Question
Consider the following statements regarding the
definition of "Proceeds of Crime" under Section 2(1)(u) of the Prevention of Money Laundering Act, 2002: Statement 1: Proceeds of crime includes any property derived from or obtained, directly or indirectly, by any person as a result of criminal activity relatable to scheduled offences. Statement 2: Property acquired by a person through legitimate means becomes proceeds of crime if the person is suspected of committing any crime. Statement 3: Proceeds of crime include property mixed with proceeds from legitimate sources. Statement 4: Proceeds of crime are limited to cash and currency notes only. Which statements are correct?Solution
Section 2(1)(u) of PMLA defines "Proceeds of Crime" as any property derived from or obtained, directly or indirectly, by any person as a result of criminal activity relatable to a scheduled offence. Statement 1 is correct. Statement 3 is correct—commingling of proceeds with legitimate property is covered. Statement 2 is incorrect because suspicion alone is insufficient; there must be a nexus to a scheduled offence. Statement 4 is incorrect because proceeds include not just cash but all forms of property including movable, immovable, tangible, and intangible property. Statements 1 and 3 are correct.
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