PMLA verdict review petitions to be heard by new bench of Supreme Court

A new bench of Supreme Court will hear 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 Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA) [Karti P Chidambaram v The Directorate of Enforcement].

The bench will comprise Chief Justice of India (CJI) Surya Kant and Justices Joymalya Bagchi and V Mohana.

The same was decided by the Court today after obtaining consent for all parties involved in the case.

The matter was earlier being heard by a bench of CJI Surya Kant and Justices Ujjal Bhuyan and NK Singh.

However, the CJI told the parties today that listing the case before that bench would lead to breaking three other benches since Justice Bhuyan and Singh are now sitting as part of other benches.

"If we list it before the original Bench, then three Benches will have to be broken. I have only listed this matter so that your consent can be recorded for the bench allocation," the CJI said.

Solicitor General Tushar Mehta and Senior Advocate Kapil Sibal consented to the same.

"Owing to the element of urgency, let this matter be heard by a three-judge Bench of this composition, that is, CJI Surya Kant, Justice Joymalya Bagchi and Justice Mohana," the Court then proceeded to order.

It also said that it will fix a date for hearing.

The review petitions before the Bench have questioned the correctness of the Court's decision in Vijay Madanlal Choudhary v. Union of India, in which the validity of the PMLA was upheld.

The July 2022 verdict was rendered by a three-judge Bench on a batch of 241 petitions challenging the validity of the law.

Before the Vijay Madanlal ruling was delivered, a Division Bench of Justices Sanjay Kishan Kaul and Rohinton Nariman had struck down Section 45(1) of the PMLA to the extent it imposed two additional conditions for bail. This verdict was pronounced in November 2017 in the case of Nikesh Tarachand Shah v. Union of India.

However, the Nikesh Tarachand decision was overruled in July 2022 by the three-judge Bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar in the Vijay Madanlal Choudhary case.

In that ruling, the apex court upheld the validity of several provisions of the PMLA, including Sections 3 (definition of money laundering), 5 (attachment of property), 8(4) [taking possession of attached property), 17 (search and seizure), 18 (search of persons), 19 (powers of arrest), 24 (reverse burden of proof), 44 (offences triable by special court), 45 (offences being cognizable and non-bailable and twin conditions for grant of bail by court) and 50 (statements made to ED officials).

The Supreme Court also held that the supply of Enforcement Case Information Report (ECIR) to the accused under PMLA proceedings is not mandatory since ECIR is an internal document and cannot be equated to a First Information Report (FIR).

The 2022 ruling invited vehement criticism from various quarters and led to several review applications being filed.

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.

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