Tomorrow, the Supreme Court will rule on petitions contesting the validity of a number of the Prevention of Money Laundering Act’s provisions.
The judgment assumes significant since it will deal with a number of problems relating to investigatory powers, calling witnesses, arrests and seizures performed by the Enforcement Directorate (ED), and the PMLA bail process.
The bench led by Justice AM Khanwilkar, who will retire on July 29, will hear more than one hundred petitions on various facets of the PMLA. Justices Dinesh Maheshwari and CT Ravikumar are the other judges on the panel.
The decision will have a significant impact on a number of politically sensitive cases where leaders, businessmen, and others have been threatened with arrest in accordance with the PMLA’s provisions. It will also influence how the ED and other investigation agencies are permitted to act in any ongoing and future cases.
The ability to make an arrest, grant bail, and seize property are all outside the purview of the Code of Criminal Procedure (CrPC) under the strict PMLA law.
The petitioners argued that because the investigative agencies effectively exercise police authority, they ought to be required to abide by the CrPC. Since the ED is not a law enforcement organization, statements made by the accused to the ED during an inquiry may be used against the accused in court, which is against the accused’s constitutional rights.
The petitioners have asserted that some investigative procedures—including opening an investigation, calling witnesses or suspects in for questioning, recording their remarks, and attaching assets—violate the right to liberty.
Even though the maximum sentence for money laundering is seven years, the law makes it extremely difficult to obtain bail.
The power granted to ED officials by Section 50 of the PMLA to summon anyone, record their statement, and force them to sign it renders the defendant bereft of protections and constitutes a grave constitutional infringement, according to the petitioners.
However, the government has defended the Act, asserting that it is a special statute with its own processes and protections.
The Center has also made the case that money laundering is a significant danger to the nation’s economic strength and has worked to establish a strict regime for dealing with it.
The petitioners also contested the changes made as a result of the Finance Act’s introduction as a Money Bill and said they were made to avoid Rajya Sabha scrutiny.
In the 5,422 cases that have been filed under the PMLA since the law’s implementation 17 years ago, only 23 people have been found guilty, according to a reply the Center sent to the Lok Sabha on Monday.
The reply stated that the ED had “recorded 5,422 cases under the PMLA to March 31, 2022, attached proceeds of crime totaling roughly Rs 1,04,702 crores, and filed charge sheets in 992 instances, resulting in the forfeiture of about Rs 869.31 crore and the conviction of 23 accused.”
