Absence of due diligence not money laundering: Bombay High Court discharges CA of Chhagan Bhujbal

In a significant ruling, the Bombay High Court has discharged a Chartered Accountant who was an accused in the money laundering case involving former Maharashtra minister Chhagan Bhujbal. The court made a crucial distinction between a lack of due diligence and the act of money laundering itself. It held that while the CA may have failed to exercise sufficient diligence in his professional capacity, this lapse alone does not constitute an offense under the Prevention of Money Laundering Act (PMLA). The court observed that for a PMLA offense, the prosecution must prove that the accused was knowingly involved in a process connected with the "proceeds of crime." The High Court found no evidence of such knowledge or active involvement on the part of the CA. This judgment is a major relief for professionals, as it clarifies that mere negligence, without criminal intent, does not amount to money laundering.