High Court: Parties can be prosecuted for money laundering

Satya Prakash

New Delhi, April 11

The Delhi High Court’s verdict upholding the legality of Delhi Chief Minister Arvind Kejriwal’s arrest in a money-laundering case linked to the excise policy scam has wider ramifications for political parties as it ruled that a political party can be prosecuted under the Prevention of Money Laundering Act (PMLA).

What law says

Definition of ‘political party’ under the Representation of People Act and that of ‘company’ under the PMLA are identical — Justice Swarana Kanta Sharma

While dismissing Kejriwal’s petition challenging his arrest by the Enforcement Directorate, Justice Swarana Kanta Sharma held that the definition of ‘political party’ and ‘company’ were identical under relevant Acts.

After examining the two definitions, Justice Sharma said, “This court is of the opinion that the definition of political party as per Section 2(f) of the Representation of People Act is that a political party means an association or body of individuals. As per explanation-1 of Section 70 of the PMLA, a company also means an association of individuals.”

It upheld Kejriwal’s arrest as he was the national convener of AAP, which has been accused of using proceeds of the crime in the 2022 Goa Assembly polls. “Thus at this stage, the material placed on record prima-facie makes it clear that Kejriwal would be liable for affairs of the party so as to attract Section 70(1) of the PMLA,” the high court said in its April 9 judgment.