Offence of money-laundering

In force From 01 Jul 2005 Act 15 of 2003 As on 16 Oct 2026

Act 15 of 2003 Ministry Finance Enacted 17 Jan 2003 In force 01 Jul 2005 Cited by 7 provisions Instruments 38

Section 3 of the Prevention of Money-Laundering Act, 2002 deals with offence of money-laundering. Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the [proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property sh The Act came into force on 01 Jul 2005.

Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the ¹[proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering.
²[Explanation.--For the removal of doubts, it is hereby clarified that,--
(i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:--
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property,
in any manner whatsoever;
(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.]
Section 3, The Prevention of Money-Laundering Act, 2002 (Act 15 of 2003).

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

Referred to by 7

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

Vijay Madanlal Choudhary v. Union of India

Supreme Court of India 27 Jul 2022 Binding (Supreme Court) Reportable 2022 SCC OnLine SC 929

Court's Decision & Legal Precedent

Three-judge Bench upheld the PMLA scheme: s.3 offence (including the explanation treating possession/use as money-laundering), s.5 attachment, s.19 arrest, s.24 reverse burden, substituted s.45 bail conditions, and s.50 inquiry powers of the ED, as not violating Articles 14/20/21 when read with the 2019 amendments. Teaching counterpart to Nikesh (which had struck down old s.45). SLP(Crl) 5487/2017 batch; 470 orders — use Judgement order-410.pdf 27 July 2022, not order-411.pdf ROP.

On this section: Offence of money-laundering (including the 2019 explanation on possession/use) upheld.

Read the full order on eCourts India
Nikesh Tarachand Shah vs Union of India Ministry of Finance through Secretary Revenue

Supreme Court of India 23 Nov 2017 Binding (Supreme Court) Reportable

Court's Decision & Legal Precedent

Section 45(1) of the Prevention of Money Laundering Act, 2002, insofar as it imposes two further conditions for release on bail (that Public Prosecutor be given opportunity to oppose and that Court be satisfied of reasonable grounds for believing accused not guilty and not likely to commit offence while on bail), is unconstitutional as it violates Articles 14 and 21 of the Constitution of India because: (1) the classification based on sentencing of predicate offences has no rational nexus to the object of the PMLA Act which is to attach proceeds of crime and bring money laundering offenders to book; (2) the twin conditions relate to guilt of predicate offence, not money laundering offence, creating a disconnect; (3) the provision produces manifestly arbitrary results depending on whether predicate offence is in Part A or Part B of Schedule or whether person is charged with money laundering alone; (4) the provision inverts the presumption of innocence which is fundamental to criminal law; (5) the procedure is not fair, just and reasonable as required by Article 21; and (6) the provision lacks a compelling state interest justifying such drastic inroads into personal liberty.

On this section: Establishes the wide scope of persons liable for money laundering including those directly or indirectly involved

Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.

Made under this section, and citing it

11 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.

Another 27 instruments name this provision in its title or its text without being made under it.

All subordinate legislation

Questions about Section 3

What have the courts held on Section 3 of the Prevention of Money-Laundering Act?

Vijay Madanlal Choudhary v. Union of India (27 Jul 2022) is the leading judgment on this section among those set out below: Offence of money-laundering (including the 2019 explanation on possession/use) upheld. Another 1 judgment on this section is set out below, all of them from the Supreme Court. They run from 2017 to 2022.

How do I find court cases under Section 3 of the Prevention of Money-Laundering Act?

In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Pmla 3, section 3 Pmla, section 3 of the Prevention of Money-Laundering Act. People searching for it also type pmla 3 stages and pmla 3 4. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Vijay Madanlal Choudhary v. Union of India (27 Jul 2022).

What should I read with Section 3 of the Prevention of Money-Laundering Act, and has it changed?

7 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 11: most recently Notification dated 28.12.2020 related to DNFBP - notifying Real Estate Agent (2020), then Notification dated 28.12.2020 to notify the dealers in precious metals and precious stones (2020), and 9 more.

When did Section 3 of the Prevention of Money-Laundering Act come into force?

Section 3 of the Prevention of Money-Laundering Act, commonly called pmla or money laundering, and cited as Pmla 3, came into force on 01 Jul 2005, having been enacted on 17 Jan 2003. It is in force as at the date shown on this page.

Other sections of this Act

2. Definitions1773 words
8. Adjudication975 words
6. Adjudicating Authorities, composition, powers, etc781 words
73. Power to make rules704 words
17. Search and seizure570 words
5. Attachment of property involved in money-laundering570 words

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 16 Oct 2026. This page is not a substitute for legal advice.