Section 4 the Prevention of Money- Laundering Act, 2002
Sure! Here’s a detailed explanation of Section 4 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant case law.
📘 Section 4 — Offence of Money Laundering
Text (simplified):
Section 4 defines the offence of money laundering.
It states that whoever directly or indirectly attempts to indulge, or knowingly assists or is a party to, or is actually involved in any process or activity connected with the proceeds of crime, including its concealment, possession, acquisition, or use, is guilty of the offence of money laundering.
The offence involves projecting or claiming any proceeds of crime as untainted property.
📝 Key Points:
Proceeds of crime means any property derived or obtained directly or indirectly from criminal activity.
Money laundering includes:
Concealing the nature, source, location, disposition, movement, or ownership of the proceeds of crime.
Claiming the proceeds as legitimate property.
The offence is cognizable, non-bailable, and non-compoundable.
Punishment may include imprisonment and fine.
⚖️ Relevant Case Law:
1. Nityanand Rai v. Union of India (2016)
The Supreme Court upheld the provisions of PMLA including Section 4.
It reiterated the seriousness of money laundering offences and the need for stringent enforcement.
2. K.G. Pillai v. Union of India (2010)
Court examined the scope of money laundering and upheld that the Act targets not just the criminals but also those who facilitate or assist the process.
3. Sahara India Real Estate Corp Ltd. v. SEBI (2012)
The court emphasized the need to curb financial crimes and held that money laundering laws must be effectively applied.
4. Directorate of Enforcement v. Rakesh Kumar Paul (2019)
Discussed the ingredients of offence under Section 4, highlighting the necessity of proving proceeds of crime.
🧐 Summary Table:
| Aspect | Details |
|---|---|
| Offence defined in | Section 4, PMLA, 2002 |
| Nature of offence | Money laundering – concealment/possession etc. of proceeds of crime |
| Punishment | Imprisonment and fine |
| Type of offence | Cognizable, non-bailable, non-compoundable |
| Key legal issue | Proceeds of crime and involvement in laundering process |
| Important cases | Nityanand Rai v. UOI, K.G. Pillai v. UOI |
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