Kapil Sibal Appeals to Supreme Court to Reevaluate PMLA Judgment Upholding ED’s Powers Citing Impact on Right to Liberty


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Published on: November 23, 2023 at 11:25 IST

The Senior Advocate Kapil Sibal urged the Supreme Court to reconsider its ruling in the Vijay Madanlal Choudhary case, which significantly enhanced the powers of the Directorate of Enforcement (ED).

Expressing concerns over the extensive powers of the central agency, Sibal argued that the issues at stake are profound and directly impact the right to liberty.

Drawing parallels with historic judgments set aside after years, such as ADM Jabalpur and AK Gopalan, Sibal emphasized the need for the court to reflect on emerging paradigms and their consequences on constitutional principles and individual liberties.

The Supreme Court bench, comprising Justices Sanjay Kishal Kaul, Sanjiv Khanna, and Bela M Trivedi, commenced hearings on a series of applications challenging the interpretation of the Prevention of Money Laundering Act, 2002 (PMLA) in light of the Vijay Madanlal Choudhary judgment.

The July 2022 ruling upheld the constitutional validity of various PMLA provisions related to arrest, seizure, presumption of innocence, and stringent bail conditions.

Notably, a review of this controversial judgment is currently pending before the Supreme Court.

Last August, a bench led by then Chief Justice NV Ramana acknowledged aspects of the judgment requiring reconsideration, including the issue of not supplying the Enforcement Case Information Report (ECIR) to the accused and the reversal of the presumption of innocence.

Despite objections raised by Solicitor General Tushar Mehta, the court agreed to hear the petitions challenging the judgment.

Mehta argued against the court acting as an appellate authority over a coordinate bench’s decision, pointing out a separate pending review petition. He also urged the court to defer the hearing due to the upcoming Financial Action Task Force (FATF) mutual evaluation.

However, the bench, led by Justice Kaul, rejected the objections, emphasizing that the Enforcement Directorate would be allowed to address the court on the issue of maintainability in the next session.

During the subsequent hearing, Solicitor General Mehta continued to oppose the batch of pleas, questioning the lack of specific pleadings challenging PMLA provisions other than Sections 50 and 63. He objected to a lengthy amendment petition challenging various sections of the PMLA, arguing that it introduced new prayers and altered the entire structure of the original petition.

In response, senior advocates Kapil Sibal and Abhishek Manu Singhvi, representing the petitioners, disputed Mehta’s claims, asserting that the lead petition raised essential points. Justice Kaul cautioned the petitioners to adhere to the pleadings during oral arguments.

Sibal, in his argument, clarified that his objective was not to determine the correctness of the Vijay Madanlal judgment but to recommend a reconsideration due to the fundamental issues it raised. He highlighted concerns regarding the classification of PMLA as a regulatory rather than a penal statute, ambiguity in summons issuance, and violations of fundamental rights.

The hearing concluded with Sibal outlining various issues for the court’s consideration, including the interpretation of PMLA, conditions for bail, and the retrospective application of the act. The arguments are set to continue in the next session.

Case Details: Directorate of Enforcement v. M/s Obulapuram Mining Company Private Limited | Criminal Appeal No. 1269 of 2017

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