PMLA verdict — due process will be bulldozed

Source: The post is based on the article “PMLA verdict — due process will be bulldozed” published in The Hindu on 9^th August 2022.

Syllabus: GS 3 – Money-laundering and its prevention.

Relevance: About the issues surrounding PMLA.

News: The Supreme Court of India in Vijay Madanlal Choudhary vs Union Of India found all the provisions of the Prevention of Money Laundering Act, 2002 (“PMLA”) as constitutional.

The Court compared the intensity of money laundering with terrorism while disagreeing with its earlier judgment, where the Court had made a distinction between the two.

What are the significant provisions of PMLA?

The PMLA is meant to deal with prosecution and punishment for the offence of “money laundering.” An accused commits laundering when s/he has relation with any process or activity with the “proceeds of crime.”

So, for the PMLA to come into action, there must have been another crime — independent of the PMLA — from which monies were derived.

What are predicate offences?

The other crime, which is a necessary precondition for an offence under the PMLA is described as the predicate offence.

These predicate offences can be various offences under regular penal law such as the Indian Penal Code 1860, the Prevention of Corruption Act, etc. These are governed by the regular criminal process.

What are the challenges associated with PMLA?

a) Non-supply of the Enforcement Case Information Report (ECIR) to the accused/arrested person, b) Power to make any person (including existing or future accused) state the truth on oath even though it may amount to self-incrimination, c) Once a person is accused of committing the offence of money laundering, the burden of proving that proceeds of the crime are untainted property shall be on the accused, d) Blanket common and non-graded punishment for anyone associated with money laundering.

What are the concerns raised against the judgment?

1) Legislative intent can be a beginning point of constitutional analysis. i.e., whether the state has a legitimate purpose in making a law. But the Court treated legislative intent as the end point of its analysis.

2) The overemphasis on the seriousness of money laundering. There are so many offences under regular penal law that are punishable with life imprisonment or even death, where none of these draconian provisions applies.

3) Legislative intent is reflected by Parliament as part of its normal law-making power, whereas the constitutional due process is incorporated in the Constitution itself and is meant to define the limits of parliamentary law, irrespective of its intent.

Hence, elevating legislative intent can bulldoze any constitutional argument/reasoning that due process has been completely compromised in PMLA cases.