Central Idea
- The Enforcement Directorate (ED) is contemplating adding a political party as an accused in a money laundering probe linked to the now-defunct Excise Policy of the Delhi government.
Booking a Political Party for Money Laundering
- Applicable Law: Section 70 of the Prevention of Money Laundering Act (PMLA) addresses offences by companies, and it can be invoked in this case.
- Definition of “Company”: While a political party isn’t a ‘company’ under the Companies Act, the PMLA includes an explanation that broadens the scope to include ‘associations of individuals,’ potentially encompassing political parties.
Precedent for such Cases
- If pursued, this action could set a significant precedent in India’s legal landscape.
- Previously, political parties have been investigated under the Income Tax Act.
- Trusts and NGOs are already within the purview of the PMLA, as per a notification by the Finance Ministry.
Connection between Charges and Political Party
- The central allegation by the ED is that the political party received the proceeds of crime in the excise scam.
- An additional explanation in Section 70 of the PMLA specifies that a “company may be prosecuted, notwithstanding whether the prosecution or conviction of any legal juridical person shall be contingent on the prosecution or conviction of any individual.”
- This implies that even if cases involving party members fail, the party can still be prosecuted for money laundering separately.
