Narrow View: The Hindu Editorial on the Supreme Court’s decision on the Prevention of Money Laundering Act

narrow view

Supreme Court’s decision upholding all the controversial provisions of Prevention of Money Laundering Act (PMLA) The review of legislative action falls short of judicial standards. Underlining every aspect of its analysis is a belief that India’s commitment to the international community to strengthen the domestic legal framework to combat money laundering is so violent that potential violations of fundamental rights may be underestimated. . The decision repeatedly invokes the “international commitment” behind the enactment of Parliament’s legislation to prevent the menace of laundering of proceeds of crime, which underscores, on financial systems and even the sovereignty of countries. There are international consequences such as adverse effects. There is no doubt that there is widespread international concern over the harmful effects of organized crime that fuels the international drug trade and terrorism. Most of these activities are funded by illicit money generated by crime, to appear legitimate and are funneled into the financial flows of global and domestic economies. In some circumstances a stringent framework may be justified with a suitable departure from the routine standards of criminal procedure. However, experience shows that money-laundering in the Indian context is associated or seen as a by-product of both serious and routine offenses that are included in the Act as a Schedule. These ‘scheduled’ or ‘predictable’ offenses should ideally be limited to serious offenses such as terrorism, drug trafficking, corruption and severe forms of taxes and duties. However, in practice, the list includes crimes such as fraud, forgery, fraud, kidnapping and even copyright and trademark infringement. The Enforcement Directorate has also been markedly selective in opening money-laundering investigations, making any citizen vulnerable to search, seizure and arrest at the behest of the executive.

It is disappointing that the court did not find a provision to compel a person called by the ED to disclose and submit the documents and then sign the same under the anguish of prosecution, as it violates the constitutional restriction on compulsion of testimonies. . Nor was it influenced by the contention that the provisions of search and seizure lack judicial oversight and are exclusively driven by ED officials. Provisions that allow prosecution for money-laundering even without establishing a scheduled offense and amendments removing the safeguards have been passed with the bench, on the grounds only that these have been reported by international assessors of the law’s efficacy. were to correct the shortcomings. Leaving aside an odd remark that the special court may examine documents to decide on continued custody, there is nothing in the judgment that would dilute the rigor of the law. It rejects the plea to treat the ED officers as police officers, thus protecting their admissibility of evidence. At a time when the ED is selectively targeting opponents of the regime, the verdict is sure to be remembered for its failure to protect individual liberty from executive excesses.