Chartered Accountants cannot be held guilty under PMLA merely on the ground of issuance of certificate in favour of accused

Last updated: 09 December 2022

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The Madras High Court has ruled that Chartered Accountants (CAs) cannot be prosecuted under the Prevention of Money Laundering Act (PMLA) simply for issuing certificates. The court clarified that a CA's duty is to examine the nature of documents provided by clients, not their genuineness. Therefore, issuing a certificate, even if later used in money laundering, does not automatically make the CA guilty.

Court :
Madras High Court

Brief :
The Hon'ble Madras High Court ("the High Court") in the case of Murali Krishna Chakrala Vs. The Deputy Director, Directorate of Enforcement (Criminal Revision Case No.1354 of 2022 and Crl. M.P.No. 14792 of 2022)dated November 23, 2022, held that Chartered Accountants ("CA") is required to only examine the nature of the documents and not genuinity of those documents, therefore, mere issuing certificate cannot be a valid ground to prosecute a CA under the Prevention of Money Laundering Act, 2002 ("the PMLA Act").

Citation :
Criminal Revision Case No.1354 of 2022 and Crl. M.P.No. 14792 of 2022

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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