Legal Eagle: In money-laundering war, SC strengthens ED's hands

The Supreme Court has upheld the provisions of the PMLA which empowers the Enforcement Directorate to arrest an offender without informing him of the grounds for his arrest. An ECIR need not be given to the accused — so that he does not even know what charges he faces

Olav AlbuquerqueUpdated: Friday, July 29, 2022, 01:40 AM IST
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When law-makers turn law-breakers, some if not all of them turn law-opposers (opposition MPs) with the result that they now face serious charges under the Prevention of Money Laundering Act, 2002 which was amended when the Congress was in power. Congress MPs like former finance minister P Chidambaram have faced charges under this law, and the latest is Arpita Mukherjee, aide of West Bengal minister Partha Chatterjee.

The Supreme Court has upheld the contention that the Prevention of Money Laundering Act is a separate code which overrides the Criminal Procedure Code, 1973. In simple terms, this means the provisions against self-incrimination when violated have been held to be within the parameters of the fundamental rights. Hence, when Enforcement Directorate sleuths grill their suspects like Sonia and Rahul Gandhi, what they divulge during interrogation will be used against them.

This flouts their right against self-incrimination enshrined in Article 20 (3) of the Constitution. Even the right to be informed of the charge against these suspects will be overturned by this judgment, delivered by a three-judge bench comprising AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar, until a Constitution bench studies the issues if they are raised afresh at some future time.

So the Supreme Court has upheld the draconian provisions of the PMLA which empowers the Enforcement Directorate to arrest an offender without informing him of the grounds for his arrest. An ECIR, the equivalent of an FIR in ordinary parlance, need not be given to the accused — so that he does not even know what charges he faces. This appears unconstitutional because the offender will not be able to refute the charges if he does not know what they are. In such a scenario, getting bail is also unlikely.

The PMLA was enacted pursuant to the United Nations convention on money-laundering, which dealt with money obtained through drug-trafficking or funding terrorism. But the grouse is in India, today all other offences not related to money-laundering through drug trafficking or terrorism related crimes are brought under the purview of the PMLA. Former Shiv Sena minister Anil Parab, who was accused by Paramibir Singh of demanding that renegade cop Sachin Waze extort money from Mumbai bars, knows this very well.

Some of the provisions of the PMLA are that the ED need not give an ECIR to an accused. Ipso facto, it implies the ED can arrest a suspect on charges of money-laundering without divulging the identities of the witnesses who are to depose against the suspect, or reveal the list of documents and other evidence against the offender obtained from banks and other financial institutions.

This is exactly what has happened with Sonia Gandhi being grilled for 11 hours in the National Herald case. This has given rise to the allegation that the ED is used as a tool by the ruling party to decimate the opposition who are made to run from courts to lawyers.

Apart from Uddhav Thackeray loyalist Anil Parab, Sanjay Raut, executive editor of Saamna, also faces charges under the PMLA as do Ajit Pawar from the NCP and Farooq Abdullah, all big guns in national politics. Another big name is DK Shivakumar from the Congress — which implies that politicians use black money to distribute cash to voters during the elections. For politics is the art of converting black money into white, and fooling the voters into voting for the corrupt.

Out of 5,422 cases filed under the PMLA, only 992 charge-sheets have been filed and 23 persons convicted out of 24 cases whose trials have ended. The proceeds seized till date amounts to Rs 100,000 crore. What we must remember is that the conviction rate is calculated of trials which have ended and not of accused who have been discharged.

A hundred special leave petitions were filed in the Supreme Court asking whether the provisions of the PMLA such as granting of bail and refusing to give a copy of the ECIR to the accused were lawful or not. Another 132 writ petitions filed under Article 32 by those under the ED scanner were heard with the 100 SLPs. The 536-page judgment of the Supreme Court is a veritable PhD thesis dissecting the scope and constitutional veracity of this draconian law which overturns all fundamental rights.

There is no doubt that money-laundering adversely affects nearly five per cent of the global GDP. Also, the placement, layering and integration required to convert black money into white needs draconian search-and-seizure powers which have been upheld by the Supreme Court. However, it is not only opposition MPs and MLAs who have been accused of such money-laundering like Anil Parab and Sanjay Raut, but also opposition MLAs who joined the ruling party. In Goa, an independent MLA, Rohan Khaunte, was accused by the BJP spokesman, Premanand Mhambrey of running nearly 18 companies from a residential flat in Panjim. The high court quashed the FIR against Rohan Khaunte for allegedly assaulting Mhambrey. After he joined the ruling party in Goa, nothing more has been heard.

So, whether the government targets only inconvenient opposition politicians under the PMLA (which is the sole domain of the ED) remains to be proved by another petitioner who approaches the Supreme Court with statistics. Until that time, the draconian inquisition of the opposition under the PMLA is a presupposition of their subordination to the ruling party.

The writer holds a PhD in law and is a senior journalist-cum-advocate of the Bombay High Court

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