Corruption Challenges – Lokpal, POCA, etc

Section 120B of the Indian Penal Code (IPC)


From UPSC perspective, the following things are important :

Prelims level: Prevention of Money Laundering Act (PMLA), 2002

Mains level: NA

Why in the news?

  • The Supreme Court has rejected review petitions challenging its ruling on the initiation of proceedings under the Prevention of Money Laundering Act (PMLA).
  • The judgment clarified that Section 120B of the Indian Penal Code cannot be invoked for PMLA proceedings unless the alleged conspiracy pertains to a scheduled offence.

Prevention of Money Laundering Act (PMLA), 2002


  • The PMLA was enacted in 2002 with the aim of preventing money laundering and providing for confiscation of property derived from money laundering.
  • It applies to all financial institutions, banks (including the RBI), mutual funds, insurance companies, and their financial intermediaries.
  • The Act empowers government authorities to confiscate property and/or assets earned from illegal sources and through money laundering.
  • It has been amended three times, in 2005, 2009, and 2012.
  • Under the PMLA, the burden of proof lies with the accused, who must demonstrate that the suspect property/assets have not been obtained through proceeds of crime.


Penalties under PMLA:

  • Freezing or Seizure of property and records, and/or attachment of property obtained through crime proceeds.
  • Rigorous imprisonment for a minimum of 3 years and a maximum of 7 years. In cases where money laundering is linked with the Narcotic Drugs and Psychotropic Substances Act, 1985, the punishment can extend up to 10 years, along with a fine.
  • Fine imposition.


Authorities for investigation under PMLA:

  1. Enforcement Directorate (ED): It is responsible for investigating offenses under the PMLA.
  2. Financial Intelligence Unit – India (FIU-IND): It is the national agency tasked with receiving, processing, analyzing, and disseminating information related to suspect financial transactions.

What is Article 120 of Indian Penal Code (IPC)?

  • Section 120 of the Indian Penal Code (IPC) deals with the concept of “Conspiracy to commit an offense”.
  • It states that when two or more persons agree to do, or cause to be done, an illegal act, or an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy.
  • Section 120A defines “criminal conspiracy” as when two or more persons agree to do, or cause to be done, an illegal act or an act which is not illegal by illegal means.
  • Section 120B prescribes the punishment for criminal conspiracy, with death, imprisonment for life, or rigorous imprisonment for a term of two years or upwards, shall be punished in the same manner as if he had abetted such offense.

Punishment for Criminal Conspiracy

  • Nature of Conspiracy: IPC 120B categorizes conspiracy based on the gravity of the offense and prescribes punishments accordingly.
  • Serious Offenses: Conspiracy to commit serious crimes punishable by death, life imprisonment, or rigorous imprisonment for 2 years or more warrants severe punishment equivalent to the offense committed.
  • Other Offenses: Conspiracy for illegal acts not falling under the serious category incurs imprisonment for up to six months, a fine, or both, as per Section 120B.

Practice MCQ:

Which of the following statements are correct regarding ‘Prevention of Money Laundering Act 2002 (PMLA)’?

1. Enforcement Directorate (ED) is responsible for investigating offences under the PMLA

2. The Act enables government authorities to confiscate property earned through money laundering.

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2


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