Today(on 4th September),The Supreme Court of India has postponed the hearing on a review petition challenging its previous judgment upholding provisions of the Prevention of Money Laundering Act (PMLA) to September 18. The delay is due to the absence of one judge from the three-judge bench.
Thank you for reading this post, don't forget to subscribe!
NEW DELHI: Today(on 4th September), The Supreme Court of India, deferred its hearing on the review petition challenging its previous judgment that upheld various provisions of the Prevention of Money Laundering Act (PMLA). The decision to postpone the hearing came due to the absence of one of the judges from the designated three-judge bench.
The matter has now been scheduled for September 18.
A bench comprising Justices Surya Kant and Ujjal Bhuyan decided to adjourn the matter, awaiting the full bench’s availability. The review petition aims to challenge the earlier judgment of the apex court, which had supported several provisions of the PMLA, a critical law in India’s fight against money laundering. The petitioners, represented by Senior Advocate Kapil Sibal, argue that certain aspects of the judgment require reconsideration.
In a previous hearing, the Supreme Court had already identified two key issues requiring prima facie consideration. Kapil Sibal, while presenting his arguments for the petitioners, reiterated that the court’s earlier judgment “needs reconsideration.” He urged the court to examine specific provisions of the PMLA more closely.
The Supreme Court, taking a balanced approach, acknowledged the importance of addressing the legal concerns raised by both parties. The court assured that ample opportunity would be given to each side to “present their arguments” and fully explore the relevant legal issues tied to the review petition.
In contrast, Solicitor General Tushar Mehta stood firmly against the reconsideration of the judgment. He emphasized the significance of the PMLA in India’s legal framework, stating that the law was not designed as a standalone criminal statute.
According to him-
“The PMLA is designed by the legislature to align with the guidelines set forth by the Financial Action Task Force (FATF).”
This global watchdog sets the international standards for combating money laundering and terrorist financing, which Mehta suggested the PMLA complies with.
ALSO READ: Supreme Court : Can PMLA Twin Test Affect Bail for Accused?
Additionally, the Supreme Court had already noted in prior hearings that the offence of money laundering is a serious crime, stressing that-
“Such an offense is unacceptable for the country.”
given its implications on national security and the economy.
Background of the PMLA Review Petition
The current review petition traces back to an earlier decision by the Supreme Court, which had upheld the validity of various provisions of the PMLA in its July 27, 2022 ruling. The original judgment empowered the Directorate of Enforcement (ED) to make arrests, conduct searches and seizures, and confiscate the proceeds of crime. Furthermore, the court ruled that the Enforcement Case Information Report (ECIR) could not be equated with the First Information Report (FIR), adding that ED officers do not hold the same legal status as police officers.
One of the key review petitions was filed by Congress MP Karti Chidambaram, among others, who expressed concerns about the stringent nature of the PMLA provisions. The Supreme Court had previously agreed to hear the petition in an open court, highlighting the significance of the issues involved.
Several high-profile individuals were part of the batch of petitions challenging the PMLA, including former Jammu and Kashmir Chief Minister Mehbooba Mufti and Karti Chidambaram. Their petitions raised several concerns regarding procedural deficiencies, such as the lack of clarity on when an investigation begins and the absence of prior knowledge of the contents of the Enforcement Case Information Report (ECIR) for the accused.
A crucial argument from the petitioners’ side emphasized that the absence of transparency in initiating proceedings under the PMLA raised significant concerns about due process. They contended that individuals accused under the law were not adequately informed about the details of the accusations or the evidence against them, which could lead to potential misuse of the statute.
In response, the Central Government vigorously defended the constitutionality of the PMLA and its provisions. The Centre submitted to the court that the law is essential to combating money laundering and preventing the flow of illegal funds. It further argued that the PMLA is not a “conventional penal statute” but is designed to prevent, regulate, and punish money laundering offenses.
According to the Centre’s submission, the PMLA is primarily focused on confiscating the “proceeds of crime” and ensuring that offenders face legal action in a competent court after a proper complaint has been filed. This framework, the government contended, aligns with international best practices.
The Centre also informed the Supreme Court that approximately 4,700 cases are currently under investigation by the Directorate of Enforcement. It stressed that as a signatory to international treaties and a participant in the global fight against money laundering, India is “bound legally and morally, to adopt the global best practices” and to ensure its laws remain responsive to evolving global challenges.
