Supreme Court On ED Powers, PMLA Provisions: Mukul Rohatgi, Kapil Sibal, Abhishek Manu Singhvi, Maneka Guruswamy… More than 240 petitioners against ED had brought up all of these eminent lawyers on their behalf. But, neither of their arguments went on in the Supreme Court.

  • Supreme Court’s seal on the provisions of the Prevention of Money Laundering Act (PMLA)
  • The top court said, the right of arrest, confiscation of property and attachment is right
  • Enforcement Directorate can arrest only by giving reason, SC’s decision
  • More than 240 petitioners had challenged the provisions of PMLA

The Supreme Court, while stamping the provisions of PMLA, rejected the arguments of big lawyers. Eminent lawyers like Kapil Sibal, Abhishek Manu Singhvi, Mukul Rohatgi had descended to oppose the powers. There was an army of eminent lawyers representing more than 240 petitioners. All these arguments went in vain before the Supreme Court. SC upholded ED’s rights under PMLA to deal with arrest, attachment and confiscation. The court clearly said that nothing in the provisions of section 19 of PMLA ‘does not amount to arbitrariness’. The court said that money laundering has a direct bearing on the sovereignty of countries. The court said that it becomes necessary for the state to enact such laws in order to prevent damage to the ‘economic structure’ of the country. The court said that it is the duty of the state to provide social, economic and political justice. The talk of ‘social, economic and political justice’ has been said in the preamble of the Indian Constitution.

Which lawyers had come out against PMLA?

The Supreme Court delivered this verdict on 241 petitions challenging the validity of the provisions of PMLA. Eminent lawyers appeared before the bench of Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar. Senior advocates like Kapil Sibal, Siddharth Luthra, Abhishek Manu Singhvi, Mukul Rohatgi, Amit Desai, Maneka Guruswami, S Niranjan Reddy, Aabad Panda, Siddharth Agarwal, Mahesh Jethmalani, Vikram Choudhary argued on behalf of the petitioners. Apart from this, advocates like Abhimanyu Bhandari, N Hariharan and Akshay Nagarajan also appeared for some of the petitioners. At the same time, Solicitor General Tushar Mehta, Additional Solicitor General SV Raju and Panel Counsel Kanu Agarwal appeared on behalf of the Government of India.

Money laundering cannot be called a crime less heinous than terrorism.

– Supreme Court

Important observations of the Supreme Court in the 545-page decision –

  1. An ECIR cannot be linked to an FIR under CrPC in view of the special mechanism envisaged by the Prevention of Money Laundering Act, 2002.
  2. Section-45 of PMLA deals with cognizable and non-bailable offenses and is just and not arbitrary.
  3. The challenge to the constitutional validity of Section 19 of the 2002 Act is also dismissed. Stringent safeguards have been given in Section 19. Nothing in the provision comes under the ambit of arbitrariness.
  4. Under Section 5 of the Act, attachment of property of people involved in money laundering is constitutionally valid.
  5. Section 24 of the PMLA has due regard to the objectives to be achieved by the Act and cannot be held to be unconstitutional.
  6. Section 162 of CrPC states that every person is bound to answer truthfully all questions asked by a police officer.
  7. The statements recorded by officers under the 2002 Act are not affected by Article 20(3) or Article 21 of the Constitution.
  8. According to Article 20(3) a person accused of any offense shall not be compelled to be a witness against himself, Article 21 deals with the protection of life and personal liberty.
  9. The executive needs to take corrective measures in respect of vacancies in the Appellate Tribunal under PMLA, 2002.
  10. Section 63 of the Act, which deals with punishment in respect of false information or failure to give information, is not in any way arbitrary.
  11. There appears to be no ground in challenging Section 44, which deals with offenses triable by special courts, which is arbitrary or unconstitutional.

Money laundering is one of the heinous crimes, which not only affects the social and economic fabric of the nation but also promotes other serious crimes like terrorism, offenses related to NDPS Act.

 – Supreme Court

Importance of PMLA

There are many such provisions in the Prevention of Money Laundering Act (PMLA) which makes it a strict act. For example, the right of search has been given even without registering an FIR. As soon as the ECIR (Enforcement Case Information Report) is filed, the accused gets the right to confiscate whatever property is there. The property remains confiscated until the accused is acquitted. The accused does not know what grounds the agency has for arresting him. The ED officers can also take the accused into custody during the summons.

The government also informed that so far 4,700 cases have been investigated and 338 cases have been registered. Along with this, 313 people have also been arrested. There are adequate safeguards for whatever property is attached before the FIR and chargesheet. If the property is attached, the ED officials explain its need and grounds.

Against which leaders is the ED currently active?

Senior Congress leaders Sonia Gandhi, Rahul Gandhi, P Chidambaram, his son and MP Karti Chidambaram, Shiv Sena leader Sanjay Raut, National Conference leader Farooq Abdullah, West Bengal Chief Minister Mamata Banerjee’s nephew and Trinamool Congress leader Abhishek Banerjee and Several top opposition leaders, including Delhi minister Satyendar Jain, are facing ED probe over alleged money laundering.

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