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
- Relevant Law: In this instance, Section 70 of the Prevention of Money Laundering Act (PMLA), which handles corporate offenses, may be applied.
- What “Company” means: Political parties are not considered “companies” under the Companies Act; nevertheless, the PMLA has an explanation that expands the definition to include “associations of individuals,” which may include political parties.
Precedents for such Cases
- This action might create a big legal precedent in India if it is pursued.
- Political parties have been the subject of Income Tax Act investigations in the past.
- According to a Finance Ministry announcement, trusts and non-governmental organizations are already covered by the PMLA.
Connection between Charges and Political Party
- The primary accusation made by the ED is that the political party was given the money obtained through the excise scam.
- Section 70 of the PMLA provides further clarification by stating that a firm can be punished regardless of whether the prosecution or conviction of any individual will depend on the prosecution or conviction of another legal juridical person.
- This suggests that the party may still face separate prosecution for money laundering even in cases where cases involving party members are unsuccessful.
