[Answered] In the light of the recent Supreme Court judgment, discuss the usefulness of the Prevention of Money Laundering Act 2002.

The Supreme Court has upheld the twin conditions for bail under amended Section 45 of the Prevention of Money Laundering Act (PMLA), 2002. PMLA, 2002 was enacted to fight against the criminal offence of legalizing the income/profits from an illegal source. It enables the Government or the public authority to confiscate the property earned from the illegally gained proceeds.

The recent Supreme Court judgment makes the provisions of PMLA, 2002 more apparent in following provisions:

• Power of Arrest: The court rejected that the ED has been given blanket powers of arrest, search of person and property and seizure. The court said that Act has in-built safeguards, including the recording of reasons in writing while arrest.
• Offences under Section 3: Authorities under the 2002 Act cannot prosecute any person on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint.
• ECIR to the accused: SC held that it is not mandatory for the ED to provide a copy of the Enforcement Case Information Report (ECIR) to the accused. The court was of the view that it is enough if the ED disclosed the grounds of arrest at the time of the arrest.
• Twin Conditions of Bail:The court ​​upheld the stringent twin bail conditions required under the law. The two conditions require a court to hear the public prosecutor against the bail plea and reach a satisfaction that there are reasonable grounds to believe that the accused is not guilty of the offense and that he is not likely to commit any offence while on bail.
• Burden of proof: The court upheld that burden of proof rests on the shoulders of the accused and this provision did not suffer from the “vice of arbitrariness or unreasonableness”.
• Amendments through Money Bills: The SC held that this issue would be separately examined by a larger Bench of the apex court.

Money laundering damages the reputation of financial institutions and market and also weakens the “democratic institutions” of the society. The recent judgement of the apex court is the need of the hour.