Read Time: 07 minutes

In a batch of petitions challenging the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) Additional Solicitor General SV Raju on Thursday submitted before the Supreme Court that if a scheduled offense has taken place, the proceeds of crime do not cease to be proceeds of crime if there is an acquittal on a technical ground.

A bench of Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar raised a query to Raju whether there is anything on Enforcement Directorate's website accessible to the general public on what procedure is being followed in PMLA cases.

The ASG said he will seek instructions and submit a note on it.

In furtherance to this, Justice Khanwilkar further said, "Because with regard to the manual if you say that it is not in the public domain then explain, what is so confidential about it? When the business of the Parliament can be in the public domain then what is the difficulty in this?"

Over the issue of attachment of property in the money laundering cases, Raju submitted that, "In PMLA offenses we only attach the property to the extent of proceeds of crime, not beyond that. There may be allegations that the property attached is not of equivalent value, but we don't go beyond that."

In addition to this, Raju said, "For example, if a cow is attached and it gives birth to a calf, whether the calf will be considered as attached. Justice Khanwilkar responded stating, "Don't give such examples, the social media will be full of it, don't attach a cow in the example."

ASG SV Raju has concluded his arguments and will be submitting a written statement on the remaining issues. The bench will hear the other parties on March 15, 2022.

Earlier, Mehta had submitted that "PMLA offenses are never committed at the heat of the moment, the offences utilize the most advanced technology and they ensure that the authorities don't find out - and delete the entire trail within minutes if authorities get to know. Unlike IPC (Indian Penal Code) offenses, majority of which are committed and then investigated, money laundering is always a continuing offense."

Mehta had argued that the 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.

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, and that by way of this rule Rs. 18,000 crores have been returned 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 the Government complied, as to be compliant, would be necessary for India's international stability.

In addition to this, 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