The despotic nature of the PMLA

Contact Counsellor

The despotic nature of the PMLA

  • The PMLA of 2002 has evolved as the Government’s “hatchet” law in recent years.

What is the PMLA?

  • 2002: enacted in response to India’s global commitment including the Vienna Convention to combat money laundering.
  • PMLA Bill of 1999: refres to various international conventions and instruments dealing primarily with money laundering, related to crimes involving drugs and narcotics.
  • PMLA was a comprehensive law to counter money laundering, specifically stemming from trade in narcotics.
  • Currently, the offences in the Act are overbroad, and in several cases, have absolutely no relation to either narcotics or organised crime,

What are the arguments raised in the Supreme Court?

  • Comtesting points raised in SC: Gravity of offence of money laundering: national economy is the ultimate victim of this crime.
  • It affects every citizen.
  • Possibility of misuse of the law and subversion of constitutional guarantees.
  • Report: ED conducted 1,700 raids and launched special investigations in 1,569 cases between 2011 and 2020.
  • But secured conviction in only nine of these cases.
  • Lawyers argue that PMLA is invoked in a case against political rival or dissenter, because “process is itself the punishment”.
  • ED could just walk into anybody’s house.

Impact of misuse of PMLA

  • Fundamental purpose of PMLA to investigate conversion of “illegitimate money into legitimate money” is lost.
  • Petitioners point out that Enforcement Case Information Report (ECIR), equivalent of FIR is considered an “internal document” and not given to the accused.
  • ED register ECIR on its “own whims and fancies”.
  • The court is examining submissions that PMLA does not distinguish between an accused and a witness while summoning them.
  • ED registers an ECIR immediately after an FIR is lodged.
  • This is when cause of action to commence an investigation under the PMLA can arise only if the commission of the alleged predicated offence has resulted in generation of “proceeds of crime” and such proceeds are “projected or claimed as untainted property”.