Home Law \ Legal Supreme Court of India upholds validity of certain provisions of the Prevention of Money Laundering Act (PMLA)

Supreme Court of India upholds validity of certain provisions of the Prevention of Money Laundering Act (PMLA)

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The top court of India has upheld almost all the stringent provisions of the Prevention of Money Laundering Act (PMLA) in proceeds of crime, search and seizure, power of arrest, attachment of properties, and bail, which were under challenge in the court.

The top court has said that the of Enforcement Case Information Report (ECIR) in every case is not mandatory.

The Supreme Court has also said that the ECIR cannot be equated with FIR and ECIR is an internal document of Enforcement Directorate (ED). The supply of ECIR to accused is not mandatory and only disclosure of reasons during arrest is enough, it added. The supply of ECIR (Enforcement Case Information Report) copy in every case is not mandatory as it is an internal document, the top court said, rejecting the petitioners’ challenge that it is similar to an FIR and the accused is entitled to a copy of the ECIR. It is enough if Enforcement Directorate, at the time of arrest, discloses grounds for such arrest, it said.

The petitioners said that putting the burden of proof on the accused violates fundamental rights like the right to equality and the right to life. The Centre, represented by Solicitor General Tushar Mehta, responded by saying that owing to the serious nature of the money laundering offences and the societal need to curb it, putting the burden of proof on the accused is justified.

Another major challenge, that filing PMLA charges on cases that occurred before 2002 (when PMLA came into existence) is unconstitutional, was also turned down. The Centre justified it by saying that money laundering is a continuing offence, and not a single act but a chain. Proceeds of crime could have been generated before 2002 but could have still been in possession or in use by the accused post-2002.

The centre had justified the constitutional validity of the provisions of PMLA. The centre had defended the amendments to PMLA, saying money laundering poses threat not only to financial systems but the integrity and sovereignty of nations, since money laundering is conducted not just by corrupt businessmen like Vijay Mallya or Nirav Modi but also by terror groups.





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