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Sr. Adv. Menaka Guruswamy arguing for the petitioner in a batch of petitions challenging the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) submitted that with conviction numbers in PMLA cases being low, appeals by the Enforcement Directorate (ED) should have been higher, however, that is not the case. She cited that in 2010 and 2011, infact, there were no appeals by the ED.

A bench of Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar was hearing a batch of petitions challenging provisions of the Prevention of Money Laundering Act, 2002 (PMLA).

In addition to this, Guruswamy argued that there is no investigation manual with the ED. They are also not following the Code of Criminal Procedure and pointed out the absence of guidelines, checks, and balances to ensure that the ED functions within its guidelines.

Referring to the issue of attachment of property, Guruswamy while giving the example of UAPA, argued that even for an Act which covers terrorism, attachment is carried out only after the conviction, however, in cases under PMLA attachment is carried out during investigation itself.

Justice Khanwilkar responded stating that a provisional attachment is done even in UAPA, to this Guruswamy answered stating that while under UAPA possession doesn't change even after attachment, in PMLA, it does.

Sr. Adv. Aabad Ponda also arguing for the petitioner referred to the judgments stating that under Article 20(3) of the Constitution, protection is available for oral statements as well as production of documents. Whereas, in the case of PMLA, the person is bound to make statements and produce documents.

However, the bench asked Ponda to clarify as to whether a person is not bound to disclose facts in his knowledge under Section 106 of the Evidence Act. Ponda said to this that Section 106 applies post investigation during the trial. "One cannot compel a person during the investigation," Ponda added.

Ponda stated, "Article 20(3) says that I'm bound to appear, bound to give statements and submit documents (non-incriminating), can remain silent if incriminating questions asked. However, here if I don't answer a question they can fine me with Rs. 10,000/- for a question."

Sr. Adv. Siddharth Agarwal appearing for the petitioner argued over the issue of retrospective implementation of PMLA. Referring to the judgment in the case of CIT vs Vatika Township Agarwal stated that the law always looks forward not backward.

"An offense of cheating committed in 2003 cannot be considered as an offense under PMLA which commenced in 2005," Agarwal added.

The bench has posted the matter for further hearing on February 22, 2022.

Earlier, Sr. Adv. Amit Desai arguing for the petitioner had submitted that the law on bail is already settled, "When your Lordships see an offence punishable with 7 years, the question to consider is that should there be such a rule of restricting bail to people who have strong roots in the society?"

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