A heated debate unfolded In the Supreme Court as Senior Advocate Kapil Sibal urged a larger bench to reevaluate the Vijay Madanlal Choudhary ruling, known for bolstering the Directorate of Enforcement (ED)’s powers. This call for reconsideration was made due to concerns about the far-reaching authority wielded by the central agency, especially regarding the right to liberty.
The case titled as Directorate of Enforcement v. M/s Obulapuram Mining Company Private Limited | Criminal Appeal No. 1269 of 2017 heard by a bench comprising Justices Sanjay Kishal Kaul, Sanjiv Khanna, and Bela M Trivedi, involved a batch of applications challenging the interpretation of the Prevention of Money Laundering Act, 2002 (PMLA), as outlined in the July 2022 Vijay Madanlal Choudhary judgment. Last year’s ruling upheld the constitutional validity of several PMLA provisions, including arrest, seizure, presumption of innocence, and stringent bail conditions.
A review petition against the controversial judgment is also pending before the Supreme Court. Last August, a bench led by then Chief Justice NV Ramana had expressed concerns over two aspects of the ruling: the decision that accused individuals need not be supplied with a copy of the Enforcement Case Information Report (ECIR) and the reversal of the presumption of innocence.
The Enforcement Directorate had raised preliminary objections against hearing these petitions, citing abuse of the legal process. Solicitor General Tushar Mehta argued against a three-judge bench revisiting a judgment by another coordinate bench and urged the court to defer the hearing due to an upcoming Financial Action Task Force (FATF) mutual evaluation.
However, the bench, led by Justice Kaul, rejected the objections and decided to proceed with the hearing. They clarified that the Enforcement Directorate could present its views on the matter of maintainability at the next hearing.
During the recent hearing, Solicitor General Mehta raised concerns over the lack of specific pleadings challenging PMLA provisions, aside from Sections 50 and 63, in the petitions. He objected to a proposed amendment petition that sought to challenge various PMLA sections, arguing that this approach altered the structure of the original petitions.
Senior Advocates Kapil Sibal and Abhishek Manu Singhvi, representing the petitioners, disputed the Solicitor General’s claims. Sibal emphasized that the lead petition filed by the Enforcement Directorate against a High Court judgment had addressed these points.
Sibal outlined the main issues for the court’s consideration, questioning the classification of PMLA as a regulatory rather than a penal statute. He also highlighted concerns about summonses, self-incrimination rights, and the misuse of PMLA to persecute individuals.
The debate further delved into the interpretation of PMLA provisions, the rigidity of bail conditions, the distinction between ‘inquiry’ and ‘investigation’, retrospective application of the act, territorial jurisdiction, and alignment with international conventions and constitutional principles.
Justice Trivedi questioned the relevance of Article 21 concerning summonses, stating they were meant for information gathering rather than deprivation of personal liberty.
The Directorate of Enforcement, or ED, is a law enforcement agency in India responsible for enforcing economic laws and fighting financial crime, primarily focusing on money laundering and foreign exchange violations. The agency operates under the Ministry of Finance and investigates offenses related to economic laws, such as the Prevention of Money Laundering Act (PMLA).
The arguments will resume in the subsequent hearings, exploring the complexities of the PMLA and its implications on individual rights and enforcement agency powers.