The Delhi High Court has observed that a political party can be made accused under the Prevention of Money Laundering Act, 2002 as Section 70 of PMLA brought a company under its ambit, which included a political party as well.
The order was passed by the single-judge Bench of Justice Swarana Kanta Sharma on the grounds that the definition of ‘political party’ as per Section 2(f) of the Representation of the People Act (RP Act) was an ‘association or body of individuals’ and as per Explanation-1 of Section 70 of PMLA, a ‘company’ also meant an ‘association of individuals’.
While rejecting a plea filed by Delhi Chief Minister Arvind Kejriwal challenging his arrest by the Enforcement Directorate (ED) in connection with the Delhi Excise Policy case and the order passed by the trial court remanding him to ED custody, Justice Sharma also referred to Section 29A (Registration with the Election Commission of associations and bodies as political parties) under the RP Act.
She said after examining the definitions mentioned above, this Court was of the opinion that the definition of a ‘political party’ as per Section 2(f) of the Representation of Peoples Act was that a political party meant an ‘association or body of individuals’. As per Explanation-1 of Section 70 of PMLA, a ‘company’ also meant an ‘association of individuals’, added Justice Sharma.
The single-judge Bench observed that Kejriwal was in charge of and responsible for the conduct of the business of the Aam Aadmi Party (AAP), and prima facie would be liable for affairs of the party so as to attract Section 70(1) of PMLA.
While Section 70 PMLA dealt with offences by a company, Section 70(1) said that every person who was in charge of the company at the time offence committed by the company shall be liable for punishment.
The Counsel appearing for the Enforcement Directorate (ED) had argued that AAP would be deemed to be a company for the purpose of Section 70 of PMLA, and Kejriwal being its National Convenor, would be in charge of and responsible for its business, thus, being liable under Section 70(1) of PMLA.
Appearing for Kejriwal, Senior Advocate Abhishek Manu Singhvi said that this argument was misplaced and liable to be rejected.
The Bench further observed that as per proviso of Section 70(1), the petitioner would have the right to prove, at the appropriate stage, that he did not have any knowledge of the contravention of provisions of PMLA committed by his party or that he had exercised due diligence to prevent the same. This right, however, was not available as in all other criminal cases at the stage of arrest or remand as per the existing law of the country.
The petitioner was represented by Senior Advocates Singhvi, Amit Desai and Vikram Chaudhary, along with Advocates Vivek Jain, Mohd Irshad, Rajat Bhardwaj, Karan Sharma, Rajat Jain, Mohit Siwach, Kaustubh Khanna, Rishikesh Kumar, Shailesh Chauhan, Sadiq Noor, Mehul Prasad, Priyanka Sarda, Sheenu Priya and Princy Sharma.
The national agency was represented by Additional Solicitor General SV Raju, Special Counsel Zoheb Hossain and Advocates Annam Venkatesh, Arkaj Kumar, Vivek Gurnani, Hitarth Raja, Abhipriya Rai, Kartik Sabharwal, Vivek Gaurav, Agrimaa Singh, Kanishk Maurya and Ritumbhara Garg.