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Repost from UPSC Prelims 2024 MCQs Quiz
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🔆Political party to be booked for money laundering
📍Why in news?
✅ The Enforcement Directorate (ED) has informed the Delhi high court that it will name the Aam Aadmi Party (AAP) an accused in the ongoing money laundering investigation related to alleged irregularities in the Delhi excise policy scam.
✅ED said that it is planning to invoke Section 70 of the Prevention of Money Laundering Act to probe the role of AAP in this regard. Main allegation of the ED is that AAP was the recipient of the proceeds of crime in the excise scam.
📍Prevention of Money Laundering Act (PMLA), 2002
✅Sec 3 of the Act defines offence of money laundering as –
whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence.
📍Laws under which a political party can be booked for money laundering
✅Section 70 of the PMLA, 2002
🔰It states that if a company commits a contravention of any provision of the Act, every person who was in charge of the company's business at the time of the contravention is also liable.
🔰The proviso to Section 70 states that the person in charge of the company's business can defend themselves by proving that the contravention took place without their knowledge or despite all due diligence.
📍Is political party a company?
🔰The political party is not a ‘company’ incorporated under the Companies Act 2013.
🔰However, the provision of PMLA under Section 70 has crucial explanation that could bring political party under the ambit of the anti-money laundering law.
🔰Explanation 1[1] --For the purposes of this section (i.e., Section 70 of PMLA) says that company means any body corporate and includes a firm or other association of individuals.
🔰The phrase ‘association of individuals’ can include political parties.
🔰A party, according to Section 29A of the Representation of the People Act (RPA), is any association or body of individual citizens of India registered with the EC and calling itself a political party.
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