VIJAY MADANLAL CHOUDHARY & ORS. versus UNION OF INDIA & ORS.

Citation: [2022] 6 S.C.R. 382 · Decided: 27-07-2022 · Supreme Court of India · Bench: A.M. KHANWILKAR · Disposal: Reference answered

Cited by 13 judgment(s) · cites 183 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 6 S.C.R.
VIJAY MADANLAL CHOUDHARY & ORS.
v.
UNION OF INDIA & ORS.
(Special Leave Petition (Criminal) No. 4634 of 2014)
JULY 27, 2022
[A. M. KHANWILKAR, DINESH MAHESHWARI AND
C. T. RAVIKUMAR, JJ.]
Prevention of Money Laundering Act, 2002 – s.2(1), Clause
(na) – Expression “proceedings” therein – Held: The expression
“proceedings” occurring in Clause (na) of s.2(1) is contextual and
is required to be given expansive meaning to include inquiry
procedure followed by the Authorities of ED, the Adjudicating
Authority, and the Special Court.
Prevention of Money Laundering Act, 2002 – s.2(1), Clause
(na) –Expression “investigation” therein – Held: The expression
“investigation” in Clause (na) of s.2(1) does not limit itself to the
matter of investigation concerning the offence under the Act and is
interchangeable with the function of “inquiry” to be undertaken
by the Authorities under the Act.
Prevention of Money Laundering Act, 2002 – s.2(1), Clause
(u), Explanation – Held: Explanation inserted to Clause (u) of s.2(1)
does not travel beyond the main provision predicating tracking and
reaching upto the property derived or obtained directly or indirectly
as a result of criminal activity relating to a scheduled offence.
Prevention of Money Laundering Act, 2002 – s.3 – Ambit of
– Held: s.3 has a wider reach and captures every process and
activity, direct or indirect, in dealing with the proceeds of crime and
is not limited to the happening of the final act of integration of
tainted property in the formal economy – Explanation inserted to
s.3 by way of amendment of 2019 does not expand the purport of
s.3 but is only clarificatory in nature – The expression “and”
occurring in s.3 has to be construed as “or”, to give full play to the
said provision so as to include “every” process or activity indulged
into by anyone – The interpretation suggested, that only upon
[2022] 6 S.C.R. 382
382
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projecting or claiming the property in question as untainted property
that the offence of s.3 would be complete, is rejected.
Prevention of Money Laundering Act, 2002 – Prosecution on
notional basis or assumption – If permissible – Held: The Authorities
under the Act cannot prosecute any person on notional basis or on
the assumption that a scheduled offence has been committed, unless
it is so registered with the jurisdictional police and/or pending
enquiry/trial including by way of criminal complaint before the
competent forum.
Prevention of Money Laundering Act, 2002 – s.5 – Validity
of –  Held: s.5 is constitutionally valid – It provides for a balancing
arrangement to secure the interests of the person as also ensures
that the proceeds of crime remain available to be dealt with in the
manner provided by the Act.
Prevention of Money Laundering Act, 2002 – s.8(4) –
Challenge to the validity of sub-section (4) of s.8 – Held: Is rejected
subject to s.8 being invoked and operated in accordance with the
meaning assigned to it – Direction u/s.8(4) for taking possession of
the property in question before a formal order of confiscation is
passed merely on the basis of confirmation of provisional attachment
order, should be an exception and not a rule – That issue will have
to be considered on case-to-case basis.
Prevention of Money Laundering Act, 2002 – s.17 – Challenge
to deletion of proviso to sub-section (1) of s.17 – Rejected – Held:
There are stringent safeguards provided in s.17 and Rules framed
thereunder – Moreover, the pre-condition in the proviso to Rule
3(2) of the 2005 Rules cannot be read into s.17 after its amendment.
Prevention of Money Laundering Act, 2002 – s.18 – Challenge
to deletion of proviso to sub-section (1) of s.18 – Rejected – Held:
Safeguards are provided in s.18 – Amended provision does not suffer
from the vice of arbitrariness.
Prevention of Money Laundering Act, 2002 – s.19 – Challenge
to the constitutional validity of s.19 – Rejected – Held: There are
stringent safeguards provided in s.19 – The provision does not suffer
from the vice of arbitrariness.
VIJAY MADANLAL CHOUDHARY & ORS. v. UNION OF
INDIA & ORS.
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SUPREME COURT REPORTS
[2022] 6 S.C.R.
Prevention of Money Laundering Act, 2002 – s.24 – Validity
– Held: s.24 has reasonable nexus with the purposes and objects
sought to be achieved by the Act and cannot be regarded as
manifestly arbitrary or unconstitutional.
Prevention of Money Laundering Act, 2002 – s.44 – Proviso
in Clause (a) of

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