The Supreme Court has formed a fresh 3-judge bench comprising Justices Surya Kant, Ujjal Bhuyan, and N. Kotiswar Singh to examine whether its July 2022 verdict upholding the Enforcement Directorate’s powers under the Prevention of Money Laundering Act (PMLA) warrants reconsideration.
The consolidated batch of petitions is slated for hearing on May 7.
Previously, the matter was before a bench of Justices Kant, Bhuyan, and C.T. Ravikumar; however, Justice Ravikumar retired on January 5, necessitating the reconstitution.
Administrative Shuffle & Listing History
On March 6, when the pleas appeared before a two-judge bench, Justice Kant observed that the case had been incorrectly listed and assured counsel that a three-judge bench would soon take it up. This administrative clarification paved the way for the formal recreation of the bench now set to review the 2022 decision.
Background Of the 2022 Verdict
In Vijay Madanlal Choudhary v. Union of India, decided on July 27, 2022, the Supreme Court examined more than 200 petitions targeting various PMLA provisions. The court upheld the ED’s authority to arrest individuals, attach property linked to money laundering, and carry out searches and seizures under the 2002 legislation. Those challenges had questioned the procedures for arrest, investigation, and seizure, as well as sought the court’s interpretation of key statutory clauses.
Opposition Concerns
The PMLA has frequently been criticized by opposition parties as a tool wielded for political vendettas. By affirming the law’s provisions, the top court underscored that money laundering posed a “threat” to the integrity and smooth functioning of the financial system, distinguishing it as “not an ordinary offence.”
Grounds Cited For Review
Shortly after the 2022 judgment, the Court accepted review pleas in August of the same year, pointing to two principal issues that “prima facie” demanded fresh scrutiny:
Non-provision of the Enforcement Case Information Report to the accused; and
The PMLA’s reversal of the traditional presumption of innocence, placing the onus on the accused to prove their innocence once certain thresholds are met.
These aspects form the core of the pending review petitions now before the reconstituted bench.
Key Observations In the Original Ruling
The Court emphasized that ED officials under the PMLA were “not police officers as such,” and that an ECIR could not be equated with a First Information Report (FIR) under the Code of Criminal Procedure. Supply of an ECIR copy in every instance was deemed “not mandatory,” provided the ED, at the point of arrest, clearly disclosed its grounds for taking action.
Cognizability & Bail Conditions
On Section 45, which renders PMLA offenses cognizable, non-bailable and imposes twin conditions for bail, the Court held that the provision was “reasonable” and not marred by arbitrariness or unreasonableness.
With the May 7 hearing approaching, the newly constituted bench will revisit these pivotal questions. The outcome could reshape the balance between robust anti-money-laundering measures and procedural safeguards for the accused. As legal teams prepare their arguments, all eyes will be on whether the Supreme Court reaffirms its earlier stance or opts to modify key aspects of the PMLA regime.
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