Prevention of Money Laundering Act, 2002
Landmark PMLA Cases
PMLA law has been made as much in the Supreme Court as in Parliament. This note gathers the leading decisions in six clusters: the validity and scope of the Act; arrest and custody; bail; statements and evidence; procedure and cognizance; and property, companies and the ED. For each, it gives the essential holding. Several of these are among the most important criminal law judgments of the last five years.
The leading PMLA decisions in six clusters
A. Validity and Scope
📖 Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929, decided 27 July 2022 Upheld the core of the Act: ss. 3, 5, 8(4), 17, 18, 19, 24, 44, 45 and 50. Section 3 is wide, and each process is itself laundering; proceeds must relate to a scheduled offence, and acquittal, discharge or quashing in the predicate ends the PMLA case; the ECIR is not an FIR and need not be supplied; ED officers are not police, so s. 50 statements are admissible; the twin conditions are valid and apply to anticipatory bail; s. 24 is valid once foundational facts are proved; s. 436A of the old Code applies. The validity of amendments made through Finance Acts was left to a larger Bench. |
📖 Nikesh Tarachand Shah v. Union of India, (2018) 11 SCC 1, decided 23 November 2017 Struck down the twin conditions in s. 45(1) as then framed, because they applied only to accused also charged with certain Part A offences, an arbitrary classification violating Articles 14 and 21. Parliament re-enacted the conditions for all offences in 2018. |
📖 Pavana Dibbur v. Directorate of Enforcement, 2023 INSC 1029, decided 29 November 2023 Section 120B is a scheduled offence only where the conspiracy is to commit a scheduled offence; a PMLA accused need not be an accused in the predicate case; the s. 3 offence may be committed after the predicate; and even such an accused benefits from the acquittal, discharge or quashing for all accused in the predicate. The ED's review was dismissed. |
📖 Parvathi Kollur v. State by Directorate of Enforcement, Supreme Court, 2022 Applying Vijay Madanlal, the Court declined to revive PMLA proceedings where the accused had been acquitted of the scheduled offence. |
B. Arrest and Custody
📖 Pankaj Bansal v. Union of India, 2023 SCC OnLine SC 1244, decided 3 October 2023 Grounds of arrest under s. 19 must be furnished in writing as a matter of course; evasive replies to summons are not a ground to arrest; the ED must act fairly. |
📖 Ram Kishor Arora v. Directorate of Enforcement, 2023 INSC 1082, decided 15 December 2023 Pankaj Bansal is prospective; oral grounds at arrest followed by written grounds within twenty-four hours satisfy s. 19 and Article 22(1). |
📖 Tarsem Lal v. Directorate of Enforcement, Supreme Court, decided May 2024 After the Special Court takes cognizance, the ED cannot arrest an accused who was not arrested during investigation; it must seek custody from the court, and an accused appearing on summons is not in custody, so the twin conditions do not govern his bond. |
📖 Arvind Kejriwal v. Directorate of Enforcement, Supreme Court, 2024 Courts may examine the 'reasons to believe' under s. 19 on the material, including exculpatory material; questions on the need and necessity of arrest were referred to a larger Bench, and interim bail was granted. |
📖 Mihir Rajesh Shah v. State of Maharashtra, 2025 INSC 1288, decided 6 November 2025 Grounds of arrest must be communicated in writing, in a language the arrestee understands, for offences under all statutes; where not possible at once, at least two hours before production for remand; failure renders arrest and remand illegal. |
C. Bail
📖 P. Chidambaram v. Directorate of Enforcement, (2020) 13 SCC 791, decided 4 December 2019 The gravity of an economic offence is relevant but not by itself a ground to deny bail; each case turns on its facts and the risks of tampering or flight. |
📖 Manish Sisodia v. Directorate of Enforcement, Supreme Court, decided 9 August 2024 Prolonged pre-trial custody with no prospect of early trial violates the right to speedy trial; bail was granted despite s. 45; courts should not 'play safe' in refusing bail. |
📖 Prem Prakash v. Union of India, Supreme Court, decided 28 August 2024 Bail is the rule and jail the exception even under the PMLA; a s. 50 statement recorded while the accused is in custody of the same agency is inadmissible against him. |
📖 V. Senthil Balaji v. Deputy Director, Directorate of Enforcement, Supreme Court, decided 26 September 2024 Where trial will not conclude within a reasonable time, Article 21 permits bail notwithstanding s. 45, relying on K. A. Najeeb (2021). |
📖 K. Kavitha v. Directorate of Enforcement, Supreme Court, 2024 The proviso to s. 45 for women must be given effect; bail was granted. |
D. Statements and Evidence
- Vijay Madanlal Choudhary (2022): ED officers are not police; s. 50 statements are admissible; Article 20(3) is not attracted at the summons stage.
- Prem Prakash (2024): statements in the custody of the same agency are inadmissible against the maker.
- Abhishek Banerjee v. Directorate of Enforcement (2024): the place of examination under s. 50 is not governed by the general code's provisions for witnesses; a person may be summoned to the ED's office outside his State.
E. Procedure and Cognizance
📖 Kushal Kumar Agarwal v. Directorate of Enforcement, 2025 INSC 760, decided 9 May 2025 BNSS ss. 223 to 226 apply to PMLA complaints; for complaints filed after 1 July 2024, the accused must be heard before cognizance. |
📖 Parvinder Singh v. Directorate of Enforcement, 2026 INSC 519, decided May 2026 The pre-cognizance hearing applies where cognizance is taken after 1 July 2024, even on an earlier complaint; the right is substantive and mandatory, and cognizance without it is void ab initio, without proof of prejudice. |
📖 Yash Tuteja v. Union of India, Supreme Court, 2024 Proceedings resting on no scheduled offence cannot stand; the complaint procedure of the general code applies to PMLA complaints so far as consistent. |
📖 Opto Circuit India Ltd. v. Axis Bank, (2021) 6 SCC 707 A freezing direction under s. 17 without the statutory authorisation and recorded reasons is invalid; the procedure must be strictly followed. |
F. Property, Companies and the ED
📖 Deputy Director, Directorate of Enforcement v. Axis Bank, Delhi High Court, 2019 Property acquired before the crime may be attached as equivalent value, but bona fide secured creditors' prior interests must be protected and weighed. |
📖 Manish Kumar v. Union of India, (2021) 5 SCC 1 Upheld IBC s. 32A, which frees the corporate debtor and its assets under an approved resolution plan from liability and attachment for prior offences. |
📖 Standard Chartered Bank v. Directorate of Enforcement, (2005) 4 SCC 530 A company can be prosecuted even for an offence carrying mandatory imprisonment; it is punished with fine. |
📖 Jaya Thakur v. Union of India, Supreme Court, 2023 Held later extensions of the ED Director's tenure invalid, while upholding the legislative framework permitting extensions. |
G. Frequently Asked Questions
What is the most important PMLA judgment?
Vijay Madanlal Choudhary v. Union of India (2022), which upheld the core provisions of the Act and settled its interpretation on the predicate offence, ECIR, arrest, statements, presumptions and bail.
Which cases govern grounds of arrest under the PMLA?
Pankaj Bansal (2023), Ram Kishor Arora (2023), and, across all statutes, Mihir Rajesh Shah (2025).
Which cases relaxed PMLA bail?
Manish Sisodia, Prem Prakash, V. Senthil Balaji and K. Kavitha (all 2024), building on K. A. Najeeb (2021).
Which cases require a hearing before cognizance?
Kushal Kumar Agarwal (2025) and Parvinder Singh (2026), applying Section 223 of the BNSS.