The Court was hearing a plea by one Rajat Mohan, a CA who approached the Court challenging the notification dated May 3, 2023 which expanded the definition of the word ‘person’ used in Section 2(1)(sa)(vi) of the PMLA as well as the definition of the word ‘activity’.
The plea stated that the effect of the government’s decision would be that it will virtually prompt CAs and other such professionals to police their own clients with whom they interact in a fiduciary capacity.
Mohan further argued that by bringing CAs and other professionals within the definition of reporting entities, onerous obligations have been put on them.
Non-compliance with these provisions will lead to criminal prosecution, he further highlighted.
“The aforementioned sections give unbridled and unlimited, arbitrary, and whimsical power to the authority under the PMLA to pass any directions against “reporting entities.” The operation of the notification read with the aforementioned provisions of PMLA threaten the petitioner’s fundamental rights guaranteed under Article 14, 19(1)(g), 20 (3) and 21 of the Constitution of India along with the Constitutional right under Article 300A of the Constitution of India, and other civil and statutory rights, including the right of privacy, and the protection accorded to professional, privileged and confidential communications,” the plea contended.
Source: Barandbench
