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As PMLA Gives Unbridled Powers To ED, SC Verdict May Have Facilitated A State Within State

Enforcement Directorate (File Photo)

Through its judgment in the clutch of petitions challenging the constitutional validity of several provisions of the Prevention of Money Laundering Act (PMLA), 2002, many of which are a legacy of the Congress-led UPA government, the Supreme Court may have reinforced the ability of the Enforcement Directorate (ED) to strengthen its position as a state within the state.

From comparing the CBI to a “caged parrot” in 2013, the court has now effectively ensured that another similar agency – the ED – will have no constitutional shackles to worry about when it comes to doing its political masters’ bidding.

How else does one explain the Supreme Court’s stamp of approval for every legally suspected power that the ED has been bestowed with in the last a decade or so?

Here’s what the three-judge Bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar has upheld as being constitutional: The ED can proceed and conduct an inquiry against any person after registering an Enforcement Case Investigation Report (ECIR) and seek information from him or her without informing him or her about the case that the agency was building against him; under the PMLA’s provisions upheld by the bench, the individual would have no right against being forced to incriminate himself or herself; the twin, and highly questionable, conditions for grant of bail which exist in the PMLA have now been allowed to continue.

More than anything else in the 545-poage judgment, it is the Supreme Court’s seal of approval to PMLA bail provisions, which places the burden of proving his or her innocence at the stage of securing bail on the accused and not on the prosecution, may be the more problematic part. Courtesy the judgment, getting bail for an offence under the PMLA, already a near-impossible ask, will now become an impossibility.

While doing so, the three judges, one of who – Justice Khanwilkar – is retiring soon and is also the author of yesterday’s judgment, also effectively undid the effect of the Supreme Court judgment of 2017 in Nikesh Tarachand Shah versus Union Of India, where the bench headed by Justice R F Nariman had struck down the burden of proving innocence in a bail application as unconstitutional.

Not limiting itself to upholding the controversial sections of the law, the bench went a step ahead, unilaterally amending the law to expand the scope of Section 3 of PMLA.

As explained in this excellent piece by senior Supreme Court lawyer and former additional solicitor general Bishwajit Bhattacharyya, the bench has now replaced the word ‘and’ with ‘OR‘ in Section 3 of the the legislation to achieve the purpose.

Another worrisome clause that the court has declared constitutional is the one that says that ED officers aren’t “police” officers, thereby ensuring that any statement that an accused makes before them can be used against that accused.

Now that the Supreme Court’s three-judge bench had delivered its verdict, the focus would be now on the Constitution bench which has to decide if the money bill route that the NDA government took to usher in a lot of these changes was constitutionally permissible. While, ideally, the Constitution bench should decide this issue at the earliest, going by the top court’s track record, it may be years before the bench gets down to actually deciding it.

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