Why in the news? 

A Delhi Court on Thursday extended the Enforcement Directorate’s (ED) custody of Delhi Chief Minister Arvind Kejriwal till April 1 in the money laundering case

Context

Mr Kejriwal was arrested on March 21, hours after his plea for interim protection from arrest was rejected by the Delhi High Court. This is the first instance of a Chief Minister in India being put behind bars while still in office.

ED’s allegations against the Chief Minister

• Influence on Elections: The ED contends that Money  received by AAP leaders from operators of alcohol businesses were used to influence the 2022 Assembly elections in Punjab and Goa.
• Favours to South Group: The excise policy was allegedly drafted with the intention of granting favors to the South Group

 Legal issues  

• Potential Involvement of AAP: If Kejriwal’s vicarious liability (This principle holds a person responsible for the actions of others, based on the concept of agency) is established, AAP could be impleaded as an accused in the case. This could lead to the attachment or confiscation of the party’s assets under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
• Application of Section 70 of the PMLA: This section is often invoked to investigate companies involved in money laundering offenses. It holds individuals responsible if they were in charge or responsible for the company at the time of the offense. However, individuals may not be prosecuted if they can prove lack of knowledge or due diligence to prevent the offense.
• Definition of “Company”: Explanation 1 of Section 70 of the PMLA defines “company” broadly to include any body corporate, firm, or association of individuals. This could potentially encompass a political party under the definition, as per the Representation of the People Act, 1951.

What is (PML) Prevention of Money-Laundering Act, 2002 Act? 

An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto.

 Reliance on approver’s testimony

• Definition of an Approver testimony: An approver is someone who has been charged with a crime but later confesses and agrees to testify for the prosecution.
• Potential Consequences of False Deposition: An approver who provides false testimony can be retried for the offense for which the pardon was granted, according to Section 308 of the CrPC. This provision acts as a deterrent against perjury by the approver.
• Caution in Reliance: Courts exercise caution when relying on the testimony of an approver due to its inherently suspect nature. The testimony of an accomplice is considered tainted, and courts are wary of potential biases or falsehoods.
• Corroboration Requirement: To ensure the reliability of the approver’s testimony, corroboration from independent evidence is typically required.
• Judicial Precedents: The Supreme Court, in cases like Mrinal Das and Ors. v. State of Tripura (2011), has emphasized the importance of corroborative evidence in convicting the accused based on the testimony of an approver.
• Judicial Scrutiny: Courts meticulously scrutinize the testimony of an approver and assess its credibility in light of corroborative evidence and other factors.

Conclusion 

Arvind Kejriwal’s arrest in a money laundering case raises legal complexities, including potential involvement of AAP, application of PMLA, and reliance on approver’s testimony, necessitating cautious judicial scrutiny.

Mains PYQ 

Q Money laundering poses a serious security threat to a country’s economic sovereignty. What is its significance for India and what steps are required to be taken to control this menace? (UPSC IAS/2013) 

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