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Senior Advocate Amit Desai on Thursday submitted before the Supreme Court that the underlying principle of the Prevention of Money Laundering Act is to deal with proceeds of crime that were integrated into the legitimate economy and started affecting the financial integrity.

A bench of Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar noted that "

The bench was hearing a batch of petitions challenging provisions of the Prevention of Money Laundering Act in which Desai submitted, "The fundamental nature of the offence is regarding the process of converting illegitimate money into legitimate money."

Desai argued that over a period, more offenses have been added. Thus, the original intent is being lost. Whereas, "If Section 3 is construed as per the intent of the legislature, there are issues of grammar, language and drafting," Desai added.

It was further added that the possession of any goods that were taken during a robbery will not come under PMLA, but under the parent act that is IPC. In relation to this, Desai said, "There is a serios issue of conflict between statutes"

Desai alleged that "Ordinary crimes are now being looked at by the PMLA authorities, and genuine victims, innocent third parties who may have acquired properties are being attached. How do we balance this legislation?"

Referring to the attachment of property by Enforcement Directorate Desai stated that the ECIR is never given and the ED walks in to anybody's house, which is the invasion of his privacy.

However, Justice Khanwilkar enquiring about the situation to the problem stated that the argument is that ED is dealing with other properties as well except the proceeds of crime. "What is the solution so that we can spell it out," the bench added.

Desai answered by suggesting that the ED must inform the appropriate authority and the authority must take immediate action.

Arguing over the issue of no bail in the money laundering cases Desai stated, "Liberty is the facet of Article 21, the law on bail are also a facet of Article 21, I want to show the approach in which your lordships has laid down bail as a facet of Article 21."

The bench will continue hearing the matter on February 15, 2022.

Earlier, Sr. Adv. Mukul Rohatgi on Wednesday appearing for the petitioners submitted that in case of proceeds of crime the importance is of projection of money as tainted or untainted, if the money is not projected as untainted there is no offence of PMLA.

Whereas, Sr. Adv. Abhishek Manu Singhvi had argued in the Prevention of Money Laundering Act (PMLA) challenge that the "uniqueness of the PMLA is the entire heart and soul of money laundering" and that one "cannot presume the heart and soul."

Cause Title: Vijay Madanlal Chaudhary and Ors. vs Union of India & Other