PMLA is oppressive, has no reasonable procedure: Kapil Sibal

Senior Advocate Kapil Sibal termed the Prevention of Money Laundering Act, 2002 (PMLA) oppressive and devoid of any due process of law guaranteed by Article 21.

Addressing the Sikkim Judicial Academy, Sibal urged the Supreme Court to uphold the provisions of the PMLA in Vijay Madanlal Choudhary vs. UOI and not listed in reviewing the petition for two years.

Sibal addressed the audience in the context of judicial precedents and the doctrine of stare decisis. He stated that precedents offer some stability and predictability but offer limited flexibility. In this context, he spoke about UPMK and its position.

He said: “What is a ‘procedure prescribed by law’?” Is the PMLA procedure prescribed by law? PMLA is a law and if you remember in the Menaka Gandhi judgment J Bhagwati said “the procedure must be reasonable, the substantive law must be reasonable”.”

Sibal tested certain provisions of the PMLA. For example, Section 45 of the PMLA. He said: “You have Section 45 of the PMLA, which says that anyone who is prosecuted under the PMLA, when his bail application is brought to court, the prosecution should be notified. If the court does not come to the conclusion that the person is not guilty of committing a crime, he I can’t on bail Look at the scenario: I am accused and arrested under ECIR which is registered by ED. Unlike the FIR, the ECIR is not in the public domain. So I don’t know why I was arrested. I’m being arrested and taken to a judge, I don’t know what the charges are against me. I go to the magistrate, there is a statement about the selection of a preventive measure by the prosecutor, which he hands over to the judge. I do not have access to the application for the selection of a preventive measure. I don’t know what the case is against me. Section 45 says that unless I can prove that I am not guilty of the crime, I cannot be released on bail.’

He added: “Where is it located? procedure to show that I am not guilty of the offense? I don’t know the charges, I don’t have a restraining order, I will get a restraining order the moment I can’t talk to a lawyer, I haven’t been given any grounds for arrest. Article 21 states that the procedure must be reasonable. But is this procedure reasonable? SC upheld this procedure, but is it a precedent? so Precedent in the context of the letter of the law. This letter of the law cannot be a precedent. The letter of the law tells you that you absolutely cannot get bail unless you are satisfied that you are not guilty of a crime.”

Referring to Section 19 of the PMLA, he said: “Interestingly, S.19 PMLA says that the authorities can arrest you if they have in their possession material that you are guilty of an offence. You see the abyss. The body that arrests me must have at its disposal the material that I am guilty. Then only they can arrest me. But the material, which says that I am guilty of a crime, is not provided to me. This material is sent in a sealed envelope to the judge.

Sibal said that law and justice are not the same and added that PMLA has nothing to do with justice. Because it was upheld by the Supreme Court, it is the law.

He then asked whether the law was procedurally justified.

Sibal said: “According to the CPC, the Supreme Court in various decisions followed the procedure established by law. In other words, when you have an FIR, within 24 hours you have to produce the accused before the Magistrate, which also applies to PMLA.. the Magistrate is remanded. I have been given the FIR, I have access to it as it is in the public domain due to the pronouncement of the judgment of the Supreme Court. Then there are procedures that say that after 14 days of arrest I should be summoned. According to the CPC, a diary is kept, in which everything that the investigative body does must be recorded. Which witness is questioned in S.`161, is recorded in the diary. After the investigation is completed, a closure report or final report is prepared, which is noted and communicated to the accused. This is a procedure that is not there in the PMLA.”

He also pointed out how wide discretionary powers are given to investigating authorities under the PMLA.

Sibal said: “Under the PMLA, suppose I have committed an offense set out in the Schedule to the PMLA. S. 420 (Fraud) is a scheduled offence. Suppose I cheated someone of 1 crore, if it was under IPC, PMLA would not apply. If he is acting under the PMLA, dual conditions apply. What does this lead to? I don’t need to tell you that when you grant that discretion.”

Sibal also questioned the substantive law under the PMLA. He cited the example of “proceeds of crime” and “money laundering” and how two different crimes were recognized as the same by the Supreme Court.

He said: “I have given you examples of 1 crore proceeds of crime. Proceeds of crime is a “predicate offense,” but there is a separate offense of money laundering. For example, if you have dirty clothes that you have washed. If you have dirty money and you put it into a legitimate system, it is called money laundering individual can be prosecuted for money laundering even if there is no evidence that he ever laundered money. Suppose I commit a crime of 10 thousand or 1 crore rupees and I keep that 1 crore in my house. I didn’t do anything about it. I’m the person who cheated, I kept it at home and it’s not right. I will still be prosecuted for money laundering.”

He added that when such laws are in place, the lower courts cannot do anything unless Constitutional Courts such as the High Courts and the Supreme Court challenge its constitutional validity.

Sibal said that as far as the Supreme Court is concerned, afterVijay Madanlal Choudhary, The court realized the absurdity with which people remained imprisoned under the PMLA. Thereafter, Pankaj Bansal the verdict provided some relief for them in the sense that the grounds for arrest must be given to the accused in writing, and another decision, in the face of lengthy imprisonment, the accused could be released on bail if he was not wanted by the investigating authorities.

Sibal added that in cases where he cannot strike down a law, he creates exceptions through the constitutional basis of Article 21 to find a way ordinary citizens get relief

He concluded by adding that the question of whether the PMLA could be amended money bill remains pending in the Supreme Court.