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Synopsis

Supreme Court has constituted a three-judge special bench to hear the review petition challenging the court's judgment defining contours of the Prevention of Money Laundering Act (PMLA) and also upholding the Act.

Justice SK Kaul, who is part of the bench revealed today in court that the bench also consisting of Justice Sanjiv Khanna and Justice Bela M Trivedi shall commence hearing the matter from on October 18, 2023.

In August 2022, the Supreme Court had issued notice in the review petition filed by Karti Chidambaram against the PMLA judgment on limited purview.

A bench of then Chief Justice of India NV Ramana, Justice Dinesh Maheshwari and Justice CT Ravikumar had issued notice on the limited aspects, which include:

1. Regarding the absence of a legal requirement to provide ECIR copy;
2. Reversal of whether the presumption of innocence required consideration.

Earlier, Court had also allowed a plea seeking an open court hearing in the review petition. On August 22, 2022 the Court had agreed to hear a review petition challenging its judgment.

A Justice AM Khanwilkar led bench of the top court on July 27, 2022 had upheld the constitutional validity of various provisions of the Prevention of Money Laundering Act, 2002. The bench, also consisting of Justices Dinesh Maheshwari and CT Ravikumar however held that the challenge to the passage of amendments to the Act in 2019 as a money bill will be considered by a larger bench. 

Over 200 petitions were filed challenging the provisions of the Act. It was argued before the court that the powers of the Enforcement Directorate to arrest, force confessions, and seize property were unbridled.

In its 545-page judgment, the Court answered 12 questions of law formulated in the batch of petitions. A comprehensive look at the same can be found here.

The court had upheld the constitutional validity of —

Section 3 which provides for the definition of money laundering;

Section 5 which pertains to the attachment of property;

Section 8(4) which provides powers to the authority to take possession of the attached property;

Section 17 which provides for search and seizure and Section 45 which provides for offences being cognizable and non-bailable

It had further held that the supply of the Enforcement Case Information Report under PMLA proceedings is not mandatory since ECIR is an internal document and cannot be equated to FIRs.

Case Title: KARTI P. CHIDAMBARAM vs. THE DIRECTORATE OF ENFORCEMENT