Saturday, 05 Oct, 2024
By: Damini Mehta
Source: @dir_ed/X
The data indicates a sharp increase in the number of cases over the years, particularly from 2020 onwards. In 2014, 195 cases were registered, but by 2021, this number had skyrocketed to 1,166, reflecting a sixfold increase.
On 21st March 2024, Chief Minister of Delhi and Aam Aadmi Party Supremo Arvind Kejriwal was arrested in the Delhi Excise Policy issue under the Prevention of Money Laundering Act, 2002 (PMLA). It was the first instance of a sitting Chief Minister in India being put behind bars. According to the Directorate of Enforcement (ED) data shared by the Ministry of Home Affairs in the Lok Sabha on 6th August 2024, Delhi saw the highest number of arrests under PMLA since 2016 with 36 arrests in 2024 alone. While Delhi leads the list of states with arrests under PMLA at 90 it is followed distantly by Maharashtra at 43 arrests, West Bengal at 42 and Rajasthan at 24.
PMLA was introduced in India with the primary objective of combating money laundering and curbing the use of illicit funds in the financial system. Over the past decade, from 2014 to 2024, the enforcement of PMLA has seen a significant rise, reflecting the increasing focus of regulatory agencies on tackling financial crimes. However, the data on cases registered, acquitted, and convicted under the PMLA presents a complex picture that raises important questions about the efficacy and implementation of the law.
The Rising Tide of PMLA Cases
Between 2014 and 2024, a total of 5,297 cases were registered under the PMLA. The data indicates a sharp increase in the number of cases over the years, particularly from 2020 onwards. In 2014, 195 cases were registered, but by 2021, this number had skyrocketed to 1,166, reflecting a sixfold increase. The surge in 2020, with 708 cases registered, and the peak in 2021, can be attributed to heightened scrutiny by regulatory bodies, possibly in response to high-profile cases and a growing awareness of financial irregularities.
Moreover, the jump in cases registered under PMLA in 2020 is a year after the central government introduced amendments to the Act. The 2019 amendment made the mere possession of illicit money arising from crime also punishable. The amendment also made money laundering a ‘continuing offence’ allowing the government to prosecute crimes that were committed even before the Act was passed.
The jump in cases may also be a result of the government and enforcement agency’s proactiveness in identifying and investigating instances of money laundering. However, the dramatic rise in cases also raises concerns about whether the law is being applied too broadly or whether the increase in cases is proportional to an actual rise in money laundering activities.
Acquittals and Convictions: A Disparity
While the number of cases registered under PMLA has surged, the data on acquittals and convictions reveals a significant disparity. Out of the 5,297 cases registered from 2014 to 2024, only 40 cases resulted in convictions, and just six cases led to acquittals. This stark contrast between the number of cases registered and the number of successful prosecutions raises critical questions about the effectiveness of the legal process under the PMLA.
The conviction rate, calculated as the percentage of cases resulting in convictions out of the total cases registered, stands at a mere 0.75%. This low conviction rate could indicate several potential issues: challenges in gathering sufficient evidence, the complexity of prosecuting money laundering cases, or perhaps procedural delays that hinder timely and effective legal outcomes.
Large disparity between the cases registered and those convicted raises questions on the efficacy of the law and its operations given it has been in force since 2002. This delay in achieving convictions may suggest initial teething problems with the law's implementation or a lack of experience among enforcement agencies in handling such complex financial cases.
Recent Trends: Improvement or Anomaly?
Interestingly, the years 2023 and 2024 show a relatively higher number of convictions, with 9 convictions each year. This improvement could signal a maturing of the legal process, where enforcement agencies and the judiciary are better equipped to handle PMLA cases. Alternatively, it could reflect the resolution of older, more clear-cut cases that were easier to prosecute.
However, the number of acquittals also increased in these years, with 1 acquittal in 2023 and 3 in 2024, suggesting that some cases may have been weakly substantiated or that defendants were able to mount more robust defenses.
Conclusion: A Law in Need of Evaluation
The data on PMLA enforcement from 2014 to 2024 presents a mixed picture. While there is a clear increase in the number of cases being registered, the low conviction rate points to potential inefficiencies in the legal process. This disparity calls for a thorough evaluation of how PMLA cases are being handled, from investigation to prosecution, to ensure that the law serves its intended purpose effectively. The recent uptick in convictions is a positive sign, but without broader improvements in the legal framework, the effectiveness of the PMLA in curbing money laundering remains in question.
