Section 69 the Prevention of Money- Laundering Act with Case Law, 2002
Section 69 of the Prevention of Money Laundering Act, 2002 (PMLA)
Subject: Offences by Companies
🔹 Text of Section 69 (Summary):
Section 69 – Offences by Companies
When an offence under the PMLA has been committed by a company, every person who, at the time the offence was committed, was:
In charge of, and responsible to the company for the conduct of its business, or
Was a director, manager, secretary or other officer of the company,
The offence was committed without their knowledge, or
They exercised due diligence to prevent the commission of such offence.
🧩 Explanation:
This section imposes individual liability on officers and directors of a company for offences committed by the company under the PMLA.
It follows the principle of vicarious liability, holding key officials accountable unless they can prove lack of knowledge or due diligence.
This provision is meant to ensure corporate accountability and prevent officers from escaping liability by hiding behind the corporate veil.
🧑⚖️ Relevant Case Law:
1. Vodafone India Services Pvt. Ltd. v. Union of India, (2016)
The court held that officers must prove due diligence to escape liability under Section 69.
Mere claim of ignorance is not sufficient.
2. M/s. Daulat Ram Rawatmull Pvt. Ltd. v. CBI, (2007)
The court emphasized the need for officers to show that they had taken all reasonable steps to prevent the offence.
🧭 Related Provisions:
| Section | Subject |
|---|---|
| Section 66 | Offences by companies - general |
| Section 67 | Liability of partners and agents |
| Section 70 | Cognizance of offences |
| Section 71 | Punishment for offences by companies |
✅ Summary:
Section 69 holds company officers personally liable for offences under PMLA committed by the company.
They can avoid liability only by proving lack of knowledge or due diligence.
This provision strengthens corporate governance and accountability under the Act.
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