The Supreme Court upheld the validity of the stringent Prevention of Money Laundering Act (PMLA) and vast powers enjoyed by the Enforcement Directorate (ED). It gave the agency the go-ahead to arrest people and conduct search and seizure even when no complaint has been filed, making statements made before it admissible in court and also putting the burden on the accused to prove their innocence.
“Money laundering cannot be said to be less heinous than the offence of terrorism,” the court said. In a 545-page verdict penned by Justice AM Khanwilkar, the court examined threadbare all the controversial provisions of PMLA that were challenged by petitioners, and found all of those to be valid and needed to deal with the menace of money laundering which the bench termed as a threat not only to the social and economic fabric of the country but also to its integrity and sovereignty.
In a major shot in the arm of the anti-money laundering agency, the bench of Justices Khanwilkar, Dinesh Maheshwari and C T Ravikumar also validated the twin bail conditions according to which an accused can be granted bail only if there are reasonable grounds for the court to believe he is not guilty and was unlikely to commit any offence while on bail.
The provision which sets the bar for bail very high in cases registered under the Prevention of Money Laundering Act, had been declared invalid by the apex court in 2017 on the ground of being discriminatory but was reintroduced in the law a year later making its application uniform. The court justified the twin conditions saying it is also part of other laws which have stood the test of time and also constitutional validity. The judges also held that it was not mandatory for the ED to provide a copy of Enforcement Case Information Report (ECIR), the equivalent of FIR in PMLA cases, to the accused and it is enough if the agency disclosed the grounds of arrest at the time of arrest.
They ruled that the entire chain of actions involved in the process of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so would constitute an offence of money-laundering. It means that a person, who buys a property without knowing that it is a tainted one, will also come within the PMLA purview.
