Can’t Allow Money Laundering Charge Against Innocent Customers, Legal News, ET LegalWorld – Legal Firms

A person who receives money either as advance for a land transaction or loan from a money launderer, without knowing that it is tainted money, cannot be hauled up under the Prevention of Money Laundering Act (PMLA), the Madras high court has said.

“If the provisions of PMLA is so interpreted, no seller of a property, be it moveable or immovable, can be saved from a prosecution under the PMLA, if the buyer turns out to be an offender of a scheduled offence,” a division bench of Justice P N Prakash and Justice G Chandrasekharan said.

The court was passing the order while quashing an FIR registered by the ED against land owner A K Sudevan and borrower R Mahesh.

Both had received money from one Kamalakannan, who was faced the charges of misappropriating money running into crores of rupees while working as an accountant at Dr V Seshaiah Diabetes Care and Research Institute, Chennai. On a complaint from the hospital, a case was registered by CCB.

Since the offences in the FIR were also offences enumerated in Schedule-A of the PMLA, the enforcement directorate (ED) registered a case and took up the investigation. However, Sudevan and Mahesh were also added as accused in the case.

Opposing the quashing of the case, the law enforcement agency contended that the petitioners were in possession of the money given by Kamalakannan which was proceeds of the crime.