Judgment Upholding PMLA Provisions Was Contrary To Law, Must Be Reviewed Soon By Supreme Court: P Chidambaram & Kapil Sibal

It may be recalled that the three-judge bench of the Supreme Court in July 2022 upheld various contested provisions of the PMLA (Vijay Madanlal Choudhary vs Union of India). Essentially, these provisions pertained to the power of arrest, attachment, and search and seizure conferred on the Enforcement Directorate. The Bench consisted of Justices Khanwilkar, Dinesh Maheshwari, and C.T. Ravikumar.

Additionally, it may also be noted that last year, in September, a three-judge special Bench of the Supreme Court was constituted to hear applications seeking reconsideration of the aforesaid judgment. The Bench consisted of Justices Sanjay Kishan Kaul, Sanjiv Khanna, and Bela M Trivedi. However, it had to be dissolved after as Justice Kaul was due to retire soon.

Talking about the vast powers of the ED, Chidambaram said that the ED has now become the super agency that has taken over all the powers of the SFIO, the income tax, the customs authorities, the excise authorities, the GST authorities, and the CBI. Voicing his concern, he said this is completely destructive of the rule of law.

“I hope the supreme Court will wake up to the gravity of the situation. The damage that is being accused all around….and quickly hear the review petition and set this law right to the extent possible until a new government comes and repeals this law.,” he added.

At this, Sibal suggested that the Court immediately set up a five-judge bench and put a hold on PMLA matters.

“Quite frankly the Court should immediately set up a five-judge bench and say that till such time we decide all matters let this be on hold.”

Chidambaram concurred with this view and supported it by recalling that Sedition has also been put on hold.

Misuse of PMLA

Talking about the complete misuse of the Act, Chidambaram said there is a way of reading and applying an act. A law must be read fairly and applied reasonably and proportionally.

“This law has vested arbitrary, untrammelled power upon one investigating agency which is now more powerful than all the investigating agencies put together.,” Chidambaram added.

In the later segment of the conversation, Chidambaram, voicing his concern, also said that to undo the damage, the only way is to repeal this law. He suggested the formation of a group of jurists' experts to draft a proper PMLA.

PMLA Schedule Should Have Been Kept Short And Tight

They further also discussed that the genesis of law is mainly related to drug, terrorist, and human trafficking money being laundered. Given that, Sibal asked how the scheduled offences in the Act involve most of the laws in the country, including offences under the Indian Penal Code like cheating.

“So, the result is that in any civil action or criminal action on cheating you can arrest a man and the bail Provisions are such that he will not be released on bail.,” Sibal said.

At this stage, Chidambaram spoke against adding provisions like cheating under scheduled offences, thus making it difficult for the accused to get bail. “This schedule should have been kept short and tight.,” he categorically stated. He admitted that the amendment brought to the PMLA to expand the scheduled offences during the UPA regime, when he was the Finance Minister, was a mistake. He added that it was never contemplated that the Act would be misused as it is done now.

Danger Of Not Reviewing The PMLA

Moving ahead with the conversation, Sibal spoke about the danger of not reviewing the PMLA. He said that how this law is being used against every opposition leader in this country will turn the tables. This was said in the backdrop of the upcoming 2024 Lok Sabha elections.

To this, Chidambaram replied saying: “I have no doubt about it. They have arrested ministers, they have arrested a chief minister (which never happened before). This was not the concept of federalism that was taught of by the founders.”

Sibal quipped: “What is left if the ED goes only to the opposition States, targets opposition leaders, target sitting Chief ministers, threatens to arrest them, especially when we are on the cusp of 2024 elections. What is going to happen to our polity.”

Pursuant to this, Sibal averred that Courts must take Suo Motu action against the use of PMLA only against opposition leaders. Chidambaram concurred that the Court should intervene. Here is the related excerpt of what Sibal said:

“The court knows that only opposition leaders are being targeted. All that the court has to do is to have Suo Motu start an action, tell the ED to disclose to them all information regarding every minister or every candidate who has fought (elections) of all political parties, who has got an offence pending against him and ask the ED as to why they have not taken an action against them and why are they taking action against the opposition leaders. The cat will be out of the bag. We will know exactly how partisan this institution is.”

ED's Best Case Is The Coerced Statement

Subsequently, Chidambaram opined that ED's best case is the coerced statement or confessions from the accused or its accomplice.

“Today the only evidence which the ED has in many many cases is to coerce people to make statements, sign it under Section 50 of the PMLA and then say you have made a confession. Which will be completely ruled out in any Criminal Court under criminal law and Indian Evidence Act.”

At this, Sibal also pointed out that in PMLA, unlike the procedure prescribed in the Criminal Procedure Code, the ED does not have to inform the person whether he/ she is being called in the capacity of an accused or as a witness.

The Damage Is Already Done

By the end of the conversation, Sibal asked: “What's use is it to hear the matter when before the LS elections, you might even not get the judgment?”

Answering this, both Chidambaram and Sibal agreed that even if the matter is decided in favour of the petitioners, the damage is already done. However, Chidambaram, sounding optimistic, said that at least future damage can be prevented.

Sibal said that while the Prevention of Terrorism Act, 2002 (POTA) was also a draconian law, this law of PMLA impacts the entire structure of government in this country. “That is the real worry,” he said.

The video of the discussion can be watched here.