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In a batch of petitions challenging the provisions of the Prevention of Money Laundering Act, 2002 (PMLA), Solicitor General Tushar Mehta argued before the top court that petitioners' contention that the legislation is not Code of Criminal Procedure (CrPC) Compliant, is faulty. He said that it must be Constitutionally compliant and need not be CrPC compliant.

A bench of Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT RaviKumar observed, "A law should be drafted in such a manner that a command man understands it, it is for the common man not for a legal mind since you are taking so long to understand, think about the plight of a common man."

The bench was hearing a batch of petitions challenging provisions of the Prevention of Money Laundering Act wherein Justice Khanwilkar, over the issue of provisional attachment of property, said that "one is attachment and one is registration of offense, there has to be a registration of offense for the attachment of the proceeds of crime."

Responding to which, Mehta stated that the Enforcement Director officer will first inform the police officer and then for the purpose of the reason of prosecution he'll attach the property, however, it is a provisional arrangement, "I'll have to have material otherwise I'll face consequences, whereas, the attachment prevents from transferring it not from using it."

Arguing over the contention raised by the petitioner that PMLA has no standing under the Criminal Procedure Code(CrPC), Mehta submitted that "the petitioners want PMLA to be under CrPC, whereas in CrPC an officer can arrest even on suspicion, even on suspicion that it is a property of theft he can cease it, here we have layers of guidelines for protection."

In addition to this, Mehta further argued that PMLA is a complete code whereas, CrPC is a generic law and under CrPC police officers need not record reasons and under PMLA they'll have to give reasons.

Referring to the rules, Mehta submitted that after conviction under Money Laundering the property and money attached may be returned to the claimant who suffered loss, by way of this rule we have returned Rs. 18,000 Crores to the banks attached from the absconding businessmen.

Mehta further argued that FATF (Financial Action Task Force) conducts audits, it's 2012 normal evaluation report said that India's Money Laundering definition isn't consistent with Vienna Convention and we complied. To be compliant, would be necessary for our international stability.

NOTE: FATF (Financial Action Task Force) is an inter-governmental organization founded in 1989 as an initiative by G7 to frame policies dealing with Money Laundering.

Mehta will continue with his submissions on Tuesday, March 1, 2022.

Earlier, Sr. Adv. Menaka Guruswamy arguing for the petitioner had 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.

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