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The Supreme Court today reconstituted the bench hearing review petitions challenging the Vijay Madanlal Choudhary judgment, which upheld certain provisions of the PMLA.

A bench comprising CJI Surya Kant, Justice Joymalya Bagchi and Justice V Mohana will now be hearing the review petitions. Earlier, the bench comprised CJI Kant, Justice Ujjal Bhuyan and Justice N Kotiswar Singh. 

When the matter was taken up, the CJI said that if the earlier bench continues to hear the matter, 3 benches will have to be broken. The Chief Justice said that he wanted to be frank with the parties and get their take on reconstitution. 

As Senior Advocate Kapil Sibal (on behalf of review petitioners) and Solicitor General Tushar Mehta (for ED) gave their no-objections, with the SG noting that no substantial hearing had taken place before the earlier bench, the CJI dictated an order noting the change in the bench composition. 

Notably, Justice Bhuyan has been critical of the ED in recent times, for example about its conviction rates. In one matter, he commented that the ED cannot act like a "crook". 

Background

The VMC judgment was delivered on July 27, 2022 by a bench comprising Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar. Vide this judgment, certain provisions of the Prevention of Money Laundering Act, 2002 (PMLA) were upheld. These included -

(i) Sections 5, 8(4), 15, 17 and 19 of PMLA, relating to Enforcement Directorate's power of arrest, attachment, search and seizure;

(ii) Section 24 of PMLA, relating to reverse burden of proof (in this regard, the Court said the provision had "reasonable nexus" with the objects of the Act);

(iii) Section 45 of PMLA, which provides "twin-conditions" for bail (in this regard, it was said that the Parliament was competent to amend the provision in 2018 even after the Supreme Court's judgment in Nikesh Tarachand Shah, which struck down the conditions).

Subsequent to this decision, the instant review petitions (8 in number) were filed. With the retirement of Justice Khanwilkar, then CJI NV Ramana presided over the bench to consider the petitions.

While issuing notice on August 25, 2022, CJI Ramana-led bench orally observed that at least two conclusions of the judgment required relook - first, that the copy of the Enforcement Case Information Report (ECIR; equivalent of FIR in money laundering cases) need not be given to the accused, and second, the upholding of the reversal of presumption of innocence.

Thereafter, the Court allowed an application for open court hearing of the review petitions. Since issuance of notice, the petitions were listed for hearing for the first time on August 7, 2024. On this date, the matter had to be adjourned at request of SG Tushar Mehta, who sought some time to prepare and argue. Subsequently, pursuant to a mentioning, the matter was listed on September 18 but got re-listed for October 16, 2024. On the said date, it could not be taken up as Justice Kant (now CJI) was on leave. 

On May 7 last year, the Union Government told the Court that the review hearing could not go beyond 2 specific issues which were orally flagged by the bench which issued notice in August 2022. The 2 issues related to supply of the ECIR to the accused and the reversal of burden of proof (Section 24 PMLA), said SG Mehta. The petitioners however countered the submission, highlighting that no such thing was recorded in the 2022 order. "The order must be taken for what it is...It can't be that the Government of India's affidavit (stating the 2 issues) will override the Court's order," said Senior Advocate Sibal. The petitioners also made reference to a judgment by Justice Abhay S Oka regarding the right of the accused to get list of documents in PMLA cases. 

In July, the Court expressed that it will first hear the parties on maintainability of the review petitions.

Appearance: Senior Advocates Kapil Sibal and Dr Abhishek Manu Singhvi, Advocates Mayank Jain, Madhur Jain and Arpit Goel (for review petitioners); Solicitor General Tushar Mehta

Case Title : Karti P Chidambaram v. The Directorate of Enforcement | RP(Crl) 219/2022 (and connected cases)

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