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CS Executive · Economic, Commercial and Intellectual Property Laws · Prevention of Money Laundering

Rohan, a Pune trader, is convicted of money-laundering under the Prevention of Money-Laundering Act, 2002, and the proceeds of crime do not relate to any offence under paragraph 2 of Part A of the Schedule. What is the punishment prescribed under Section 4?

The punishment is rigorous imprisonment for at least three years, extendable to seven years, along with liability to fine. The ten-year maximum applies only to paragraph 2 of Part A scheduled offences, and the earlier five lakh rupee fine cap has been omitted.

  1. ARigorous imprisonment of at least three years, extendable to seven years, and also liable to fineCorrect
  2. BRigorous imprisonment of at least one year, extendable to seven years, or fine only
  3. CRigorous imprisonment of at least three years, extendable to ten years, with fine capped at five lakh rupees
  4. DSimple imprisonment up to three years, or fine, or both

Explanation

Section 4 prescribes rigorous imprisonment of not less than three years extending to seven years, and the offender is also liable to fine. The ten-year ceiling applies only where the proceeds relate to an offence under paragraph 2 of Part A of the Schedule. The five lakh cap on fine was omitted with effect from 15-2-2013.

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