PMLA: All India Annual Digest 2025

Supreme CourtAccused cannot be kept in custody if order taking cognizance of Enforcement Directorate (ED) complaint has been quashed. (Para 5) Arun Pati Tripathi v. Directorate of Enforcement, 2025 LiveLaw (SC) 371Accused's right to access all relevant materials, relied upon or not, to ensure a fair trial - Procedural denials of document access cannot override the constitutional right to a fair trial under Article 21. The prosecution's concern about roving inquiries was dismissed, as courts can assess document relevance and reject frivolous requests. The appeal was allowed, granting the accused access to unrelied upon documents and reinforcing their procedural and constitutional rights under the PMLA framework. (Para 56) Sarla Gupta v. Directorate of Enforcement, 2025 LiveLaw (SC) 541 : 2025 INSC 645 : (2025) 7 SCC 626Applicability of Cr.P.C. to PMLA - The Court clarified that Section 57 of the Code of Criminal Procedure (Cr.P.C.), which incorporates the requirement of Article 22(2), applies to PMLA proceedings by virtue of Section 65 of the PMLA. There is no inconsistency between the PMLA and Cr.P.C. in this regard. Directorate of Enforcement v. Subhash Sharma, 2025 LiveLaw (SC) 137Applicability of Cr.P.C. to PMLA - The Court clarified that Section 57 of the Code of Criminal Procedure (Cr.P.C.), which incorporates the requirement of Article 22(2), applies to PMLA proceedings by virtue of Section 65 of the PMLA. There is no inconsistency between the PMLA and Cr.P.C. in this regard. Directorate of Enforcement v. Subhash Sharma, 2025 LiveLaw (SC) 137 : 2025 INSC 141Duty of Courts to Uphold Fundamental Rights - The Court reiterated that when a court finds that the fundamental rights of an accused have been violated during or after arrest, it is the court's duty to release the accused on bail. The illegality of the arrest vitiates the detention, and bail cannot be denied based on the twin conditions under Section 45 of the PMLA. The Supreme Court dismissed the appeal, finding no error in the High Court's order granting bail to the respondent. The Court emphasized the importance of upholding constitutional rights and the rule of law in criminal proceedings. The appeal was dismissed, and the respondent's bail was upheld. Directorate of Enforcement v. Subhash Sharma, 2025 LiveLaw (SC) 137Environmental Compensation – Validity of Calculation Method – Jurisdiction of NGT under PMLA - The Uttar Pradesh Pollution Control Board (PCB) determined environmental compensation against Waris Chemicals Pvt. Ltd. for polluting groundwater by storing hazardous chromium waste. The National Green Tribunal (NGT) disapproved of the PCB's method for calculating the compensation, which was based on the total waste found at the site (62225 MT) without properly considering the appellant's actual contribution. The NGT imposed compensation of Rs. 25,39,68,750/- and also held the appellant liable under the Prevention of Money Laundering Act, 2002 (PMLA). Held; the Supreme Court set aside the NGT's decision, noting that the PCB's method of calculating compensation was flawed as it did not accurately attribute the waste to the appellant. The Court remanded the matter to the PCB for redetermination of the environmental compensation in accordance with law. The NGT exceeded its jurisdiction by holding the appellant liable under the PMLA, especially since no criminal complaint or FIR was filed for any scheduled offence under the PMLA. Citing Vijay Madanlal Choudhary v. Union of India, 2022 Live law (SC) 633 the Court emphasized that proceedings under PMLA require a registered scheduled offence. The Court expressed doubt on the jurisdiction of the NGT to direct prosecution under PMLA but did not decide on it, as the impugned order was set aside on other grounds. The appeal was partly allowed. The PCB was directed to re-evaluate the environmental compensation. The NGT's findings on liability under the PMLA were set aside. Waris Chemicals Pvt. Ltd. v. Uttar Pradesh Pollution Control Board, 2025 LiveLaw (SC) 87Illegal Arrest and Bail - Violation of Fundamental Rights - The Supreme Court upheld the High Court's decision to grant bail to the respondent in a case under PMLA. The High Court had found that the arrest was illegal due to a violation of Article 22(2) of the Constitution of India, which mandates that an arrested person must be produced before a magistrate within 24 hours of arrest. The respondent was detained at Airport pursuant to a Look Out Circular (LOC) issued by the Directorate of Enforcement (ED). The ED took physical custody of the respondent on March 5, 2022, but he was formally arrested only on March 6, 2022, and produced before a magistrate later that day. The Court found that the respondent was not produced before a magistrate within 24 hours of being taken into custody, rendering the arrest illegal. The Court emphasized that the failure to produce the respondent before a magistrate within 24 hours violated his fundamental rights...

PMLA: All India Annual Digest 2025

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