Petition in SC seeks review of its verdict upholding validity of PMLA provisions that give wider power of arrest, seizure to ED

Satya Prakash

New Delhi, August 22

A petition has been filed in the Supreme Court seeking review of its recent verdict upholding the validity of various provisions of the Prevention of Money Laundering Act (PMLA) that gave wider powers of arrest and seizure to the Enforcement Directorate.

The review petition was mentioned by an advocate on Monday before Chief Justice of India (CJI) NV Ramana seeking urgent listing.

“Is this on Justice Khanwilkar’s judgment?” the CJI asked.

As the lawyer answered in the affirmative, the CJI said, “Ok, we will list it.”

The Supreme Court had on July 27 upheld the validity of several stringent provisions of the PMLA which gave wider powers to the ED and made it difficult for the accused to obtain bail.

A three-judge Bench led by Justice AM Khanwilkar (since retired) had said supply of Enforcement Case Information Report (ECIR) under PMLA proceedings was not mandatory as it’s an internal document that can’t be equated with an FIR.

The verdict was widely criticised for ignoring concerns regarding civil liberties.

The Bench — which also included Justice Dinesh Maheshwari and Justice CT Ravikumar – had said, “Supply of a copy of ECIR in every case to the person concerned is not mandatory, it is enough if ED at the time of arrest discloses the grounds of such arrest.”

It said, “In view of special mechanism envisaged by the 2002 Act, ECIR cannot be equated with an FIR under the 1973 (Criminal Procedure) Code. ECIR is an internal document of the ED and the fact that FIR in respect of scheduled offence has not been recorded does not come in the way of the authorities referred to in Section 48 to commence inquiry/investigation for initiating “civil action” of “provisional attachment” of property being proceeds of crime,” it said.

“So long as the person has been informed about grounds of his arrest that is sufficient compliance with the mandate of Article 22(1) of the Constitution (right to be informed of the grounds for such arrest, and right to consult and to be defended by a lawyer of his choice),” it had said.

However, the top court had left the question of the 2019 amendment to the PMLA Act having been passed as Money Bill to be decided by a larger bench of seven judges before which the question was already pending.

The verdict had come on 242 petitions, including those by Anil Deshmukh, Karti Chidambaram and Mehbooba Mufti, challenging the stringent provisions of the PMLA.

The Bench had also upheld the validity of “twin conditions” for bail under amended Section 45 of the PMLA — prosecutor is given opportunity to oppose the bail plea; and that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail.

Money-laundering is one of the heinous crimes, which not only affects the social and economic fabric of the nation, but also tends to promote other heinous offences, such as terrorism, offences related to NDPS Act, etc, it had noted.

Regarding the process envisaged by Section 50 of the PMLA, it said the provision was in the nature of an inquiry against the proceeds of crime and not an “investigation” in the strict sense of the term for initiating prosecution.

It also held that the authorities under the 2002 Act (referred to in Section 48), are not police officers and as such “the statements recorded by the authorities under the 2002 Act are not hit by Article 20(3) (right against self-incrimination) or Article 21 of the Constitution (right to life and personal liberty).”

Giving a liberal interpretation to Section 3 of the Act, it said the provision has a wider reach and captures every process and activity, direct or indirect, in dealing with the proceeds of crime and is not limited to the happening of the final act of integration of tainted property in the formal economy.”

The top court said the explanation inserted to Section 3 by the 2019 amendment did not expand the purport of Section 3 as it was only clarificatory in nature.

The top court declared Section 5 of the 2002 PMLA “constitutionally valid”, saying, “It provides for a balancing arrangement to secure the interests of the person as also ensures that the proceeds of crime remain available to be dealt with in the manner provided by the 2002 Act. The procedural safeguards…are effective measures to protect the interests of the person concerned.”

During the hearing, the Centre had told the Supreme Court that proceeds of crime worth Rs 98,368 crore were identified and attached in 4,850 cases taken up for investigation under the Prevention of Money Laundering Act (PMLA) in the last 17 years.