Supreme Court Dissolves Bench on PMLA Challenges: A Pause in Vijay Madanlal Choudhary Ruling

In a recent development, On 23rd November 2023, the Supreme Court decided to dissolve the special bench constituted to examine challenges to its Vijay Madanlal Choudhary ruling. The ruling, issued in July 2022, upheld the powers of the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA).
This move to dissolve the special bench came after the union government requested more time, citing the retirement of Justice Kaul next month.

Bench Dissolution and Deferral of hearing on PMLA

The special bench comprising Justices Sanjay Kishan Kaul, Sanjiv Khanna, and Bela M Trivedi, began hearing challenges against the interpretation of the Prevention of Money Laundering Act, 2002, based on the Vijay Madanlal Choudhary judgment. This July 2022 ruling validated key provisions of the act related to arrest, seizure, presumption of innocence, and stringent bail conditions.

Following the union government’s request for more time, the bench, mindful of Justice Kaul’s impending retirement, opted to defer the hearing. The bench proposed the formation of another panel and scheduled the next hearing for two months later.

Solicitor General’s Request and Bench’s Response

Solicitor General of India Tushar Mehta requested an adjournment, citing the complexity of the issues involved. He emphasized the necessity of a comprehensive exploration of the PMLA’s provisions.

Justice Kaul, acknowledging his imminent retirement, expressed reluctance due to time constraints but eventually agreed to defer the hearing.

Legal Proceedings and Government Objections

The government had previously objected to the bench hearing the matter, citing a pending review petition and upcoming FATF mutual evaluation. The court, despite noting objections, proceeded with the hearing.

Before the petitioners presented their case, Solicitor General Mehta raised objections to the alleged lack of specific pleadings in the petitions, particularly regarding certain PMLA provisions.

Petitioners’ Arguments and Concerns

Call for Reconsideration: Petitioners, represented by senior advocates Kapil Sibal and Abhishek Manu Singhvi, urged the court to refer the Vijay Madanlal Choudhary ruling to a larger bench for reconsideration.

Concerns Raised: The petitioners expressed concerns about the extensive authority wielded by the ED, impacting citizens’ rights and the overall polity. Issues such as the classification of PMLA, ambiguity in summoning individuals, and non-supply of key documents were highlighted.

Review Petition: It may be noted that a review of the controversial judgment is also pending before the Supreme Court. Last year in August, while issuing notice on the review petition, a bench led by then Chief Justice NV Ramana had observed that two aspects of the judgment prima facie required reconsideration – one, the finding that a copy of the Enforcement Case Information Report (ECIR) need not be supplied to the accused; and two, the reversal of the presumption of innocence.

Way Forward: The Legal Landscape

The dissolution of the bench marks a pause in the reconsideration of the Vijay Madanlal Choudhary ruling, adding a layer of complexity to the ongoing legal discourse on the powers of the Enforcement Directorate under the PMLA. As the legal proceedings unfold, questions of constitutional validity and individual rights remain at the forefront, shaping the contours of financial regulation and enforcement in the country.