Supreme Court begins hearing petitions challenging money-laundering act, seeks submissions on Nov 22

New Delhi: The Supreme Court on Wednesday heard the petitions filed against the 2022 judgment which upheld the constitutional validity of the provisions under the Prevention of Money Laundering Act (PMLA) relating to the Enforcement Directorate's powers to arrest, seize, the presumption of innocence, and stringent bail conditions.

A three-judge special bench of Justices Sanjay Kishan Kaul, Sanjiv Khanna, and Bela Trivedi heard the case and passed orders directing both sides to make submissions on November 22.

An agitated Solicitor General Tushar Mehta raised objections to the hearing and said that the review petition should be heard first.

"The judgment was rendered after a lot of deliberations. I am on the abuse of process of law. The averment is petitioner is an enlightened citizen and he feels that Section 50 is wrongly interpreted. Is that a ground to reconsider a coordinated bench judgment? The review is yet to be heard," he said.

Justice Kaul, however, held that if it is worth it, the three-judge bench can revisit.

"The court will show circumspection in deciding whether to look into it. But there cannot be a bar," he said.

He further told the SG that after hearing the party, the court may say that it will wait for the review, but it cannot be said that the court can't revisit the decision.

Appearing for the petitioners, senior advocate Kapil Sibal raised five broad points in front of the special bench.

Firstly, he challenged the PMLA not being recognised as a penal statute. "I can be convicted for money laundering and sentenced. And it's not a penal statute?" he asked.

Secondly, he raised the issue that when someone is summoned by the ED, they don't know if they are being summoned as a principal offender or as a witness.

Thirdly, he raised the issue of access to the Enforcement Case Information Report (ECIR), contending that if the accused does not know what are the allegations against him, how will he defend himself and how will he get bail?

In his fourth point, Sibal raised the issue of Section 3 on proceeds of crime. And finally, he challenged the twin conditions for bail under PMLA.

The bench, in its order, said that it would only address issues relating to the PMLA. It further said that the court has noted objections raised by the SG that an academic exercise should not be carried out and there should be an issue.

It also noted the preliminary objection by the SG that as the order is in review, any further considerations should await that. The order further noted that the petitioner sought reconsideration of the judgments on certain matters. The bench fixed November 22 as the date for further hearing and allotted half day to each side.

In August 2022, a bench headed by then CJI N.V. Ramana issued notice and observed that two facets of the judgment prima facie needed reconsideration.

Firstly, the provision that the accused need not be given a copy of the Enforcement Case Information Report (ECIR). Secondly, the reversal of the presumption of innocence.

In the Vijay Madanlal Choudhary case judgment, the top court upheld the validity of certain provisions of PMLA by holding that the same has a reasonable nexus with combatting money laundering.

Previously, the division bench of Justices Rohinton Nariman and Sanjay Kishan Kaul had struck down Section 45(1) of the PMLA for imposing two additional conditions to grant bail to money laundering accused calling them arbitrary. However, this decision was overruled by another bench comprising Justice A.M. Khanwilkar, Dinesh Maheshwari, and C.T. Ravikumar in the Vijay Madanlal Choudhary case.

Following this, several review petitions were filed, which the three-judge bench started hearing on Wednesday.