PMLA violative of accused’s right to defend himself, impinges Article 21: Kapil Sibal to Supreme Court

Prevention of Money Laundering Act, 2002 (PMLA) does not afford an accused person adequate opportunity to defend himself and is violative of Article 21 of the Constitution, Senior Counsel Kapil Sibal told the Supreme Court on Wednesday (Vijay Madanlal Choudhary v. Union of India)..Sibal, representing a batch of petitioners in the challenge to the Act, said that the law keeps the accused in dark about the evidence and the case against him thereby impinging upon his ability to defend himself.“I should have the ability to defend myself. The right to defend myself if not granted is a violation of Article 21. The problem is there is no (such) procedure under the Act,” he said..The PMLA neither envisages a first information report (FIR) nor compliance with the mandate of a Magistrate’s order under Section 155 of Code of Criminal Procedure, Sibal pointed out.He further said that the Enforcement Case Information Report (ECIR) which is the equivalent of First Information Report (FIR) in a criminal case, is not supplied to the accused by the Enforcement Directorate which is the investigating agency under the Act.“How can they say they will start an investigation but not file FIR or go to the magistrate under Section 155 – (by virtue of) an internal manual under PMLA. Now ECIR is something that's kept by ED to themselves. They don't give anybody. How do they register an ECIR without the evidence of showing how tainted was made into untainted money? That information must be given to me otherwise how will I apply for anticipatory bail,” Sibal demanded..ECIR is nothing but FIR but they (ED) don't call it so, Sibal maintained.The submissions were made before a Bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar in a batch of petitions raising questions on the power of PMLA regarding search, seizure etc and also challenging the constitutionality of several Prevention of Money laundering ActSibal further submitted that PMLA is being applied to ordinary crimes in deviation from the object of the statute which was to address funding of terrorist activities using money from drug trafficking.“PMLA was designed to deal with activities designed to use drug money for terror activities in other words the very predicate offence like growing of poppy seeds and earning money through drugs was the main motive. what did we do? we started applying this to ordinary crimes. For example, cheating under Section 420 which has now become a part of PMLA. This is not in consonance with said objective of the Act,” Sibal said..Pertinently, the Senior Counsel pointed out that the offence under the Act is not keeping the proceeds of the crime but it is money laundering, that is, attempt to convert tainted money to untainted money.“Merely possessing such proceeds of crime, doesn't it amount to money laundering,” the Court asked.“Proceeds of crime is not an offence but it has to be from the tainted money. The offense is by attempting to or by legitimising it as legitimate money. In other words, if I indulge in an act of corruption and keep money at home not PMLA. But the minute I launder it and show on IT, it attracts PMLA. So, offence is not proceeds of crime but money laundering” Sibal replied..Importantly, in all such instances the discretion given to ED officer is very wide.“In all these cases, its discretion of officer and if it is a big fish PMLA comes in the picture. That is why it is all up to discretion that is why genesis of the act becomes important,” he said.He specifically took objection to Section 50 of the Act which says every proceeding before officers shall be deemed to be a judicial proceeding.“I don't know what my status is when I am summoned under Section 50 of PMLA. Under section 50 there is no procedure and they just summon me. They just summon me and they arrest me. This also needs to be tested on the touchstone of Article 14 and Article 21,” he said..He also pointed out issues with respect to jurisdictional aspects.“The issue is ED is located in Delhi and under CrPC police station in area of crime has jurisdiction of the crime. Under PMLA there is no such procedure. ED is located in Delhi. hey say territorial areas are only for convenience. They can call me from wherever they want. As an individual, some magistrate must have control over me. That cannot be left to the whims and fancy of PMLA authorities,” he said.The hearing in the matter will continue on November 10