'Out Of 5000 PMLA Cases, Only 40 Convictions In 10 Years' : Supreme Court Says ED Must Focus On Quality Prosecution

The Supreme Court on Wednesday (August 7) highlighted the low rate of conviction in money laundering cases and underscored that the Enforcement Directorate (ED) should focus on the quality of prosecution.

A bench of Justices Surya Kant, Dipankar Datta and Ujjal Bhuyan was hearing a bail petition of Chhattisgarh-based businessman Sunil Kumar Agarwal, who was arrested for the offence of money laundering in relation to coal transportation.

Citing the poor conviction statistics in cases under the Prevention of Money Laundering Act (PMLA), Justice Bhuyan said, "somebody made a statement in Parliament that after the amendment, 5000 odd cases have been registered (under PMLA) and conviction has been obtained only in 40 cases(in ten years)". This was a reference to the information provided by Union Minister of State for Home Nityanand Rai on August 6 regarding the data since 2014. 

Justice Kant, on the other hand, commented on the consequences of poor quality of prosecution: "Why you really need to (focus) on the quality of prosecution and quality of evidence is because all the cases where you are satisfied that there is some prima facie case, you need to establish the cases in court...In this very case, you are merely harping upon some statements given by the persons...some affidavits given by 2-3 persons that I was forced to [...] these rights for so and so lower price, that this much cash I have received...this type of oral evidence, tomorrow, God knows that person will stand by it or not...when he enters the witness box, whether he would be able to face cross-examination or not...instead, if you go by some scientific investigation...".

In response, ASG SV Raju asserted that unlike Section 161 CrPC statements, statements under Section 50 PMLA are treated as evidence: "That statement will become evidence, admissible in evidence, treated as evidence...unlike Section 161 which is hit by the bar of Section 162...".

Hearing him, Justice Dipankar Datta, who was recently part of the bench that delivered judgment in Delhi CM Arvind Kejriwal's case, reminded that Section 19 PMLA requires the arresting officer to give "reasons to believe" to the accused. The judge questioned the ASG as to whether he thought the arresting order was sustainable in the present case.

Insofar as the ASG stressed on Section 45 PMLA (which imposes twin conditions for bail), the judge said, "Section 19 requires the arresting officer to form an opinion that he is guilty of the offence...this is the requirement of law...you have not said so in your arrest grounds...before Section 45, Section 19 has to be satisfied. Show us that you have passed the order...if you cannot sustain this Section 19 order, you cannot perhaps say that the burden is on accused to show that he is not guilty...when you are yourself not sure that he is guilty, how can you ask him to prove before court that he is not guilty?".

At this point, Sr Adv Mukul Rohatgi (for petitioner) urged that in Kejriwal's case, the Court has held that reasons to believe, besides grounds of arrest, have to be supplied to accused. He added that as per the judgement, there also must be necessity to arrest, based on evidence with the Investigating Officer.

Pertinently, Agrawal was earlier granted interim bail by the Court on May 17, after noting that there was no scheduled offence made out against him as per the chargesheet filed in the predicate case. Today, the May 17 order was confirmed and the SLP was disposed of.

Counsels for petitioner: Senior Advocates Mukul Rohatgi and Vikas Pahwa; Advocates Nikhil Varshney (Partner, Cyril Amarchand Mangaldas), Tushar Giri and Sahil Bhalaik

Counsels for respondent: ASG SV Raju alongwith Advocates Zoheb Hussain and Arvind Kumar Sharma

Case Title: SUNIL KUMAR AGRAWAL Versus DIRECTORATE OF ENFORCEMENT, SLP(Crl) No. 5890/2024

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