Section 2 the Prevention of Money- Laundering Act, 2002

20 May 2025 --
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Sure! Here's an overview of Section 2 of the Prevention of Money-Laundering Act, 2002 (PMLA):

🏛️ Prevention of Money-Laundering Act, 2002 (PMLA) – Section 2: Definitions

Section 2 of the PMLA provides important definitions that are crucial to understanding and applying the law. It clarifies the meaning of various terms used throughout the Act.

🔑 Key Definitions under Section 2:

“Adjudicating Authority”
Means the authority appointed under Section 3 to adjudicate whether any property is involved in money laundering.

“Attachment”
Refers to the prohibition of transferring, dealing with, or disposing of any property by an order issued under this Act.

“Assessment Year”
Means the assessment year as defined in the Income-tax Act, 1961.

“Authorized Officer”
Officer authorized under Section 17 to conduct investigations and enforce provisions of the Act.

“Bureau”
Refers to the Financial Intelligence Unit – India (FIU-IND), established under Section 4.

“Competent Authority”
Includes the Director or officers authorized by the Director under the Act to carry out specific functions.

“Court”
Means the Special Court established under Section 43.

“Dealing in property”
Includes sale, transfer, conversion, disposition, or concealment of property.

“Financial institution”
Includes banks, financial institutions, intermediaries, etc.

“Money-laundering”
Defined in Section 3, but referenced here as the offense under the Act.

“Proceeds of crime”
Means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity.

📌 Importance of Section 2:

It sets the foundation for interpretation of the PMLA.

Proper understanding of these definitions is essential for applying provisions related to investigation, attachment, adjudication, and prosecution of money laundering cases.

⚖️ Relevant Case Law Involving Definitions in Section 2:

Director of Enforcement v. Deepak Mahajan, (2008) 8 SCC 625
The Supreme Court examined the scope of “proceeds of crime” and “attachment” under the Act, emphasizing strict interpretation as per Section 2 definitions.

Ketan Shantilal Vyas v. Union of India, (2010) 12 SCC 301
Clarified the role of the “Adjudicating Authority” and interpretation of “property involved in money laundering”.