The Supreme Court has rejected the challenge to the various provisions of the Prevention of Money Laundering Act, 2002. It has prescribed certain procedural safeguards in the implementation of the statute by interpreting some provisions. The Bench has kept open the issue of amendments brought as money bill to be decided by a larger bench to which the issue has already been referred.

The Bench comprising of Justice A. M. Khanwilkar, Justice Dinesh Maheshwari and Justice C. T. Ravikumar pronounced its verdict today after the judgment was reserved post a marathon hearing. The Bench has urged the executive to fill vacancies in the appellate tribunal, which was one of the grievances raised by the petitioners.

The Bench had heard a batch of petitions challenging different aspects of the Prevention of Money Laundering Act, 2002 (PMLA). The batch comprising of 242 petitions including those of Karti Chidambaram and Anil Deshmukh had raised questions on different aspects of the PMLA raising the issue of alleged violation of the Fundamental Rights granted by the Constitution.

The issues raised by the Counsels for petitioners including Senior Advocates like Kapil Sibal, Mukul Rohatgi and Abhishek Manu Singhvi were, lack of procedure for investigating a crime under the PMLA, not informing the accused of the grounds of arrest in the ECIR, the validity of the twin bail conditions, lack of check and balance on the procedure, the ambit of the PMLA should be defined, lack of staff in the Appellate Tribunal, etc.

These arguments raised by the Senior Counsels of the petitioners were vehemently countered by Solicitor General Tushar Mehta appearing for the Government of India. He submitted to the court that of 4700 cases being investigated by the ED only 313 arrests have been made and 388 searches have been conducted. Out of 33 lakh predicate offenses ED has taken up only 2186 cases in the last five years. He also submitted that Rs. 98368 crores worth of proceeds of crime have been identified out of which Rs. 55899 crores have been confirmed by the adjudicating authorities. He also pointed out that Rs. 1,249 crores have been identified in the investigation of 57 cases regarding terrorism and Naxal funding including those of Hafiz Muhammad Sayeed, Leader of Hizbul Mujahiddeen Mohammad Salahuddin and drug smuggler Iqbal Mirchi.

He had further submitted that there are adequate safeguards regarding the attachment of properties. He submitted that ED officials have to record reasons for the urgency of attachments. He drew a distinction between the CrPC and the PMLA regarding the procedure for arrest and has to be done only by the Director or the Deputy Director. Additional Solicitor General S. V. Raju appearing for ED had submitted that concealment and possession is categorized as a continuing offence. Refuting the submission of the Counsels for Petitioners he also argued that recording of statements of the accused under Section 50 of the PMLA is not violative of Article 20(3).