SC To Hear Review Petition On ED’s Powers Under Prevention Of Money Laundering Act

On March 6, the Supreme Court decided that a three-judge bench would hear the review petition concerning the powers and limits of the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA).

The petition was filed after the Court’s decision in 2022, which upheld the constitutional validity of certain provisions of PMLA related to arrest, seizure, and conditions for granting bail.

The petitioners, including prominent individuals like Karti Chidambaram, argue that the Court’s previous decision overlooked key legal concerns.

Key Legal Issues Raised

The main legal issues raised in the review petition include the constitutional validity of provisions in PMLA concerning the ED’s broad powers.

The petitioners challenge provisions related to search, arrest, seizure, and confiscation of property under the Act, asserting that these actions infringe upon fundamental rights.

Specifically, they contend that the ED’s powers under the Act violate due process and could lead to wrongful prosecution, as these powers are expansive and leave room for potential misuse.

The Court’s Earlier Decision

In 2022, the Supreme Court had ruled on the Vijay Madanlal Choudhary case, upholding the constitutional validity of several provisions under PMLA, including the requirement that Enforcement Case Information Reports (ECIR) do not need to be provided to the accused, as the ECIR is considered an internal document.

The Court also confirmed that the provisions relating to arrest, seizure, and bail conditions under PMLA were constitutionally valid.

The judgment had significant implications, as it reinforced the ED’s authority to take stringent actions against financial crimes.

The petitioners, represented by Senior Advocate Kapil Sibal, argue that the previous ruling needs reconsideration.

They assert that the decision failed to adequately consider the implications of the ED’s broad powers under PMLA on individual rights.

In response, Solicitor General Tushar Mehta opposed the review, stating that PMLA aligns with the Financial Action Task Force’s (FATF) guidelines and is not an independent criminal law but a part of India’s compliance with international standards.

The Supreme Court has scheduled the next hearing where it will consider the review petition. A three-judge bench will deliberate on whether to uphold or modify the provisions of PMLA challenged in the petition.

The Court will also decide when the next hearing will take place, as the Solicitor General had requested additional time for preparation.

Significance Of The Review Petition

This case has wide-reaching implications for financial crimes law in India. If the Court decides to revisit its previous ruling, it could lead to significant changes in how the ED operates under PMLA.

The case underscores the ongoing tension between protecting individual rights and combating money laundering and financial crimes.

As the Supreme Court prepares to hear the review petition, legal experts and stakeholders closely follow the developments, as the case will influence both the future enforcement of the Prevention of Money Laundering Act and the scope of ED’s powers in investigating financial crimes.

The decision may have lasting effects on India’s legal landscape, particularly regarding the balance between regulatory action and individual liberties.

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