In a landmark decision that clarifies the limits of professional liability under the Prevention of Money Laundering Act (PMLA), 2002, the Supreme Court has upheld the discharge of Chartered Accountant (CA) K. Murali Krishna from prosecution, ruling that professionals performing statutory duties in good faith cannot be held criminally liable for their clients’ misconduct.
A Bench of Justice Surya Kant and Justice Joymalya Bagchi, in an order dated November 10, 2025, dismissed a miscellaneous application filed by the Enforcement Directorate (ED) in K. Murali Krishna vs The Deputy Director, Directorate of Enforcement. The Court found “no valid ground” to interfere with the earlier rulings of the Madras High Court that had discharged the CA from money laundering charges.
The case dates back to allegations that forged documents were used to facilitate certain foreign remittances. The ED had accused Murali Krishna of issuing five Form 15CB certificates—documents required under the Income-tax Act, 1961, that certify the nature and purpose of foreign remittances—based on papers later found to be falsified by his client. The agency argued that this act aided in the movement of proceeds of crime and constituted an offence under the PMLA.
However, the Madras High Court, in its detailed order dated November 23, 2022, had ruled that a Chartered Accountant’s professional duty in issuing Form 15CB is limited to verifying tax compliance and does not extend to examining or authenticating client documents. The Court likened the role of a CA to that of a panel advocate giving a legal opinion on title documents, holding that such professionals cannot be criminally prosecuted if documents submitted by clients later turn out to be forged.
“The duty of a Chartered Accountant in issuing Form 15CB is limited to verifying the taxability of a remittance and ensuring compliance with the Income Tax Act. He is not required to investigate the genuineness of the underlying documents,” the High Court had observed. It also noted that the CA had cooperated with the ED throughout the investigation and had even assisted the agency in identifying the main accused, concluding that his prosecution was “unsustainable in law.”
By upholding the High Court’s ruling, the Supreme Court has now brought finality to the three-year-long litigation, effectively reaffirming the limited scope of criminal liability for professionals who act in good faith within the boundaries of statutory obligations.Experts say the decision has far-reaching implications for the accounting and consulting profession, which has increasingly faced scrutiny under the PMLA in recent years.
The ruling provides clarity that statutory certifications, such as Form 15CB, do not by themselves constitute active participation or abetment in money laundering unless there is evidence of intent or direct involvement.
Sandeep Sehgal, Partner–Tax, AKM Global, a tax and consulting firm, said the judgment is an important reaffirmation of professional safeguards in India’s compliance ecosystem.
“The Hon’ble Madras High Court had delivered a significant judgment in 2022 on the professional liability of Chartered Accountants (CAs) in cross-border transactions, clarifying that issuing Form 15CB under the Income-tax Act, 1961, does not by itself constitute abetment of money laundering under the Prevention of Money Laundering Act (PMLA),” Sehgal said. “
The judgment significantly clarifies that professional actions carried out by CAs in compliance with statutory obligations do not automatically render them vulnerable to prosecution under PMLA, provided there is no evidence of active abetment or direct involvement in money laundering activities.”
He further noted that the Supreme Court’s order dated November 10, 2025, affirming the High Court’s stance, reinforces judicial confidence in protecting professional independence.“It offers CAs confidence to perform their certification duties without undue apprehension about judicial overreach or prosecution risk from investigative agencies,” Sehgal added.
“Importantly, it strikes a balance between enforcing anti-money-laundering regulations and protecting the professional independence and integrity of those performing statutory certifications.”
Legal commentators said the decision also sets a precedent that distinguishes between professional negligence and criminal intent, emphasising that the PMLA must not be used to criminalise routine compliance functions. With the financial sector increasingly dependent on professionals for certifications and reporting obligations, the judgment is expected to help restore confidence in India’s compliance and advisory ecosystem.
By refusing to reopen the case, the Supreme Court has underscored the need for measured enforcement under PMLA, cautioning against the extension of criminal liability to professionals acting in good faith. The ruling will likely serve as a guiding precedent in ongoing and future investigations where professionals have been named merely for executing client instructions or issuing statutory certifications based on client-provided documentation.With this decision, the judiciary has reaffirmed the fine balance between regulatory vigilance and professional autonomy, ensuring that compliance professionals are not deterred from performing their statutory duties due to fear of prosecution.'
Please click here to view the full story on CNBCTV18.