Reversal of burden of proof in PMLA seems to be very dangerous: Kerala High Court

New Delhi: The Kerala High Court on Thursday raised concern regarding the reversal of the burden of proof under the Prevention of Money Laundering Act (PMLA) which was upheld by the Supreme in its 2022 judgment in Vijay Madanlal Choudhary vs Union of India.

Single-judge Justice A Badharudeen was considering the bail plea moved by M Sivasankar, former Principal Secretary to Chief Minister Pinarayi Vijayan, in a PMLA case registered against him by the Enforcement Directorate (ED) in connection with the LIFE Mission case.

Senior advocate Jaideep Gupta, who appeared for Sivasankar, was taking the court through the judgment of the Supreme Court in Vijay Madanlal Choudhary vs Union of India in which the top court bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar had upheld the provisions of the PMLA.

Justice Badharudeen interjected to clarify whether a review petition had been filed before the top court against the judgment.

Referring to the provisions that effectively put the burden of proving innocence on the accused, the judge orally remarked: “This seems to be very very dangerous.”

He pointed out that while similar provisions exist in other statutes like the Narcotics and Drugs and Psychotropic Substances Act (NDPS Act), the PMLA adds a further provision under Section 45 of the Act on bail that makes it more problematic.

Section 45 lays down that where the public prosecutor opposes the bail application of an accused, a court can grant bail only if it is satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail.

During the hearing, Gupta raised another issue of PMLA cases in India. “In the Indian context, predicate offence is usually investigated by the state government and money laundering is usually investigated by the Central government’s ED. This has led to a serious controversy in the country because it has been noted that it is being used as a weapon to attack certain persons in certain states,” Gupta said.

The judge, however, did not comment on this submission. Specifically on Sivasankar’s case, Gupta argued that the allegations against Sivasankar in the LIFE Mission case arose from the same set of facts involved in the 2020 gold smuggling case in which Swapna Suresh is one of the main accused. He contended that it has been held by the Supreme Court in TT Antony vs State of Kerala that two crimes cannot be registered on same set of facts.

He also said out of all the officials who were involved with the LIFE Mission project, only Sivasankar, who happens to be the Chief Minister’s former Principal Secretary, has been singled out by the Central government’s ED.

It was also submitted that the amount of money alleged to have been given as kickbacks to Sivasankar is less than Rs 1 crore which allows grant of bail under PMLA.

Gupta also highlighted Sivasankar’s medical condition before concluding his arguments. The matter will be heard again on March 27.

The Supreme Court’s 2022 judgment upholding PMLA provisions had begun receiving flak from legal experts. Recently, retired Supreme Court judge Justice Rohinton Nariman said the judgment was “very unfortunate” because it has now become difficult to get bail in money laundering cases.

It, therefore, enables government to use coercive machinery of the State like the Enforcement Directorate and Income Tax Department, which can have a chilling effect on free speech, he stated.

Within a month, a petition was filed seeking a review of the judgment. On August 25, the top court issued notice to the Central government on the review petition.

While doing so, the Court said that while the objective of PMLA is noble and the offence of money laundering is serious, certain aspects of the judgment would need a relook. In its order, the Court noted that “at least” two aspects require to be reconsidered by it.

One of two issues which the Court cited orally was the reversal of presumption of innocence.

“We are completely in support of prevention of black money or money laundering. Country cannot afford such offence. Object is noble. (But) not providing copy of Enforcement Case Information Report (ECIR) and reversal of presumption of innocence which are two issues which needs reconsideration as per us,” the then CJI NV Ramana had remarked.