PMLA most draconian statute ever: Sibal urges SC to reconsider ‘Vijay Choudhary’ judgment

New Delhi: “The Prevention of Money Laundering Act is the most draconian statute that has ever seen the light of day in the country,” senior advocate and Member of Parliament Kapil Sibal told the Supreme Court of India on Monday, as reported by LiveLaw on Monday.

“The act gives draconian powers to the Directorate of Enforcement for arrest, attachment, search and seizure. The safeguards provided in the Code of Criminal Procedure are excluded. There are no safeguards at all under the statute,” he said.

A bench of Justices Krishna Murari and V Ramasubramanian was hearing a batch of appeals against an order of the Madras High Court ordering a fresh enquiry into the cash-for-jobs scam, in which Tamil Nadu minister, V Senthil Balaji, among others, has been accused of accepting bribes from job aspirants in exchange of appointments to the state transport corporation between 2011 and 2015.

Sibal told the top court Monday that the application of the Prevention of Money Laundering Act, 2002 and the directorate’s modus operandi are not only against all ‘canons of justice’, but also violative of the principles of federalism.

He explained: “The Enforcement Directorate is going around the country now, targeting people. For the Central Bureau of Investigation to conduct a probe, the state’s consent in needed. But there is no such restriction for the ED. It has started investigating even predicate offences. This violates federal principle. Imagine a scheduled offence has taken place in West Bengal, but a small part of the offence is in Delhi. What does the Enforcement Directorate do? It files a complaint in Delhi and the cases in Bengal get transferred to the capital. These are issues which can affect the polity of the country.”

The senior counsel vehemently argued that the Supreme Court’s July 2022 decision in Vijay Madanlal Choudhary needed a ‘relook’. In this judgement, a three-judge bench of Justices AM Khanwilkar, Dinesh Maheshwari, and CT Ravikumar had upheld the provisions of the Prevention of Money Laundering Act relating to the ED’s power of arrest, attachment, and search and seizure. The top court had also upheld the reverse burden of proof under Section 24 of the Act, saying that it had reasonable nexuses with the objects of the Act.

Sibal pointed out that the offence of money laundering within the meaning of Section 3 of the act, as interpreted by the Vijay Madanlal Choudhary bench, included every process and activity – direct or indirect – in dealing with the proceeds of crime, irrespective of whether such tainted property

have been integrated into the formal economy.