ED refers to AAP as PMLA accused, party could face action as well

Additional Solicitor General SV Raju, who appeared for the ED, told a Delhi Court during Kejriwal’s remand hearing that the Chief Minister has been arrested because “of both individual and vicarious liability.”

For the first time in court, in the remand application, the ED explicitly alleged that the AAP “has committed the offence of money laundering through Arvind Kejriwal…”

Sources told The Indian Express that the argument invoking vicarious liability stems from Kejriwal’s alleged role — by virtue of being CM — in the formulation of the liquor excise policy which is being looked at as the source of generation of “tainted funds”.

Separately, Kejriwal’s role as convenor of AAP could be cited to explain vicarious liability for alleged “use” of “laundered money” in the Goa elections.

Consequently, it is learnt, the ED could look at adding AAP itself as an accused. This has crucial implications since a “company” under investigation by the ED could have its assets attached or confiscated.

Section 70 of the stringent Prevention of Money Laundering Act deals with offences by companies.

The provision states: “Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of and was responsible to the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.”

While a political party is not a “company” incorporated under the Companies Act, 2013, the provision has a crucial explanation that could bring a political party under the ambit of the anti-money laundering law.

Under this, a “company” means any body corporate and includes a firm or other association of individuals.

The phrase “association of individuals” can include a political party. A party, according to Section 29A of the Representation of the People Act, is any association or body of individual citizens of India calling itself a political party.