of this Act.

Special Courts under PML Act 2002

The Act states that the Central Government, shall, in consultation with the Chief Justice of the HC, for trial of offence punishable under Section 4, designate one or more courts of session as special court or special courts or such area/s or for such case/class/group of cases. The Act further states that at the time of trying an offence under the Act, a special court will also try an offence apart from an offence referred to in sub-section (1), with which the accused may be charged under CrPc at the same trial.

Here an issue may arise regarding the power of Special courts to try offences specified in the Act and some other offences at the same trial. This invokes the principle of double jeopardy.

As per Section 43(1), it provides for establishment of a special court (Sessions Court) for prosecuting offenders under Section 4 of the Act. Further, Section 43(2) empowers special courts to try offences other than those specified under sub-section (1), under which accused person may be charged (CrPc) at the same trial. 

If we refer Section 26 of the General Clauses Act, 1897- where an act or omission constitutes an offence under 2 or more enactments, the accused will be liable for prosecution and shall be punished under either of those two enactments. Further, Section 300 (CrPc, 1973) provides that a person once convicted or acquitted cannot be tried for the same offence.

Here one can find that the PML Act 2002 provides protection against double jeopardy. The principle of double jeopardy has been recognised under various laws in India and enacted under General Clauses Act and under CrPc. We should be aware that in the PMLA, different offences from various legislations are scheduled under different paras. Further, these scheduled offences and offences under the definition of money laundering can be tried by special courts only.

Special courts have been given vast powers to try offences of money laundering and offences relating to it which means no other courts can try offences punishable under Section 4 of PML Act.

Role of Police under PML Act

This Act subsides the role of police bestowing the powers to investigate into the offence under this Act to the authorities appointed by the Central government. Initially, the power under the Act was conferred to a police officer only, but in order to remove some issues, the principal act was amended by the PML Amendment Act of 2005^[1].

Similarly, under the PML Amendment Act 2009, certain changes in provisions of power of search and seizure were made and proposed to allow investigating agencies to take up the matter at the time of filing of report by police under Section 173 CrPc in those offences where police are the investigating authorities and the time of filing of complaint before the magistrate/court by persons in respect of offences wherein police authorities are not the investigating agencies.

Role of other departments assisting Enforcement authorities under PMLA

The Enforcement Directorate under the Government of India, investigates the offences under the Act. The Financial Intelligence Unit under the revenue department is an independent body which reports directly to the Economic Intelligence Council headed by the Finance Minister. The Financial Intelligence Unit is the central national agency which is responsible for dealing with the information related to suspect financial transactions.

The scheduled offences are investigated separately by agencies under different acts like police, CBI, SEBI or such other agency, as the case may be.

Section 54 of the Act proposes to empower officers from different departments such as custom and central excise department, officers under Section 5 of the NDPS, Income Tax authorities, RBI enforcement officers and such other officers. Here these officers are empowered to help enforcement authorities in their proceedings under the Act and the officers under PML Act are entitled to get assistance from such officers.

Conclusion

The PML Act 2002 has clearly defined the scope of powers of all investigative and related agencies. Chapter V of the Act specifies about the power to search, summon and seizure, whereas Chapter VII specifies special courts under the act and Chapter VIII explains the role of various authorities. The enforcement authorities have been conferred with concurrent powers to implement the provisions of this Act.

Read our article:Prevention of Money Laundering Act: Concept of Search & Seizure