Introduction

To curb the menace of money laundering the parliament has enacted the Prevention Of Money Laundering Act, 2002 (hereinafter referred to as ‘the Act’ or ‘PMLA’) which came into force on 01.07.2005. In layman’s terms the offence of money laundering simply means the conversion of property earned or acquired by indulging in any criminal activity (related to a scheduled offence) into untainted property or legitimate money.

Under the Act property means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in property or assets.

As per Section 2 (p)1 of the Act “money-laundering” has the same meaning assigned to it under Section 3. Section 3 of the Act inter alia provides that whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of the offence of money-laundering.

As per Section 2 (u) “proceeds of crime” inter alia means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. Thus, the offence of money laundering involves the process by which black money or any property acquired by any criminal activity relating to a scheduled offence is converted into white money or is portrayed as untainted property.