The Supreme Court will review its 2022 PMLA verdict on August 6 amid calls to refer the case to a larger Bench. Petitioners argue key legal issues need deeper constitutional scrutiny.
New Delhi: On 07th May, the Supreme Court of India said that it will hear review petitions filed against its July 2022 judgment in the Vijay Madanlal Choudhary v. Union of India case, in which the top court had upheld the validity of several provisions of the Prevention of Money Laundering Act (PMLA).
The review petitions, including one filed in the case of Karti P Chidambaram v Directorate of Enforcement, will be heard on August 6 and 7.
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A three-judge Bench consisting of Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh stated that it may also look into whether the matter should be sent to a larger Bench if the review petitions are accepted.
The court said in its order:
“We have requested the review petitioners and the Solicitor General (SG) to formulate the proposed issues and circulate among them so that questions which require to be determined can be formulated. All the petitions are directed to be listed on August 6 and if need be the matter shall be further heard in August 7.”
When the case was taken up for hearing on Wednesday, senior advocate Kapil Sibal, who appeared for the petitioners, handed over a list of legal issues that the court should consider.
However, the Bench made an observation that many of those issues would only arise if the review petitions are allowed. Justice Surya Kant remarked:
“Some of the issues indicated Mr Sibal is on the premise that review is allowed, judgment is recalled and then those issues will arise.”
According to the rules, a review petition is generally heard by the same judges who gave the original judgment, or by another Bench of the same strength if any of the original judges have retired.
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But in this matter, the judges noted that a few of the issues raised by the petitioners may require a bigger Bench.
Senior advocate Kapil Sibal responded to Justice Kant’s comment by saying:
“That is why we have urged to decide whether this needs to be referred to a larger bench.”
Sibal also highlighted an earlier ruling by Justice Oka, which said that the Enforcement Case Information Report (ECIR) under the PMLA should be given to the accused.
He said:
“Justice Oka judgment is there on ECIR. ECIR has to be given to accused.”
On the other side, Solicitor General Tushar Mehta strongly objected to the way the review petitions were being presented, stating that they seemed more like appeals.
He criticised the petitioners’ move to re-argue the entire matter.
He said:
“Review petition is here as such like an appeal. The issues (set out by the petitioners) runs into 4 pages reopening the entire Act and the entire judgment.”
The petitions now before the court challenge the correctness of the Supreme Court’s 2022 judgment in the Vijay Madanlal Choudhary case, where the court upheld many important and controversial provisions of the PMLA.
That verdict in July 2022 was passed by a three-judge Bench consisting of Justices AM Khanwilkar, Dinesh Maheshwari, and CT Ravikumar, after hearing 241 petitions that questioned the constitutionality of the PMLA. The court upheld key provisions such as:
- Section 3 – Definition of money laundering
- Section 5 – Attachment of property
- Section 8(4) – Taking possession of attached property
- Section 17 – Search and seizure
- Section 18 – Search of persons
- Section 19 – Power of arrest
- Section 24 – Reverse burden of proof
- Section 44 – Trial of offences by special court
- Section 45 – Offences being cognizable and non-bailable, and imposing twin conditions for bail
- Section 50 – Statements made to ED officials
One of the most debated parts of the 2022 judgment was the Supreme Court’s ruling that ECIR (Enforcement Case Information Report), which is prepared by the Enforcement Directorate (ED), does not have to be given to the accused.
The Court held that ECIR is an internal document and cannot be treated the same as an FIR (First Information Report).
This judgment sparked strong criticism from many experts and legal commentators, who believed it gave too much power to the ED and weakened the rights of the accused.
As a result, several review petitions were filed asking the Supreme Court to reconsider its 2022 decision.
Earlier, in November 2017, a Division Bench consisting of Justice Sanjay Kishan Kaul and Justice Rohinton Nariman had struck down Section 45(1) of the PMLA, which had imposed two tough conditions for granting bail.
That ruling came in the case of Nikesh Tarachand Shah v. Union of India. However, the three-judge Bench in Vijay Madanlal Choudhary later overruled the 2017 decision and upheld Section 45(1).
Now, as the Supreme Court gets ready to hear the review petitions, the legal community will closely watch whether the court reconsiders its stand, especially on controversial parts like the reverse burden of proof and non-disclosure of ECIR.
The outcome could have a significant impact on how money laundering cases are investigated and prosecuted in India.
Case Title:
Karti P Chidambaram v Directorate of Enforcement.
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