ED can't act like a crook, we are concerned about its image: Supreme Court in PMLA verdict review

The Supreme Court on Thursday remarked that the Enforcement Directorate (ED) cannot act like a crook and its conduct must be within the four corners of the law [Karti P Chidambaram v The Directorate of Enforcement].

A Bench of Justices Surya Kant, Ujjal Bhuyan and N Kotiswar Singh underlined that it is concerned about the agency's image and that there is a difference between law-enforcement agencies and those that violate it.

"You cannot act like a crook. You have to work within the four corners of law. There is a difference between law-enforcing authorities and law-violating bodies. See what I observed in one of the cases that came true in what a minister said in parliament.... After 5000 cases, less than 10 convictions. We are equally concerned about the image of ED," Justice Bhuyan said.

The Court made the remarks while hearing the arguments in the review petitions against its July 2022 decision in Vijay Madanlal Choudhary v Union of India, which upheld the constitutional validity of the sweeping powers of the ED under the Prevention of Money Laundering Act, 2002 (PMLA).

Additional Solicitor General (ASG) SV Raju appeared for the ED today and defended the agency.

He stressed that one of the reasons for the low conviction rate in PMLA cases is that the "rich and powerful use a powerful battery of lawyers and file so many applications".

"They do not even allow the trial to take place and delay it," he said.

On the review petitions, Raju argued that they are not maintainable because they are, in effect, appeals disguised as reviews.

"If the review is accepted, it would be tantamount to rewriting the judgment of Vijay Madanlal, which cannot be permitted," he said.

Raju maintained that there was no ground made out by the petitioners to seek a review of the 2022 ruling.

"The constitutional validity was always in my favour. They took a chance and failed in that endeavour. Now they’re saying, no, that was wrong and redo it. Review can’t be an appeal in disguise. They must first demonstrate that there is an error apparent on the face of the record when it comes to these two issues. The error apparent on the face of the record should not be an error that should be fished out. Review cannot be for asking. They have to make out an exceptionally strong case for review," he said.

Background

The review petitioners have primarily contested the constitutionality of the PMLA as upheld in Vijay Madanlal, especially its reverse burden clause, denial of procedural safeguards like providing accused the Enforcement Case Information Report (ECIR), and stringent bail conditions under Section 45 of the PMLA.

The Enforcement Directorate (ED) has raised three primary objections to the maintainability of their review pleas, namely:

1. Whether the review petition satisfies the threshold requirement of showing an “error apparent on the face of the record” in the final judgment?

2. Whether the review petition is in substance an appeal in disguise and liable to be dismissed on that ground?

3. Whether, in light of the 25 August 2022 order, only two issues - supply of the ECIR to the accused and the constitutional validity of the reverse burden of proof under Section 24 can be examined?

Read the questions posed by review petitioners here.

[Live Coverage]