The court underlined that “the principle of innocence of the accused/offender is regarded as a human right” but “that presumption can be interdicted by a law made by the Parliament/Legislature”.
The Supreme Court on Monday agreed to list for hearing a petition seeking review of its July 27 order upholding the constitutional validity of the Prevention of Money Laundering Act, 2002, as amended from time to time, including those dealing with the powers of the Enforcement Directorate (ED) with regard to arrest, search, attachment and seizure in money laundering offences.
It was mentioned before Chief Justice of India (CJI) N V Ramana who asked the lawyer “is this on Justice Khanwilkar’s judgment”, to which the counsel answered in the affirmative, following which the CJI said “ok, we will list it”.
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Though it upheld the provisions of the law, a three-judge bench of Justices A M Khanwilkar, Dinesh Maheshwari and C T Ravikumar left the question whether the amendments could have brought about by way of Finance Acts in 2015, 2016, 2018, and 2019, respectively, to a seven-judge bench which is already seized of similar question arising in the matter of some other legislation.
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The court underlined that “the principle of innocence of the accused/offender is regarded as a human right” but “that presumption can be interdicted by a law made by the Parliament/Legislature”.
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It refused to accept the contention that the procedure followed by the ED in registering the Enforcement Case Information Report (ECIR) is opaque, arbitrary and violative of the constitutional rights of an accused and that the procedure followed under PMLA is draconian. The court said an ECIR cannot be equated with an FIR, that supplying an ECIR in every case to the person concerned is not mandatory and “it is enough if the ED, at the time of arrest, discloses the grounds of such arrest”.
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Rejecting the argument that it will amount to money laundering only if the proceeds of crime are projected as untainted property, it said, “Section 3 of the 2002 Act has a wider reach and captures every process and activity, direct or indirect, in dealing with the proceeds of crime and is not limited to the happening of the final act of integration of tainted property in the formal economy.”
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It said that “from the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form — be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such processes or activity connected with the proceeds of crime would constitute offence of money laundering”.
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The ruling, however, made it clear that the offence under Section 3 “is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence” and as such, “the authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum”.
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It said “if the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by a court, there can be no offence of money laundering against him or any one claiming such property being the property linked to stated scheduled offence through him”.
The bench upheld the ED’s power under Section 5 of the Act to order provisional attachment of any proceeds of crime. The ruling came on a batch of 242 petitions that raised questions on the different provisions of PMLA including section 3 which defines what would constitute money laundering.
Source : The Indian Express
