On Wednesday (July 26), the Supreme Court of India upheld the constitutional validity of the Prevention of Money Laundering Act, 2002, and the power of the Enforcement Directorate (ED) to arrest, search, seize and attach properties.
As per reports, the matter was heard by a 3-Judge Bench of Justices Dinesh Maheshwari, AM Khanwilkar, and CT Ravikumar. The apex court in its verdict upheld Sections 5, 8, 15, 17 and 19 of the Prevention of Money Laundering Act.
It further pointed out that ED officials are not ‘police officials’ and thus recording statements of the accused by the central agency is not hit by the fundamental right against self-incrimination.
The Supreme Court also stated that an Enforcement Case Information Report (ECIR), which is essentially an internal document of the central agency, cannot be equated with a First Information Report (FIR) filed by the police.
Just In :
— Supriya Bhardwaj (@Supriya23bh) July 27, 2022
Supreme Court upholds the power of ED to arrest under the PMLA. Says the procedure for arrest is not arbitrary
Reports @AneeshaMathur
As such, provisions of the Code of Criminal Procedure (CrPC), which are applicable to an FIR, will not affect the filing of ECIR. The Court also held that supplying ECIR was not mandatory although Special courts can seek for it to determine whether continued imprisonment of an accused is essential to the case.
In a major relief to the Union government, the Judges upheld the competence of the Parliament to amend the provision of ‘twin conditions for bail’ that is enshrined in Section 45 of the Prevention of Money Laundering Act.
This was despite the fact that the twin conditions were struck down by the apex court in the Nikesh Tarachand Shah vs Union Of India case of 2017. It must be mentioned that the Supreme Court had earlier reserved the judgment in the case on March 15, 2022.
Currently, the Enforcement Directorate is probing matters involving the unlawful recruitment of non-teaching personnel, teaching staff, and primary school teachers in West Bengal under the Prevention of Money Laundering Act, 2002.
The petition against PMLA and ED
During the hearing, the petitioners had argued that the offence of “money laundering” under Section 3 is applicable only if the property is projected as untainted property. The SC dismissed it, asserting that the ‘and’ in Section 3 has to be read as ‘or’ and stated that the section has a wider reach, and covers every activity involved in the process of money laundering, not just the final act. The section also says that possessing the proceeds of the crime can also be termed as money laundering.
The case was before the courts as Vijay Madanlal Choudhary v Union of India, later, 240 other petitions against the PMLA and ED’s powers were also clubbed in the case. The petitioners in the case had questioned the ED’s powers to arrest, the need for a magistrate’s permission, and had argued that the provisions under PMLA violate the fundamental rights of a person by placing the burden of proof on the accused.
The petitioners had also asked the SC if the act of money laundering can be considered a standalone offence and whether it is constitutional to add actions that took place prior to the addition of offences under the PMLA act. They have also questioned the validity of provisions under PMLA that allow authorities to attach properties, saying that it is a violation of rights to property under Article 300A.
