How does the Prevention of Money Laundering Act (PMLA) balance the need for financial accountability with the protection of individual rights?

The Prevention of Money Laundering Act (PMLA), 2002, was enacted to combat the menace of money laundering and ensure financial accountability in India. However, the law also faces scrutiny regarding its impact on individual rights, especially in high-profile cases. The PMLA attempts to strike a balance between curbing financial crimes and safeguarding personal freedoms through several mechanisms.

• Defined Procedures and Safeguards:
  • The Act prescribes a detailed procedure for investigation, attachment, and confiscation of properties suspected to be involved in money laundering.
  • Attachments are provisional and require confirmation by the Adjudicating Authority, ensuring a check against arbitrary action.
• Judicial Oversight:
  • Orders of attachment and confiscation can be appealed before the Appellate Tribunal and further to High Courts, providing multiple layers of judicial scrutiny.
  • This allows affected individuals to challenge actions taken under the Act, ensuring transparency and fairness.
• Protection Against Self-Incrimination:
  • The Act upholds the right against self-incrimination during investigations, as per Article 20(3) of the Constitution.
• Disclosure and Due Process:
  • Authorities are required to record reasons for attachment and provide opportunities for the affected person to present their case.
  • The principle of natural justice is followed during adjudication of cases.
• Stringent Provisions vs. Individual Rights:
  • While the Act allows for arrest and attachment without prior conviction, it also mandates that such actions be based on material evidence and subject to review by higher authorities.
  • The Supreme Court has, at times, intervened to ensure that the stringent provisions do not override fundamental rights.