Supreme Court Adjourns Pleas Challenging Provisions Of PMLA For January 25

The Supreme Court today adjourned the batch of petitions concerned with the interpretation of the Prevention of Money Laundering Act for January 25, 2022.

Since the batch of pleas were listed for January 11, 2022 Senior Advocate Kapil Sibal today mentioned the matter before the bench headed by Justice AM Khanwilkar for adjourning the matter for 4-6 weeks.

"The problem is that there is a lockdown in the sense that on the weekend there was a lockdown. This is a matter in which juniors will have to come and with the rising numbers we don't want to be exposed," Sibal said.

Stressing on the fact that the Top Court was only hearing urgent matters, Senior Advocate Mukul Rohatgi said,

"There are more than 50 or 100 matters. Files will have to be arranged, juniors have not been able to come in every office. My staff is also down with CoVID. The idea is to hear only urgent matters. The matter has been pending for 3 years. Request your lordships to keep the matter after 4 or 6 weeks."

Objecting to the request for adjournment, Solicitor General Tushar Mehta said, "Mr Rohatgi, seems to have lost count of the matters that he has filed. More than 200 to 230 have been filed. We could assist the Constitution Bench in Maratha Reservation matters."

Adding that most of the matters were filed mechanically wherein request was made to pass similar orders of tagging and no coercive steps, SG requested the bench for considering to vacate the same since the matters were "serious" in nature.

"Most of the matters were filed mechanically, casually with request that since there is the same matter and same issue tag it and grant relief for no coercive steps. Your lordship may consider vacating it the same since the matters are serious," SG submitted.

"We're only asking for the matter to be adjourned. Other benches are adjourning the regular matters," said Sibal in response to Mr Mehta's submissions.

Stressing on the SOP issued by the Court, Senior Advocate Mukul Rohatgi said that the present situation is different from the time when the bench was hearing the Gujarat riots matter.

"80% of the matters should not have been filed and I'm making that statement," SG submitted.

Remarking that all the investigations have been affected due to interim relief, the bench of Justices AM Khanwilkar and CT Ravikumar while adjourning the matter said,

"We're giving you 1 week to organize yourself. If you want we can start on the 18th or 25th. As SG has pointed out, there is interim relief in not only 1 matter but more than 220 matters. All the investigations have been affected due to interim relief. We need to organize ourselves. It's not that we cannot discontinue the hearing if we start hearing the matter."

On August 17, 2021 the bench of Justices AM Khanwilkar, Krishna Murari and V Ramasubramanian had observed that there would be no stay in trial or investigation in cases where the order of no coercive simpliciter has been passed.

Earlier the court had agreed to revisit the orders where an interim relief of no coercive action had been granted after the Solicitor General had commended the Top Court that it was time that even those orders needed reconsideration and had relied on order passed by three judge bench of the Top Court to rebut his submission.

The Court had also had taken note of the fact that in pleas that challenged the constitutional validity of the relevant provision(s) of the PMLA Act, sought for quashing of proceedings, grant of interim relief of staying further proceedings related to issuance of summons under section 50 of the Prevention of Money Laundering Act, 2002 during the pendency of pleas and directing no coercive steps to be taken in connection with the issuance of summons, not even a single order had been brought to court's notice granting similar reliefs and said that the petitioners were relying on orders passed in other connected cases.

Background

The larger issue surrounding the batch of plea's among 200 others is concerned with the interpretation of the Prevention of Money Laundering Act which have been pending since 2014 before the Supreme Court.

The Top Court on July 19, 2021, after interacting with the counsels had noted that, "It is agreed that the Central Agency will prepare list of cases enactment-wise and also propositions or questions of law to be decided group-wise."

Solicitor General had thereafter formulated the following questions of law to be considered with regards to the PMLA:

1. Whether the offence under PMLA is cognizable or non-cognizable offence, particularly in view of the explanation inserted in 2019?

2. Whether the procedure contemplated under all provisions of Chapter 12 of the Criminal Procedure Code 1973 is required to be followed while commencing and continuing investigation under the prevention of money laundering act, 2002?

3. Whether the twin conditions for grant of bail as provided for in section 45 of the PMLA as it stands amended is unconstitutional? Whether the amendment takes away the basis of the judgment in 2018 and revives the twin conditions for the grant of bail?

4. In case it is held that the twin conditions stand revived, whether the judgment in 2018 holding that the twin conditions cannot apply to anticipatory bail, lays down the correct proposition of Law?

5. Whether the provisions concerning the burden of proof under PMLA violate fundamental rights of the accused person?

6. What are the contours of the offence under Section 3 of the PMLA? Does the explanation to Section 3 of PMLA (added by amendment in 2019) expand the meaning of the offence under Section 3, and if so is it permissible to do so?

7. Whether the filing of a chargesheet/complaint/FIR in the predicate offence is a prerequisite for an exercise of power of arrest under the PMLA? Can money laundering not be a standalone offence in the context of section 3 read with section 2(u) of PMLA?

8. Whether reliance on the statement recorded by the officers of the Enforcement Directorate during the investigation in judicial proceedings, violate article 20(3) of the Constitution and are inadmissible in light of Section 25 of Evidence Act?

9. Whether the provisions concerning attachment of property under the PMLA violates trh right to property under article 300A

10. Whether the PMLA can be applied to acts which occurred prior to the addition of the offence under the Schedule to the Act?

11. Whether a Writ Court can grant blanket 'no coercive steps' order without any factual foundation being pleaded/examined merely because constitutional validity of certain provisions have been challenged?

12. Whether the Sections 17 and 18 of PMLA as amended, relating to search and seizure are unconstitutional and void?

13. Is the power of arrest conferred under section 19 PMLA violative of articles 14 and 21 of the Constitution?

14. Whether the offence of Money laundering can continue after the predicate offence has taken place? Can the offence of money laundering be committed even if the predicate or scheduled offence was not a scheduled offence on the date when the scheduled offence was committed?