The Kerala High Court has provided further clarity on the applicability of the Prevention of Money Laundering Act, 2002 (PMLA), particularly concerning actions and property acquisitions that occurred prior to the Act’s enforcement.
Attachment of Properties Acquired Before the Commission of Crime
In a recent judgment, the Kerala High Court addressed whether properties acquired before the commission of a crime could be attached under the PMLA. The court concluded that the Act does not intend to attach or confiscate all properties of a person connected with a crime, especially those acquired before the crime’s commission. Justice Bechu Kurian Thomas emphasized that extending the implications of a crime to actions taken before the crime itself would be arbitrary and against the principles enshrined in Article 20 of the Constitution, which protects against retrospective penal consequences.
Case of K.M. Shaji v. Union of India
In the case of K.M. Shaji v. Union of India, the petitioner challenged the proceedings initiated under the PMLA, arguing that the actions in question occurred before the Act’s enactment and thus should not attract its penal provisions. The Kerala High Court, referencing Article 20(1) of the Constitution, which prohibits retrospective punishment, examined whether the PMLA’s application in this context violated constitutional protections.
Divergent Views on Retrospectivity of PMLA
It’s noteworthy that different High Courts have expressed varying opinions on the retrospective application of the PMLA. For instance, the Karnataka High Court has characterized money laundering as a “continuing offense,” suggesting that the Act can apply to actions initiated before its enactment if the laundering activities continued thereafter. Conversely, other courts have emphasized the importance of not imposing penal consequences retroactively, aligning with constitutional safeguards.
These judgments underscore the judiciary’s ongoing efforts to balance the objectives of the PMLA with constitutional protections against retrospective penal legislation. They highlight the necessity for a nuanced approach when interpreting and applying laws to ensure that individuals are not unfairly penalized for actions that were not offenses at the time they were committed.
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