Supreme Court upholds validity of various PMLA provisions

27 July, 2022 | Pravina Srivastava


PMLA provisions were upheld by Supreme Court on Wednesday, and many arguments against the Act's provisions were rejected.

Prevention of Money Laundering Act (PMLA) provisions were upheld by Supreme Court on Wednesday, and many arguments against the Act’s provisions were rejected.

A bench led by Justice AM Khanwilkar issued the ruling. Supreme Court on July 15 stated that its decision on arguments against the provisions of Prevention of Money Laundering Act (PMLA) was almost complete.

The top court deferred its decision on a group of petitions contesting certain PMLA provisions on March 15. The petitioners in lawsuit included well-known figures including Karti Chidambaram and Mehbooba Mufti, a former chief minister of Jammu and Kashmir.

Their petitions addressed a number of concerns, such as the lack of an investigation and summons procedure and the fact that accused was not informed of the information included in the Enforcement Case Information Report (ECIR).

Offenses that are both cognizable and non-bailable are covered by Section 45.

According to Section 50 of the PMLA, any individual may be summoned to provide testimony or provide documents by “authority,” which are officers of Enforcement Directorate. All those who have been summoned are obligated to respond to inquiries and provide the papers requested by ED officials; otherwise, they risk PMLA penalties.

However, Center had provided evidence supporting constitutionality of the PMLA’s provisions.

Directorate of Enforcement is looking into some 4,700 instances, Centre has informed the court.

PMLA, according to the Center, is not a typical penal statute; rather, it is a law that mandates the prevention of money laundering, governs specific money-related activities, seeks to seize “proceeds of crime” and property derived from them, and also mandates that violators be punished by appropriate court following the filing of a complaint.

Prevention of Money Laundering Act, 2002, as it exists in India, was claimed by Center to be only a component of this global machine. It said that India is required legally and ethically to embrace international best practises and adapt to changing demands of times as a signatory to treaties and a significant player in international process in the fight against money laundering.