The Supreme Court on Wednesday, July 26, upheld the Enforcement Directorate's powers under stringent provisions of the Prevention of Money Laundering Act (PMLA) in connection with the definition of the proceeds of crime, power of arrest, search and seizure, attachment of properties, as well as the twin bail conditions under the law. A bench comprising Justices AM Khanwilkar, Dinesh Maheshwari, and CT Ravi Kumar delivered the judgment on over 200 petitions challenging various provisions of the PMLA. Anil Deshmukh, Karti Chidambaram and Mehbooba Mufti were among the high-profile petitioners.
The top court said it is not mandatory for the Enforcement Directorate (ED) officers to disclose the grounds of arrest at the time of detaining an accused in a money laundering case. The apex court said the supply of Enforcement Case Information Report (ECIR) in every case to the person concerned is not mandatory. The ECIR is the ED's equivalent of a police FIR. The bench said it is enough if the ED discloses grounds at the time of arrest.
However, when a person is before a special court, the court can ask for records to see if continued imprisonment is necessary. It added that ECIR cannot be equated to an FIR, as it is an internal document. Detailed judgment will be uploaded later in the day.
The top court dealt with the validity of a wide range of powers granted to the ED under the amended law against money laundering. The powers available to the ED for search, arrest, seizure, investigation and attachment of proceeds of offence under PMLA had been challenged.
The apex court also heard arguments on Section 19 of the PMLA, which deals with the aspect of power to arrest. The Section says that if the ED has reason to believe that "any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest." Rejecting the challenge to the constitutional validity of Section 19 of the PMLA Act 2002, the apex court said, "The challenge to the constitutional validity of Section 19 of the 2002 Act is also rejected. There are stringent safeguards provided in Section 19. The provision does not suffer from the vice of arbitrariness."
The bench headed by Justice A M Khanwilkar also said Section 5 of the Act, which deals with the attachment of property of those involved in money laundering, is constitutionally valid. "Section 5 is constitutionally valid. It provides for a balancing arrangement to secure the interest of the person as also ensures that proceeds of crime remain available to be dealt with in the manner provided under the Act," the bench said while pronouncing the verdict.
The apex court verdict is likely to affect a huge number of Opposition leaders, who are under the scanner of the Central investigating agency. The petitioners had contended that the PMLA provisions violate some fundamental rights. The petitioners said that unchecked power to arrest accused people without informing them of grounds of arrest or evidence is not constitutional.
The law has faced a lot of criticism, including the non-reporting of grounds of arrest, arrest of persons without ECIR (similar to FIR) copy, strict bail conditions etc.
During the hearing, the apex court also deliberated on Section 45 of the Act as well as Section 436A of the Code of Criminal Procedure (CrPC) and also on balancing the rights of the accused. While Section 45 of the PMLA deals with the aspect of offences to be cognisable and non-bailable, Section 436A of the CrPC deals with the maximum period for which an undertrial prisoner can be detained.
With IANS and PTI inputs