Punishment for money-laundering
Section 4 of the Prevention of Money-Laundering Act, 2002 deals with punishment for money-laundering. Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine : Provided that where the proceeds of crime involved in money-laundering relates to The Act came into force on 01 Jul 2005.
Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine1 ***:
Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted.
Section 4, 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.
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.
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Nikesh Tarachand Shah vs Union of India Ministry of Finance through Secretary Revenue
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: Prescribes punishment of minimum 3 years to maximum 7 years (or 10 years for certain offences) for money laundering
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Assistant Director, Enforcement Directorate v. Pradeep Kumar Satapathy
Court's Decision & Legal Precedent
PMLA is not a purely civil statute: s.3 defines the offence and s.4 provides punishment for money-laundering; summons/investigation under s.50 can feed a criminal complaint, so a Single Judge direction treating PMLA proceedings as civil and barring use of statements in PC Act trials is set aside (with a limited carve-out for pre-existing PC Act cases).
On this section: Empty teaching s.4 (punishment) is expressly cited to reject the “PMLA is only civil” premise.
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.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… Accordingly, I pass the following order: - i) The application is allowed. - ii) It is directed that the applicant shall be released on bail in connection with ECIR bearing No. ECIR/NGSZO/13/21, registered by Directorate of Enforcement, Sub-Zonal Office, Nagpur for the offence punishable under Section 3 and 4 of the Prevention of Money-Laundering Act, 2002, on his furnishing P.R. Bond in the sum of Rupees One Lakh with one or two solvent sureties in the like amount. - iii) The applicant shall not pressurize the prosecution witnesses or tamper with the prosecution evidence. - iv) The applicant shall deposit his …
Made under this section, and citing it
1 instrument states 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 4 instruments name this provision in its title or its text without being made under it.
- The Prevention of Money-laundering (Restoration of Confiscated Property) Amendment Rules, 2019Rule 2019
- Notification dated 27.3.2017 for designation of Special Court under PMLANotification 2017
- Notification dated 05.02.2016 for designation of Special Court under PMLANotification 2016
- Notification appoint the Director, Financial Intelligence UnitNotification 2005
Questions about Section 4
What have the courts held on Section 4 of the Prevention of Money-Laundering Act?
Nikesh Tarachand Shah vs Union of India Ministry of Finance through Secretary Revenue (23 Nov 2017) is the leading judgment on this section among those set out below: Prescribes punishment of minimum 3 years to maximum 7 years (or 10 years for certain offences) for money laundering. Another 1 judgment on this section is set out below, 1 of them from the Supreme Court. They run from 2017 to 2021.
How do I find court cases under Section 4 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 4, section 4 Pmla, section 4 of the Prevention of Money-Laundering Act. People searching for it also type 4 pmla act. 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 Nikesh Tarachand Shah vs Union of India Ministry of Finance through Secretary Revenue (23 Nov 2017).
What should I read with Section 4 of the Prevention of Money-Laundering Act, and has it changed?
4 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there is one: most recently Notification appointing Director of Enforcement (2005).
When did Section 4 of the Prevention of Money-Laundering Act come into force?
Section 4 of the Prevention of Money-Laundering Act, cited as Pmla 4, 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 15 Oct 2026. This page is not a substitute for legal advice.