In recent times there have been allegations by many opposition parties that Central Government led by BJP is misusing the Enforcement Directorate (ED) and harassing/questioning/arresting their political leaders, and this is a form of political vendetta. Most of these leaders are being questioned under the Prevention of Money Laundering Act (PMLA). There were more than 200 petitions filed in various courts of the country against the amendments made to PMLA, which gave the ED and government virtually unbridled power of summons, arrest, and raids and makes bail nearly impossible while shifting the burden of proving innocence on to the accused rather than prosecution. In the end, Supreme Court (SC) clubbed all the petitions, and the case was heard. There are many political leaders who are either on bail or still in custody on various money laundering charges, they include Mehbooba Mufti, veteran Congress leader P Chidambaram and his son, Anil Deshmukh, and Nawab Malik of NCP.
Yesterday a special bench of SC consisting of justices AM Khanwilkar, Dinesh Maheshwari, and CT Ravikumar gave the judgment in this matter. They said the PMLA is a law against the “ scourge of money laundering” and not a hatchet wielded against political rival politicians and dissenters. This is unique legislation, the Parliament enacted the Act as a result of international commitment to sternly deal with the menace of money laundering of proceeds of a crime having transnational consequences and on the financial systems of the countries.
The main grouse in the petitions against the amendments were, that the challengers claimed to violate personal liberty, the procedure of law, and the constitutional mandate. The challengers claimed that the process itself was the punishment. The SC said that “Money laundering is an offence against the sovereignty and integrity of the country”. It gave an expansive meaning to the offence of money laundering to include every process and activity, direct or indirect dealing with the proceeds of crime. Today if one dives into the financial system, the money can be simply transferred abroad with one click of the mouse. It is well known that it is almost impossible to get it back.
The Sc rejected the submissions of a senior advocate, the lead lawyer for the petitioners, that the accused are summarily summoned by the ED, and made to sign statements on the pain of threat of arrest. But the SC said statements were recorded as part of an ‘inquiry’ into the relevant facts in connection with the proceeds of crime. It can not be equated to an investigation for the prosecution.
The petitioners had argued that the ED could arrest a person even without informing him of the charges. This power is violative of the right to ‘due process’ as per Article 21 of the constitution. Besides Article 22 mandated no person can be arrested without informing him/her of the grounds of the arrest. The court rejected this notion that the ED has given blanket powers of arrest, the search of a person, and property seizure. There are enough ‘in-built safeguards’ within the Act.
The court further added, that not showing the Enforcement Case Investigation Report (ECIR) or not supplying the accused with a copy of the document. So long as the person has been informed about the grounds of his/her arrest, that is sufficient compliance with the mandate of Article 22(1) of the constitution. The court justified that the ECIR was an ‘internal departmental document’. Revealing its contents before the completion of inquiry or investigation into the proceeds of the crime would have a ‘deleterious impact’ on the final outcome of the case.
The petitioners had argued that the twin conditions of bail are such that they give hope of freedom non-existent for the accused, and they are- that there should be ‘reasonable grounds for believing that he is not guilty of such offence’ and the accused ‘is not likely to commit any offence while on bail’. The court replied ‘ The offence of money laundering is a no less heinous crime than the offence of terrorism. There is a need for creating stringent laws. Even a plea for anticipatory bail would have to undergo the rigours of the twin conditions under PMLA.
On the issue of the burden of proof resting on the accused. The court said that the provision did not suffer from the vice of arbitrariness or unreasonableness. Once the issue of admissibility of materials supporting the grave suspicion of involvement of the person in the commission of a crime under the Act is accepted, in law, the burden must shift on the person concerned to dispel that suspicion.
The court also rejected objections to the powers bestowed on the ED to attach property as the proceed of crime, and even the property which was not proceeds of crime could be attached. The provisions provided in the Act have a ‘balancing arrangement’ between the interests of the accused and that of the State. Further, if the accused is eventually absolved of the crime, no further action could be taken against the attached property suspected to have been linked with the crime.
It looks like the SC has acted very toughly with the petitioners, who are taking the help of personal liberty, and other such constitutional provisions for normal citizens to remain out of this Act. This verdict is an eye opener and gives a stern warning to all politicians and other persons involved in money laundering. The grouse of every politician is that the money laundering charges are part of political vendetta and it will not hold true now.
Of all the political parties Congress has started filling jittery as many of their leaders are under the lens of ED, some are on bail, some are in custody and many are under inquiry. The court’s stamp of approval comes at a crucial time when Congress leaders like Sonia Gandhi are summoned by the ED and faced with several rounds of questioning spanning hours together. Rahul Gandhi has already faced questioning by ED for many hours. After the SC’s judgment came Congress started saying that ‘ A dictatorial atmosphere will prevail in the country, and this judgment will have far-reaching implications for our democracy especially when governments are anchored in political vendetta.
I do not understand why Congress should have any objections to this Act now. The Act which was passed by both houses of parliament, and SC is saying that there is no violation of any constitutional provisions. In my opinion, is that they know many of their leaders will face lawsuits and some of them might be convicted.
So friends, what do you say on this issue?
Anil Malik
Mumbai, India
28th July 2022