Central Idea

The Enforcement Directorate (ED) is contemplating adding a political party as an accused in a money laundering probe linked to the now-defunct Excise Policy of the Delhi government.

Booking a Political Party for Money Laundering

Applicable Law: Section 70 of the Prevention of Money Laundering Act (PMLA) addresses offences by companies, and it can be invoked in this case.
Definition of “Company”: While a political party isn’t a ‘company’ under the Companies Act, the PMLA includes an explanation that broadens the scope to include ‘associations of individuals,’ potentially encompassing political parties.

If pursued, this action could set a significant precedent in India’s legal landscape.
Previously, political parties have been investigated under the Income Tax Act.
Trusts and NGOs are already within the purview of the PMLA, as per a notification by the Finance Ministry.

The central allegation by the ED is that the political party received the proceeds of crime in the excise scam.
An additional explanation in Section 70 of the PMLA specifies that a “company may be prosecuted, notwithstanding whether the prosecution or conviction of any legal juridical person shall be contingent on the prosecution or conviction of any individual.”
This implies that even if cases involving party members fail, the party can still be prosecuted for money laundering separately.