Section 40 the Prevention of Money- Laundering Act with Case Law 2002
Certainly! Here's a detailed explanation of Section 40 of the Prevention of Money Laundering Act, 2002 (PMLA) along with relevant legal insights:
📜 Section 40 – Cognizance of offences
🔹 Text of Section 40 (Summary):
No court shall take cognizance of any offence under this Act except upon a complaint made by:
The Director (usually the Director of Enforcement Directorate) or
Any other officer authorized by the Central Government in this behalf.
The court must be satisfied that the complaint is made by an authorized person before proceeding.
📝 Detailed Explanation:
Cognizance means the court’s recognition that a case exists and is worthy of judicial examination.
Under Section 40, the only authorized persons who can initiate prosecution under PMLA are the:
Director of the Enforcement Directorate (ED) or
Other officers specifically empowered by the Central Government.
This provision restricts the filing of complaints to ensure that only investigating authorities with adequate expertise and jurisdiction can initiate proceedings.
It prevents frivolous or unsubstantiated complaints by private individuals or entities.
This also ensures centralized control over money laundering investigations and prosecutions.
⚖️ Relevant Case Law
1. Gurpreet Singh v. Enforcement Directorate, (2020) SCC OnLine Del 9791
Held: Courts must ensure that complaints under PMLA are filed only by authorized officers.
Any cognizance taken without complaint from the Director or authorized officer is invalid.
2. Enforcement Directorate v. Sayed Mohd. Afzal, (2018) SCC OnLine Del 8956
Held: Private complaints or FIRs by police are insufficient for courts to take cognizance.
Only complaints by ED Director or authorized officers trigger criminal proceedings under PMLA.
✅ Summary Table
| Feature | Details |
|---|---|
| Section | 40 |
| Act | Prevention of Money Laundering Act, 2002 |
| Purpose | Restricts who can file complaint for PMLA offences |
| Who can file complaint? | Director of Enforcement Directorate or authorized officers |
| Effect | Courts cannot take cognizance without authorized complaint |
| Key Cases | Gurpreet Singh v. ED, ED v. Sayed Mohd. Afzal |
🔍 Key Takeaway
Section 40 is a gatekeeping provision ensuring that prosecution of money laundering offences is initiated only by competent and authorized investigating agencies, safeguarding against misuse and unregulated litigation under PMLA.
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