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Synopsis

The Supreme Court today refused to postpone the review hearing in the pleas challenging the judgment of Vijay Madanlal Chaudhary and Ors. vs. Union of India and Ors. wherein the constitutional validity of various provisions of the Prevention of Money Laundering Act, 2002. were upheld.

Solicitor General Tushar Mehta today informed the court that the Financial Action Task Force (FATF) evaluation was commencing from November 4, and court questioning the legislation at this stage would have a serious implication on the national interest.

"This is bigger than individuals involved and our egos, this is not a standalone offence and there is global response, and PMLA is a piece of legislature prepared in conformity with recommendations issued by FATF..", the SG also told the bench.

Arguing against the review, the SG submitted that he could approach a three-judge bench saying that he disagreed with the view taken by a co-ordinate bench and every section which has been upheld could be challenged again.

"Is it written in stone that court will never look at a five-judge bench decision ever again..", responded the bench.

Court then asked Senior Advocate Kapil Sibal to enlist the issues with the impugned judgment.

The bench then appointed nodal counsels in the matter and said, "List on November 22. No other matter to be listed on that day."

Last month, Justice SK Kaul, who is part of the three-judge special bench constituted 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 had revealed 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.

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