Top court special bench to review its 2022 PMLA judgment on Oct 18

New Delhi More than a year after it affirmed controversial provisions of the Prevention of Money Laundering Act (PMLA), the Supreme Court will on October 18 examine the correctness of its July 2022 judgment to reconsider 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 had agreed to consider reviewing the previous judgment.

“On that day (October 18), we will consider whether the earlier judgment has covered the points being raised in these petitions and if it has, whether that view would need a re-look by a larger bench of five judges,” a bench of justices Sanjay Kishan Kaul and Sudhanshu Dhulia said on Tuesday.

The three-judge bench to consider a review of the previous judgment has been notified and the special bench includes justices Sanjay Kishan Kaul, Sanjiv Khanna and Bela M Trivedi, justice Kaul said.

Addressing the lawyers appearing in a clutch of cases relating to validity of two specific provisions of PMLA, the court said the three-judge bench will scrutinise if the July 2022 judgment had examined the validity of the law in its entirety. “In that matter, ultimately we will finalise the nitty-gritty on whether the earlier bench of three judges have covered all provisions or something has to be addressed,” it added.

Justice Kaul further said that if the court on October 18 comes to a conclusion that the July 2022 verdict needs a re-look, a larger bench of five-judges will have to be constituted, since the previous judgment was also by a three-judge bench.

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.

The court was hearing petitions that have challenged the constitutional validity of Section 50 and 63 of PMLA, which pertain to the Enforcement Directorate’s power to summon witnesses, extract confession and press for punishment for giving false information. This batch will be taken up on November 20 after the special bench takes a call on the review of the main PMLA judgment, it said.

As it adjourned the case, the court was assured by ED that it will not press for the appearance of K Kavitha, Bharat Rashtra Samithi (BRS) legislator and Telangana chief minister K Chandrasekhar Rao’s daughter, for questioning in the alleged scam related to now-scrapped Delhi liquor policy until her petition against the summons and the agency’s proceedings is examined.

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.

Countering the move to reopen the previous judgment, the Union government at the time of the issuance of notice submitted that PMLA was in tune with the global structure and international obligations that the country had, and that the impugned judgment found favour with the legislative mandate.

Responding, the court had said that it was not preventing the government from acting against black money or money laundering but there were prima facie issues raised in the review petition that warranted adjudication. “Prima facie, we are of the view that at least two of the issues raised in the instant petition require consideration,” the court order stated on that day.

The July 2022 judgment by the top court had 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.

Further, holding that money laundering cannot be considered less severe than terrorism, the July ruling upheld 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 the bail proceedings, the statute lays down that the court will presume an accused to be involved in money laundering unless proved contrary.

The 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.

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.

Chidambaram’s petition enumerated 40 grounds to argue that the reasoning of the top court was flawed and erroneous and was contrary to settled decisions by the Supreme Court. He challenged the judgment for allowing retrospective operation of the law by allowing PMLA proceedings to be initiated against a person who is charged with an offence that later gets included as a predicate offence under the schedule attached to PMLA.

Among other grounds, it also questioned how the PMLA judgment was delivered without a finding on whether amendments in the law could be introduced under the parent Act by way of a money bill. This question is pending before a five-judge Constitution bench in the Roger Mathew vs South Indian Bank case of 2020. Later, several other petitions were also filed seeking a review of the 2022 judgment.