Senior Advocate Maneka Guruswamy told the Supreme Court that under the current regime of the PMLA, the process itself is the punishment while arguing on behalf of the accused under the PMLA.
Today, the three-judge bench of Justice AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar in its Day 14, heard the Submissions of Sr. Adv. Maneka Guruswamy, Sr. Adv. Aabad Ponda, Sr. Advocate Siddharth Agarwal in the batch of petitions relating to the interpretation of the Prevention of Money Laundering Act, 2002.
In PMLA, the process itself a punishment: Sr. Adv Maneka Guruswamy
Sr. Adv. Guruswamy began her submissions for the day by apprising the Bench of the fact that the PMLA as it stands now is in derogation of the safeguards laid down by the Constitution and of the penal and procedural laws in force in India. She submitted that under the current regime of the PMLA, the process is the punishment. Owing to the enigmatic nature of the ECIR, which at no point is disclosed to the accused or to his advocate, the attachment procedure conducted even prior to the conviction of the accused in the money-laundering trial are all beyond the scope of the constitutional mandates in place for the protection of people.
She argued that in light of the annual report released by the Ministry of Finance, under the category of unspecified offences, there were 220 such instances where the predicate offence was unknown to the ED and while the majority of these cases had been investigated into, only 25 had been prosecuted. This illustration was intended to demonstrate the lapse in efficiency and the poor performance which is a consequence of deviance from procedural and constitutional mandates.
However, the Court took objection to this line of argument as the validity of the provisions of the Act cannot be tested on the ground of inefficient performance of the ED and other officers under PMLA.
Justices AM Khanwilkar and Dinesh Maheshwari pointed out, that the outcome of procedural actions taken by the concerned authorities does not make the provision irrelevant or unconstitutional. Moreover the bench observed that the statistics and figures lead nowhere as it will not be able to prove the validity of the Act.
“We will be going in reverse order. We cannot test validity of the provision on the basis of efficiency or inability of the officers in taking the prosecution to its logical end which is conviction. Unless you show us precedents that support the argument that figures will prove validity of the Act, it cannot be considered,”
-said Justice AM Khanwilkar.
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Further, Sr. Adv. Guruswamy argued in relation to Art. 21 and the concomitant due process and the manner in which it applies to the provisions of the PMLA. As under S.44 of the Act whereby the joint trial of the two offences have been prohibited, the Sr. Adv. submitted that such restrain compels the judicial mind to compart all necessary evidence and material facts relating to the two trials into separate universes, even though the rights and liabilities pertain to the same person/s. The ground reality is in a parallel trial the special court is compelled to include relevant evidence in one compartment and exclude it from another part, thereby splitting the same set of facts relating to the same party into separate categories.
The Court objected to this submission and observed that the judicial mind is well-trained to differentiate between relevant facts presented to it and how it applies to parties without being confused despite the duality of the procedures.
Further she stated that the Supreme Court in a host of judgements has laid down the necessary checks and balances so far as it applies to accountability of concerned agencies entrusted with penal procedures under various enactments. Reliance was made on the Apex Court’s 1998 judgment in Vineet Narain case, wherein the judicial journey of holding the concerned authorities liable and making them accountable had begun. Accountability and checks and balances in terms of functioning were upheld in this judgement. That was 25 years ago, and yet the Sr. Adv. submitted, the ED as it stands has unchecked powers so far as the ECIR is concerned and it remains unavailable to aggrieved parties and this present position is unsustainable and needs to be remedied.
Additionally, the attachment proceedings under contemporaneous legislations come into effect only post-conviction, in stark contrast with the attachment procedures under PMLA. Further, the Appellate Tribunal has not had a Chairperson since 2019 and its members have been consistently retiring out. Therefore, if initial orders need to be challenged by the accused, there exists no recourse available to him. Similar is the case with Adjudicating authorities. These institutional deficiencies need to be addressed and remedied.
Lastly, Sr. Adv. submitted that in light of the judgement in Gopalkrishnan vs. State of Kerala, 2020, wherein the Hon’ble Supreme Court has laid emphasis on the importance of Art. 21 and its constituent fair trial, the accused under this present Act in consideration, have the right to know about the allegations made against him in the ECIR, which is a necessary part of the accused’s right to a fair investigation and fair trial. Sr. Adv. Guruswamy cited the case of Mohammad Ajmal Kasab, which was arguably one of the worst of the worst instances and despite that the Court had protected the enforceability of the due process and in the greater scheme of things protected the constitutional morality and all of its constituent provisions.
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Submissions of Sr. Adv. Aabad Ponda
Before he began his submissions, Sr. Adv. Ponda apprised the Bench of the limited scope of his challenge to the PMLA, which he submitted would only deal with the vires of the provision contained in S.50 so far as it relates to compelling the accused to speak the truth, answer all questions posed by the ED and produce all documents that the ED deems necessary. Sr. Adv. Ponda admitted that he had no quarrel with the right of the ED to summon the accused in the light of Ramanlal Bogilal, which deals with the power of concerned authorities to summon the accused to appear before them as and when they deem necessary. The contention is that the person summoned must stand in the character of the accused by means of a FIR being launched in the predicate offence or a complaint being filed before the Magistrate so that he may direct the police personnel or other authority to take necessary action. This principle as was held in Kathi Kalu Oghad was relied on. However, since the PMLA necessitates a predicate offence, without a FIR in such offence, the accused cannot be compelled by the ED to make statements which could prove to be incriminating in nature. As set out in Ramanlal Bogilal, when a person appears before the ED, he can only be asked to answer non-incriminating statements.
Additionally, the accused cannot be compelled to produce incriminating documents that could then be used as evidentiary material against the person so summoned. Reliance was made on Shyamlal Prasad vs. State of Gujarat, Oghad and Toofan Singh to bolster his argument so far as it relates to production of incriminating material or making of incriminating statements when not done voluntarily by the accused.
The Court pointed out that the admissibility of evidence comes about at the stage of trial not before, in answer to which the Sr. Adv. submitted that S.50 (2) applies at the stage of investigation as well. The right to remain silent of the accused is taken away and he is compelled to answer questions and speak the truth on threat of penalty and imprisonment as under S.63, which stands in dissonance with constitutional protections. With that Sr. Adv. Ponda concluded his arguments for the day.
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Submissions of Sr. Advocate Siddharth Agarwal
It was submitted by the Sr. Adv. that the ED had contended the offence under PMLA is a continuous offence, whether that is in alignment with the construction of the Act or not needs to be considered. When an enactment is inspected on its prospective and retrospective application, it must be borne in mind that unless a contrary intention appears from the Act, there can be no retroactive application, it was submitted. Current laws ought to govern current activities and ought not to be adjusted retroactively so as to incriminate people for crimes which were not crimes when they were so done.
Prior to the enactment of the PMLA, the provision relating to proceeds of crime was contained in the Cr.PC which was included post an amendment in 1994. The PMLA when it was enacted had an analogous provision relating to proceeds of crime, but with subsequent amendments its scope had been widened to include all relatable activities connected with the scheduled offence. However, it was submitted that a charge under the PMLA can only be made out when there exists a predicate offence and any fruits of criminal activity will not fall within the purview of money laundering as under this present Act. Unlike other contemporaneous statutes, the PMLA does not draw a distinction between products of crime and proceeds of crime, it was submitted, which is a significant distinction and should necessarily be taken into consideration.
The matter would now be heard on February 22.