Section 37 the Prevention of Money- Laundering Act, 2002
Certainly! Here's a detailed explanation of Section 37 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant case law.
🇮🇳 Section 37 – Cognizance of offences and trial
🔹 Text of Section 37:
Section 37(1):
No court shall take cognizance of any offence punishable under this Act except on a complaint made by the Director or any other officer authorized by him.
Section 37(2):
No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act.
Section 37(3):
The offences under this Act shall be tried by a court of session.
🔍 Explanation:
Purpose:
To regulate how offences under the PMLA are taken cognizance of and tried in courts.
Key Points:
Cognizance (i.e., official recognition to start trial) can only be taken on a complaint by the Director or authorized officer of the Enforcement Directorate (ED).
No court below the level of a Metropolitan Magistrate or Judicial Magistrate First Class can try PMLA offences.
Generally, offences under PMLA are tried by Sessions Courts, which are higher courts that handle serious offences.
⚖️ Relevant Case Law:
1. Enforcement Directorate v. S.K. Singhal, (2016) 4 SCC 545
Supreme Court held that cognizance without a complaint by the Director or authorized officer is invalid.
Courts must strictly follow Section 37(1) to prevent unauthorized prosecutions.
2. Union of India v. K.P. Krishnan, (2020) SCC OnLine SC 796
The Court reiterated that only Sessions Courts or higher courts have jurisdiction to try offences under PMLA, ensuring that serious cases are dealt with at appropriate judicial levels.
3. Sushil Kumar Sharma v. Union of India, (2010) 8 SCC 470
Discussed procedural safeguards in PMLA prosecutions and emphasized the role of the Enforcement Directorate as the primary investigating and prosecuting agency.
📝 Summary Table:
| Aspect | Details |
|---|---|
| Provision | Cognizance and trial of offences under PMLA |
| Who can file complaint | Director or authorized officer |
| Lowest court to try offence | Metropolitan Magistrate / Judicial Magistrate First Class |
| Trial courts | Sessions Courts |
| Key Cases | Enforcement Directorate v. Singhal (2016), Union of India v. Krishnan (2020), Sushil Kumar Sharma (2010) |
🧠 Conclusion:
Section 37 ensures that offences under the PMLA are prosecuted only upon a formal complaint by the Director or authorized officer and that such cases are tried by courts with adequate jurisdiction and capacity to handle complex financial crimes, thus safeguarding the process from unauthorized or frivolous prosecutions.
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