PMLA : Supreme Court To Hear Review Petitions Against Vijay Madanlal Choudhary Judgment On August 28

The Supreme Court today posted to August 28 the batch of petitions seeking review of the 2022 judgment in Vijay Madanlal Choudhary v. Union of India (VMC).

A special bench of Justices Surya Kant, CT Ravikumar and Ujjal Bhuyan heard arguments briefly, but agreed to adjourn the matter at the request of Solicitor General Tushar Mehta, who submitted that the matter was listed suddenly (post 9 pm yesterday) and therefore, ED may be given some time to prepare and argue.

Initially, the bench proposed to list the matter on August 21. However, at SG Mehta's request, the date was pushed to August 28.

During the hearing, Justice Ravikumar (who was a member of the bench which delivered the VMC judgment) said that it had to be seen whether the reviews were in fact "appeals in disguise."

The hearing also witnessed Senior Advocate Kapil Sibal (appearing for review petitioners) submit that since the review hearing was taking place in open court, the petitioners were entitled to persuade the bench that the VMC judgment suffered from errors and needs to be fully reviewed.

On hearing Sibal, Justice Bhuyan expressed that two issues which prima facie require consideration were identified by the predecessor bench. 

Speaking for the bench, Justice Kant however assured that both sides would be given ample time to present their case and the legal issues which in the opinion of the bench involved some error would be considered.

"We will give ample time to both sides...as my brother has also pointed out, some legal issues where we think that yes there is some error in our understanding [...] confined to that...", said J Kant. In reply, Sibal stated, "Yes, we limit ourselves to that".

Notably, SG Mehta stressed on the August, 2022 order of the Court and submitted that immediately after issuance of notice, ED filed an affidavit stating that two issues were identified by the Court for the purpose of review. This was countered by Sibal, saying that the petitioners have outlined the issues which in their opinion were wrongly decided in VMC and ED's affidavit cannot change the August, 2022 order of the court.

To recap, the VMC judgment was delivered on July 27, 2022 by a bench comprising Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar. Vide this judgment, certain provisions of the Prevention of Money Laundering Act, 2002 (PMLA) were upheld. These included -

(i) Sections 5, 8(4), 15, 17 and 19 of PMLA, relating to Enforcement Directorate's power of arrest, attachment, search and seizure;

(ii) Section 24 of PMLA, relating to reverse burden of proof (in this regard, the Court said the provision had "reasonable nexus" with the objects of the Act);

(iii) Section 45 of PMLA, which provides "twin-conditions" for bail (in this regard, it was said that the Parliament was competent to amend the provision in 2018 even after the Supreme Court's judgment in Nikesh Tarachand Shah, which struck down the conditions).

Subsequent to this decision, the instant review petitions (8 in number) were filed. With the retirement of Justice Khanwilkar, then CJI NV Ramana presided over the bench to consider the petitions.

While issuing notice on August 25, 2022, CJI Ramana-led bench orally observed that at least two conclusions of the judgment required relook - first, that the copy of the Enforcement Case Information Report (ECIR; equivalent of FIR in money laundering cases) need not be given to the accused, and second, the upholding of the reversal of presumption of innocence.

Thereafter, the Court allowed an application for open court hearing of the review petitions. Since issuance of notice, the petitions were listed for hearing for the first time today. 

In related news, another bench comprising Justices Sanjiv Khanna, MM Sundresh and Bela M Trivedi is hearing petitions seeking reconsideration of Vijay Madanalal Choudhary and its reference to a larger bench. The same were last listed on August 5 but no hearing took place as the bench did not assemble. Apparently, the scope of these petitions is wider than the review petitions filed against VMC.

Appearance: Senior Advocates Kapil Sibal, Dr AM Singhvi, Menaka Guruswamy and Vikram Chaudhri (for review-petitioners); Solicitor General Tushar Mehta and ASG SV Raju (for ED)

Case Title : Karti P Chidambaram v. The Directorate of Enforcement | RP(Crl) 219/2022 (and connected cases)

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