By an Order dated July 27, 2022, the Supreme Court ('SC') in the case of Vijay Madanlal Choudhary v. Union of India,1 upheld the constitutional validity of various provisions of the Prevention of Money Laundering Act, 2022 ('PMLA'), including Sections 3, 5, 17, 19, 45 and 50. Section 3, which defines 'money-laundering', has been held to have a wider reach and captures every process and activity, direct or indirect, in dealing with the proceeds of crime. The authorities under the PMLA cannot prosecute any person on notional basis or 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 before the competent forum. If the person is finally discharged or acquitted of the scheduled offence, or the criminal case against him is quashed by a Court of competent jurisdiction, there can be no offence of money-laundering against him or anyone claiming such property being the property linked to stated scheduled offence through him. The constitutional validity of Sections 5, 17 and 19 of the PMLA, relating to power of attachment, search and seizure by Enforcement Directorate ('ED') respectively have been upheld by the SC. The SC held that the power to take possession of property under Section 8(4) by ED must only be exercised in exceptional cases. Section 45 and 50, which deal with the conditions for bail and powers of the ED, have been upheld. The SC held that the disclosure of the Enforcement Case Information Report by the ED is not mandatory. A review petition against the judgment has been filed and is currently pending before the SC.
Footnote
1. Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929.
Originally published 30 September, 2022
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