Anxiety created about law by the Enforcement Directorate (ED) from Maharashtra to Bengal

H.H. (Adv.) Suresh Kulkarni

Many people, including the Assistant Commissioner of Delhi Police Vijay Kumar Sharma filed petitions against the ED in the Supreme Court. They appealed to the Court to verify the legalities of some provisions in the Prevention of Money Laundering Act (PMLA). Through a 3-Bench panel, the Court gave a verdict that all the changes suggested by the Union Government in 2019 are valid. By implementing this Act, so far wealth worth Rs 99,000 crores with big traders, businessmen, politicians and famous people has been impounded. This article discusses the validity and inevitability of the prevalent laws.

1. The noose of money laundering created by the Congress Party led UPA tightened around their own necks, and as per the PMLA Act, the culprits can be arrested and their wealth impounded; hence, criticism of the Act

The Prevention of Money Laundering Act 2002 (PMLA) was passed during the Congress Party led United Progressive Alliance (UPA)Government while P Chidambaram was the Finance Minister. Surprisingly, the noose of this act is getting tightened around the necks of P Chidambaram and his son Karti. Like his father, even Karti could not prevent his arrest. After PMLA was passed, under this Act the Congress Government registered 112 cases from 2004 to 2014. So also, during this period, property worth Rs 5,346 crores was impounded.

The Modi Government came to power in 2014. He declared, “We will neither indulge in corruption nor tolerate any’. This Government has filed over 5,000 cases under this Act and impounded property worth Rs 99,000 crores.

The Modi Government has not been successful in the implementation of the earlier Foreign Exchange Regulation Act (FERA) and earlier Prevention of Money Laundering Act. Actually, these Acts had flaws, where the offenders could avert their arrest and there was a provision of bail provided they paid fines equivalent to 3 times the evaded amount. With the present version of PMLA, the offender can be arrested and his wealth be impounded. As a result, there is strong opposition to the implementation of this Act.

Every Government faces such opposition, and hence, this Government too is no exception. To quote an example – Leaders such as Krupa Singh were in the Congress Party for many decades. During the Congress rule, He was accused of large-scale corruption. The situation came to a stage where he could be arrested any moment. And yet, He was appointed Minister of State for Home. Subsequently, He quit the Congress and joined the BJP and earned the support of the ruling BJP.

Many examples of this Act being used against the opposition party members or those who were in power earlier, can be cited.

2. Instances of the ruling party using this Act for the smooth running (or survival) of its Government rather than for the benefit to the Nation

Here are some examples from the past. From 2004 to 2014, Dr Manmohan Singh’s Government was unable to function on its own strength. During this period, many Bills that were tabled by his Party would be passed only after forcing the likes of Lalu Prasad Yadav, Mayawati, Mulayam Singh Yadav to vote in their favour by threatening them with action for involvement in various scams. Even today, some ex-ministers of the Congress and Nationalist Congress Party are in jail. Many ex-Ministers such as Ashok Chauhan, who was involved in the Adarsh scam, have neither been arrested nor could the law cause any harm to them only because they remained in power.

3. The Supreme Court dismissed all petitions pertaining to the validity of the Law

3A. There were many petitions that have challenged this Act. These petitions mainly state that this Act has removed the protection provided to the accused in criminal proceedings. This Act is too harsh and gives unlimited powers to the ED officials. However, the ED officials are misusing these powers. The petitioners are of the opinion that the suspects are called to the ED office for inquiry and their statements are taken as evidence. According to them, this is a breach of Article 20(3) of the Constitution. The investigation procedures followed under this Act are faulty and not transparent. In criminal proceedings, a complaint is lodged with the Police Department and then, the accused is given a notice. The accused can be arrested only after telling him the offences he has committed. However, under this Act, the accused’s statement during the inquiry goes against him. The suspects are neither given any reasons for the inquiry nor are they served any notice. While granting bail, the following is the norm – ‘Bail is a rule, jail is an exception’. In the present form of PMLA, there is not only disapproval about granting bail, but the Court also applies different conditions for bail.

3B. Supreme Court dismisses petitions against the PMLA : The Union Government opposed all these petitions. It argued that, ‘Britain too has an Act similar to the PMLA. 7,900 cases have been registered under this Act; whereas, in India, only 4,700 cases have been registered. Black money and unaccounted wealth has become dangerous for the world economy. There is a need for stringent rules to keep a check on white-collar criminals, drug peddlers, terrorists.

The Supreme Court studied various prevalent laws such as TADA, POTA, NDPS, Customs Act, Company Act. Then, the Supreme Court declared that the Government has the right to categorise all the accused and their wealth (that is impounded), and dismissed all the petitions.

4. Stringent laws required to keep a check on the corrupt people and those who amass wealth illegally

The present state of our country’s affairs is very pathetic. From the Grampanchayats to the District Councils and Municipalities to Ministries, there is not a single field where bribes are not asked for. There is so much black money in India that when Government officers, political leaders, businessmen, professionals etc. are raided, even currency-counting machines must be getting exhausted. People who perform the task of counting this black money must be getting dazed looking at the huge piles of hard cash – such is the extent of black money in India.
Getting the nod of the Apex Court for some of the provisions of the Act was a requisite for arresting corruption or creating fear in the minds of people who are involved in amassing wealth through illegal means. The important thing is that the verdict should be quick. People accused in the ongoing Court cases or those who have been punished should be given ample publicity. Society should learn about the dishonest deeds they performed when they were in positions of responsibility and respect. This will have a positive effect on society. The Apex Court has suggested implementing these measures in the case of corrupt political leaders.

II Shrikrushnarpanamastu II 

– H.H. (Advocate) Suresh Kulkarni (Founder Member, Hindu Vidhidnya Parishad and Advocate in Bombay High Court, 2.8.2022)

Stringent laws are required to keep a check on the corrupt people and those who amass wealth illegally !