The Supreme Court on Wednesday upheld the validity of the stringent provisions of the Prevention of Money Laundering Act (PMLA), including the Enforcement Directorate’s powers to arrest, search and seize ill-gotten wealth that poses threat to economic stability, sovereignty and integrity of the country.
Upholding multiple provisions of attachment of properties involved in money laundering, including existing search and seizure procedures, the apex court said the rules are constitutionally valid and are necessary for tracing of proceeds of crime.
The court’s decision comes at a time when several Opposition parties and the state governments run by them have cast aspersions on the ED, saying it is being used by the ruling NDA at the Centre for political ends.
The court also gave a wider meaning to the offence of “money laundering” under Section 3 to include “every process and activity, direct or indirect, in dealing with the proceeds of the crime and is not limited to the happening of the final act of integration of tainted property in the formal economy. “
Rejecting around over 240 petitions challenging various provisions of arrest and property seizure powers of the ED, a bench comprising justices A.M. Khanwilkar, Dinesh Maheshwari and C T Ravikumar upheld the validity of a clutch of relevant sections.
The apex court also acknowledged that lack of judges to conduct trials in money laundering cases is a serious cause of concern and asked the Centre to fill up vacancies in PMLA Appellate Tribunal.
It also upheld the agency’s power to arrest a person without producing an enforcement case information report (ECIR), which is similar to a first information report of police.
The court said informing an accused why he is being arrested is sufficient. “Supply of a copy of ECIR in every case to the person concerned is not mandatory, it is enough if ED at the time of arrest, discloses the grounds of such arrest,” the 545-page judgement added.
However, when the arrested person is produced before the Special Court, it is open to the Special Court to look into the relevant records presented by the authorised representative of ED for answering the issue of need for his/her continued detention in connection with the offence of money-laundering, according to the SC.
The court was hearing a bunch of around 240 petitions by various people, including former Maharashtra Home Minister Anil Deshmukh, Congress MP Karti Chidambaram, former J&K chief minister Mehbooba Mufti, former Fortis Healthcare promoter Shivinder Singh among others, who are facing trials under the money laundering law. The claimed that various amendments violate their personal liberty, procedures of law and the constitutional mandate.