Today, On 6th March, The Supreme Court scheduled hearings for pleas challenging the Vijay Madanlal Choudhary judgment Today. This ruling upheld key provisions of the Prevention of Money Laundering Act (PMLA), granting extensive powers to the Enforcement Directorate (ED). Several petitioners argue that the verdict violates constitutional rights and needs reconsideration.
New Delhi: In the case of Karti P Chidambaram v. The Directorate of Enforcement and related matters, the Supreme Court has noted and is preparing to hear writ petitions challenging the judgment in Vijay Madanlal Choudhary, which upheld certain provisions of the Prevention of Money Laundering Act (PMLA).
The bench, originally consisting of Justice Surya Kant, Justice CT Ravikumar (who has since retired), and Justice Ujjal Bhuyan, was addressing this issue. Following Justice Ravikumar’s retirement, the bench needed to be reconstituted.
The petitions were initially set for hearing on August 7, 2024, but have faced multiple adjournments since then.
The current hearing is scheduled before a two-judge bench, comprising Justices Kant and N Kotiswar Singh, on March 6, 2025.
On July 27, 2022, in Vijay Madanlal Choudhury v. Union of India, a three-judge bench led by Justice A.M. Khanwilkar, along with Justices Dinesh Maheshwari and C.T. Ravikumar, upheld all contested provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
This Act grants extensive investigative and arrest powers to the Enforcement Directorate (ED). The Court clarified that ED inquiries differ from criminal investigations, indicating that many procedural protections applicable to police under the Code of Criminal Procedure, 1973 (CrPC) do not extend to the ED.
Additionally, the ED is not obligated to provide the accused with the Enforcement Case Information Report (ECIR), which the Court deemed an “internal document” rather than the equivalent of a First Information Report (FIR) that must be shared under the CrPC. The ruling also reinforced strict bail conditions in the PMLA, placing the burden on the accused to demonstrate their innocence to secure bail, effectively reversing the standard burden of proof.
Following the judgment, Senior Advocate Kapil Sibal, representing petitioner Karti P. Chidambaram, one of several opposition leaders facing accusations under the PMLA remarked,
“My experience tells me, Milords, matters are never concluded.”
On August 23, 2022, Chidambaram filed a review petition challenging the Vijay Madanlal decision. The petition argued that the Court failed to address whether amendments to the PMLA could be enacted by Parliament through a Money Bill, as several provisions had been modified in this manner.
It also contested the Court’s interpretation of Section 3 of the PMLA, asserting that “projecting or claiming [proceeds of crime] as untainted property” is a crucial element of the money laundering offense.
Additionally, the petition challenged the ruling that ED officers are not considered police officers, contending that, unlike police, who are tasked solely with investigation and punishment, ED officers also have a duty to prevent money laundering.
The petition argued that the PMLA is fundamentally a criminal law and that police officers, under all criminal laws, share the responsibility to prevent crimes. It further opposed the notion that the CrPC does not apply to the ED, asserting that the ECIR should be made available to the accused upon request, as the CrPC is an “integral part of ‘the procedure established by law’ under Article 21.”
The petition also challenged the validity of Section 45, which reverses the presumption of innocence, claiming this practice leads to pre-trial detention and infringes upon the principles of “fair and reasonable procedure” under Article 21.
The ruling had upheld two conditions of Section 45, the accused must demonstrate prima facie innocence and prove they will not commit further offenses. The petition noted that these twin conditions were invalidated in Nikesh Tarachand Shah v. Union of India (2017) for violating Article 21, and it criticized the Vijay Madanlal decision for equating money laundering with terrorist acts, despite lawmakers regarding money laundering as a less severe crime.
Lastly, the petition contested the affirmation of Section 50 of the PMLA, which allows the admissibility of statements made by the accused as evidence, arguing that this violates the right to remain silent and risks “testimonial compulsion.” On August 25, 2022, a three-judge bench led by then Chief Justice N.V. Ramana, along with Justices Dinesh Maheshwari and C.T. Ravikumar, agreed to review the judgment.
Also Read: Supreme Court : Can PMLA Twin Test Affect Bail for Accused?
Despite the various issues raised, the review focuses on two main questions: Is the Enforcement Directorate required to provide the accused with their ECIR? Is the reversal of the presumption of innocence constitutionally valid?
Between October 2023 and April 2024, five additional review petitions were connected to this case, submitted by various PMLA accused individuals. On August 7, 2024, a bench of Justices Surya Kant, Ravikumar, and Ujjal Bhuyan scheduled a hearing for August 28, 2024.
Justice Ravikumar is the only member from the original bench that decided Vijay Madanlal. The case was subsequently listed for further hearings on October 16, 2024, with the possibility of continuation on October 17, 2024.