As per Section 4 of the Prevention of Money Laundering Act, 2002, whoever commits the offence of money laundering, where the proceeds of crime involved in money laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, shall be punishable with rigorous imprisonment for a term which shall not be less than 3 years but may extend to

Correct option is B

The correct answer is (b) 10 years and shall also be liable for fine.

Explanation

Section 4 of the Prevention of Money Laundering Act (PMLA), 2002, prescribes the punishment for the offence of money laundering. It establishes two different ceilings for the maximum term of imprisonment based on the nature of the "predicate" (original) crime.

• General Rule: For most offences, the punishment is rigorous imprisonment for a term between 3 to 7 years, plus a fine.
• The "Narcotics" Exception: If the proceeds of crime relate to any offence specified under Paragraph 2 of Part A of the Schedule, the maximum limit of 7 years is extended to 10 years.

What is Paragraph 2 of Part A? This specific paragraph refers to offences under the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985. Because drug trafficking is considered a particularly heinous crime with severe socio-economic consequences, the PMLA provides for a harsher penalty for laundering money derived from it.

Information Booster:

The PMLA Schedule is divided into parts to categorize the gravity of the underlying crimes.

Structure of Section 4 Punishments:

1. Minimum Term: 3 years (Rigorous Imprisonment).
2. Standard Maximum: 7 years.
3. Special Maximum (NDPS): 10 years.
4. Fine: The 2013 Amendment removed the upper limit of ₹5 lakh for the fine. Now, the fine can be any amount as determined by the court.