Supreme Court upholds powers of arrest, raid under PMLA

Prevention of Money Laundering Act (PMLA): The Supreme Court has upheld the core amendments made to the Prevention of Money Laundering Act (PMLA).

Key Points:

• This act gives the government and the Enforcement Directorate (ED) virtually unbridled powers of summons, arrest, and raids, and makes bail nearly impossible while shifting the burden of proof of innocence on to the accused rather than the prosecution.

• The apex court called the PMLA a law against the “scourge of money laundering” and not a hatchet wielded against rival politicians and dissenters.

• The verdict came on an extensive challenge raised against the amendments introduced to the 2002 Act by way of Finance Acts.

• The court noted “Money laundering is an offence against the sovereignty and integrity of the country, It is no less a heinous offence than the offence of terrorism”.

• The three-judge Bench said the method of introduction of the amendments through Money Bills would be separately examined by a larger Bench of the apex court.

• Over 240 petitions were filed against the amendments which the challengers claimed to violate personal liberty, procedures of law and the constitutional mandate.

About PMLA, 2002:

• Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India enacted by the NDA government to prevent money-laundering and to provide for confiscation of property derived from money-laundering.

• The Act and Rules notified there under impose obligation on banking companies, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information in prescribed form to Financial Intelligence Unit - India (FIU-IND).

• The act was amended in the year 2005, 2009 and 2012.


The PMLA seeks to combat money laundering in India and has three main objectives:

• To prevent and control money laundering.

• To confiscate and seize the property obtained from the laundered money; and

• To deal with any other issue connected with money laundering in India.

Who controls PMLA?

• Under Section 19 of PMLA, the Director, Deputy Director, Assistant Director or any other officer authorized in this behalf by the Central Government by general or special order, has the power to arrest a person.