Prevention of Money Laundering Act is "harsh and draconian", Sr Adv Kapil Sibal argues in PMLA challenge before Supreme Court

  • Gautam Mishra
  • 05:20 PM, 27 Oct 2021

Senior Advocate Kapil Sibal has submitted before the Supreme Court that the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) are "harsh and draconian", in a batch of petitions challenging the constitutional validity of the PMLA Act.

While the petitions pertained to issues ranging from the Enforcement Directorate's (ED) powers for taking on investigations, issuance of summons, carrying out arrests, etc., and the constitutional validity of the PMLA, the bench of Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar that it would first hear the issue of constitutional validity of the PMLA Act.

Sibal submitted that in PMLA cases officers file Enforcement Case Information Reports (ECIR) without showing that tainted money was converted into untainted, and that this information needs to be shared with the accused.

He said refusing to share this information will bar the alleged offender from filing for anticipatory bail.

"If the alleged offender cannot defend himself, it will lead to violation of Article 21," Sibal added.

Sibal further submitted that with the authority attaching all the assets stating that it is generated from proceeds of crime, during such period of attachment the business of the alleged offender finishes completely.

It was also submitted before the Court that the issue of summoning and arresting has to be looked into in light of Articles 14 and 21.

In addition to this Sibal argued that the provisions of search and seizure of the PMLA are inconsistent with the Code of Criminal Procedure (CrPC).

"The whole PMLA needs to be struck down in case the doctrine of severability is not used," Sibal submitted.

The bench has posted the matter for further hearing on November 20.

Earlier, a bench of Justice Khanwilkar had permitted a hybrid mode of hearing in the cases at the request of Senior Advocate Kapil Sibal, who is appearing for one of the petitioner(s).

Cause Title: Vijay Madanlal Chaoudhary and Ors. Vs. Union of India & Other Connected Matters.