SC brushes aside govt objection, sets ball rolling for PMLA verdict review
A bench, headed by justice Sanjay Kishan Kaul, brushed aside the Centre’s protest against hearing the matter without first examining the latter’s objections.
New Delhi A judgment is an opinion that can always change in future because judges also have a duty to keep thinking and evolving, the Supreme Court said on Wednesday as it set the ball rolling on the reconsideration of its July 2022 verdict that had affirmed a spate of contentious provisions of the Prevention of Money Laundering Act (PMLA).
A bench, headed by justice Sanjay Kishan Kaul, brushed aside the Centre’s protest against hearing the matter without first examining the latter’s objections to the manner in which the petitioners reportedly sought to rake up the legal points already settled by the 2022 verdict.
“It’s not fair not to allow the court to proceed. Let the petitioners open the case and we will then see what is to be done,” the bench, also comprising justices Sanjiv Khanna and Bela M Trivedi, told solicitor general (SG) Tushar Mehta, who appeared for the Centre.
READ | Top court special bench to review its 2022 PMLA judgment on Oct 18
Mehta and additional solicitor general (ASG) SV Raju, who was representing the Enforcement Directorate (ED), maintained that the court must not allow the petitioners to argue beyond their challenge to sections 50 and 63 of PMLA, which pertain to ED’s power to summon witnesses, extract confessions, and press for punishment for giving false information. The law officers added that the three-judge bench cannot reconsider the court’s earlier verdict in the Vijay Madanlal Chaudhary case, which was also decided by a three-judge bench in 2022.
But the bench was of the view that these submissions cannot stall the proceedings before it at the threshold. “The limited ambit of this bench is to see whether there is a need to send it to a bench of five judges... whether we feel this is a matter that needs to be referred to the larger bench. This is not something new or being considered for the first time,” it told Mehta.
The SG, however, urged the bench to first examine the preliminary objections that the Centre and ED had to the maintainability of the plea as well as the amendments in the petitions proposed by the petitioners that, Mehta claimed, tried to expand the scope of the proceedings before the court.
To this, the bench reiterated that it is completely mindful of the limited remit of the current proceedings. “We think the contours of these proceedings would be whether a legal point arrived at by a three-judge bench has to be referred to a larger bench of five. Beyond that, we don’t have any ambit. That’s the only scope of these proceedings as we see it. And this has been a practice of this court,” it added.
While the SG pressed on the finality of the issue by contending that more than a hundred petitions were argued for 25 days before the judgement in Vijay Madanlal Chaudhary was delivered, the court responded that the PMLA case was not different from any other batch of petitions where parties approach courts despite a judgment in a related case.
“The duty of a legal system is that you (judges) keep thinking... evolving. A judgment is just an opinion after all. I may think about it a certain way at one point of time, but that view is open to be changed in future,” justice Kaul told Mehta.
More than a year after it affirmed controversial provisions of PMLA, the court is presently examining the correctness of its July 2022 judgment to review if a person being arrested can be denied a copy of the Enforcement Case Information Report (ECIR), and whether the law can ascribe presumption of guilt on an accused as against the presumption of innocence. These two issues were flagged by the court on August 25, 2022, when it agreed to consider reviewing the previous judgment.
During the hearings in September and October, the court said that it may refer the matter to a larger bench of five judges if it reached a conclusion that the July 2022 verdict needs a re-look. To be sure, if the matter goes to a five-judge bench, the entire judgment and not just the two issues flagged in the first order of review can be reconsidered by the larger bench.
Opening the arguments on behalf of the petitioners, senior counsel Kapil Sibal on Wednesday argued that the issues being raised by them are fundamental to the rule of law and that the whole issue needs to be re-examined by a larger bench of five judges.
“The first question to decide is whether it’s a penal statute or not. Then, the court should decide how an enquiry and an investigation be considered the same thing, as has been held in the previous judgment. ED is today an unruly horse. It can go anywhere. It doesn’t need to tell you whether you are an accused or a witness and arrest you for anything,” he argued.
Sibal maintained that he was focussing on the way the previous bench interpreted the PMLA provisions, which has resulted in not only affecting the rights of individuals but also the polity of the country where the Opposition leaders are being targeted with ED investigations.
The proceedings also witnessed the SG and Sibal getting embroiled in a verbal duel. Mehta said that the PMLA proceedings have become a lucrative business for some of the lawyers appearing in the matter while he directly attacked Sibal for giving interviews in the media criticising the money-laundering Act. Retorting, Sibal called Mehta’s submissions “appalling” and added that his remuneration is less than what the SG earns.
The confrontation between the two senior counsel prompted the bench to interfere. “It’s a law point both of you are arguing. It shouldn’t be a personal issue. Everyone should not be on the touchy edge of everything. Both sides seem extra agitated. This should not happen,” justice Kaul said. The bench will continue hearing the matter on Thursday.
The top court on August 25 issued notice to the Union government on the review petition filed by Congress MP Karti Chidambaram against the July 27, 2022, judgment. At the time, the court observed only the two issues relating to the supply of ECIR and the reverse onus of guilt on the accused would be reconsidered for the present and that the entire judgment was not up for review. An ECIR is the equivalent of an FIR in an ordinary criminal case.
The 2022 PMLA judgment affirmed the sweeping powers given to ED under the 2002 Act for summoning individuals, making arrests, conducting raids, and attaching properties of the suspects, saying that law enforcement agencies must be armed with an effective mechanism to safeguard the nation’s wealth from criminals.
The ruling came while dismissing a batch of over 200 petitions filed by several persons facing PMLA proceedings, including Karti Chidambaram, former J&K chief minister Mehbooba Mufti, and former Ranbaxy vice-chairman Shivinder Mohan Singh. The pleas alleged that the law gives unbridled and arbitrary powers to ED in the teeth of constitutional guarantees of right to liberty, property, and right against self-incrimination. But the top court, in July, held that it is “imperative for the State to frame such a stringent law” by grouping the PMLA offenders as a separate class from ordinary criminals.
The 2022 judgment further held that an ECIR does not have to be given to the accused since it is just an internal document of ED, and that informing a person about the grounds of arrest is sufficient. It affirmed PMLA provisions which invoke the principle of reverse burden of proof, in contrast to the cardinal common law principle of “innocent until proven guilty”. In all PMLA proceedings, including bail proceedings, the statute lays down that the court will presume an accused to be involved in money laundering unless proved contrary.
This judgment was criticised for a disquieting erosion of the safeguards to rights to life, liberty, property and against self-incrimination, especially at a time when a spate of ED raids and other actions against opposition leaders has mired the federal financial crime agency in allegations of politicisation.
