The Supreme Court on Wednesday upheld the validity of various provisions of Prevention of Money Laundering Act (PMLA) saying that stringent conditions for bail under the Act is legal and not arbitrary.
The top court said it is not mandatory for ED officers to disclose the ground of arrest at the time of detaining an accused in money laundering case.
A bench headed by Justice AM Khanwilkar also ruled that that Enforcement Case Information Report (ECIR) cannot be equated with FIR and supply of ECIR to the accused is not mandatory.
The Supreme Court also turned down another major challenge by petitioners that filing PMLA charges on cases that occurred beforee 2002 (when PMLA came into existence) is unconstitutional. The Centre justified it by saying that money laundering is a continuing offence, and not a single act but a chain. Proceeds of crime could have been generated before 2002 but could have still been in possession or in use by the accused post-2002.
The bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar upheld the validity of Sections 3 (definition of money laundering), 5 (attachment of property), 8(4) [taking possession of attached property), 17 (search and seizure), 18 (search of persons), 19 (powers of arrest), 24 (reverse burden of proof), 44 (offences triable by special court), 45 (offences being cognizable and non-bailable)
The order came on a batch of nearly 250 petitions which challenged several provisions of PMLA, including initiating an investigation, the power to arrest, search and seizure, among others. Petitioners had argued that unchecked power to arrest accused without informing them of grounds of arrest or evidence is unconstitutional.
Prominent names like Karti Chidambaram and former Jammu and Kashmir Chief Minister Mehbooba Mufti were among the petitioners in the case.
Their petitions raised multiple issues including the absence of a procedure to commence investigation and summoning, while the accused was not made aware of the contents of the Enforcement Case Information Report (ECIR).
Mufti had challenged constitutional vires of section 50, and any incidental provisions of the Prevention of Money Laundering Act, 2002.
Section 50 of the PMLA empowers the `authority` i.e. officers of the Enforcement Directorate, to summon any person to give evidence or produce records.
All persons summoned are bound to answer questions put to them, and to produce the documents as required by the ED officers, failing which they can be penalised under the PMLA.
During the hearing on the pleas concerning the interpretation of certain PMLA provisions, the apex court had deliberated on section 45 of the Act as well as section 436A of the Code of Criminal Procedure (CrPC) and also on balancing the rights of the accused.
While section 45 of the PMLA deals with the aspect of offences to be cognisable and non-bailable, section 436A of the CrPC deals with the maximum period for which an undertrial prisoner can be detained.
The apex court had also heard arguments on section 19 of the PMLA, which deals with the aspect of power to arrest, as well as section 3 that provides the definition of a money-laundering offence.
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