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October 2022

PMLA – Magna Carta – Part 2

By Dr. Dilip K. Sheth
Chartered Accountant
Reading Time 14 mins
Part – I of the article on PMLA – Magna Carta was published in the September 2022 issue of the BCAJ. In this concluding part, the author has answered some interesting and important questions arising from the Supreme Court decision in the case of Vijay Madanlal Choudhary vs. Union of India [2022] 140 taxmann.com 610 (SC). For a detailed analysis of the case, please refer to the September 2022 issue of the BCAJ.

1.    Whether investigation under PMLA can automatically be extended under other Statutes like the Black Money Act or the Fugitive Economic Offenders Act by the authorities under PMLA?
“Investigation” is a crucial term which has a bearing on the interpretation of all substantive aspects of PMLA. It is defined in section 2(1)(na) of PMLA, as under:

(na) “investigation” includes all the proceedings under this Act conducted by the Director or by an authority authorised by the Central Government under this Act for the collection of evidence.

The term “investigation” has been dealt with by the Supreme Court in the above mentioned decision. The Supreme Court has held that:

•    the term “proceedings” [section 2(1)(na) of PMLA] is contextual and is required to be given expansive meaning to include the inquiry procedure followed by the Authorities of Enforcement Directorate (ED), the Adjudicating Authority, and th
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