Why in the news?

The Supreme Court has postponed its review of the decision to uphold key provisions of the Prevention of Money Laundering Act, 2002 (PMLA) to August 28.

Prevention of Money Laundering Act, 2002 (PMLA)

• The Prevention of Money Laundering Act, 2002 (PMLA) is a crucial legislative framework in India aimed at combating money laundering and related financial crimes.
• The PMLA was enacted by the Parliament of India and came into force on July 1, 2005. It was introduced to prevent money laundering and provide for the confiscation of property derived from or involved in money laundering.

• The main objectives of the PMLA are:

• • To prevent and control money laundering.
  • To confiscate and seize property obtained from laundered money.
  • To address issues connected with money laundering in India.

What is the Case?

•  On July 27, 2022, the Supreme Court upheld key provisions of the Prevention of Money Laundering Act, 2002 (PMLA) in the case of “Vijay Madanlal Choudhary v. Union of India”.
  • The 540-page ruling accepted the government’s arguments on all challenged aspects, including reversing the presumption of innocence for bail, passing amendments as a Money Bill, and defining the Enforcement Directorate’s (ED) powers.
• On August 25, 2022, a different three-judge bench agreed to hear a review petition filed by Congress MP Karti Chidambaram. The petition raised concerns about at least two issues from the Madanlal decision.

What are the Grounds for Review?

• The Supreme Court’s verdict in Madanlal upheld stringent bail conditions for economic offences, imposing a reverse burden of proof on the accused.
• Petitioners argue that, without essential documents like an FIR, charge sheet, case diary, and prosecution documents, an accused cannot adequately present their case.
• The Madanlal verdict upheld Section 50 of the PMLA, allowing ED officials to record statements under oath, admissible in court. It distinguished ED officers from police officers, classifying their investigations as “inquiries.” Petitioners argue that the verdict overlooked provisions granting penal powers to the ED.

How is a Judgment Reviewed?

• The Supreme Court can review its judgments or orders under Article 137 of the Constitution.
• A review petition must be filed within 30 days of the judgment. Typically, review petitions are heard through written submissions (“circulation”) by the same judges who passed the original verdict, rather than in open court.
• Reviews are granted on narrow grounds to correct grave errors causing a miscarriage of justice. One common ground is “a mistake apparent on the face of the record,” which must be glaring and obvious, such as reliance on invalid case law.

Way forward: 

• Enhanced Transparency and Documentation: To address concerns about the adequacy of case presentation by the accused, there should be a mandate for providing all essential documents such as FIRs, charge sheets, case diaries, and prosecution documents to ensure a fair trial process.
• Clarification of ED’s Powers and Procedures: Amendments to the PMLA should clearly define the scope and limits of the Enforcement Directorate’s powers, ensuring that ED officers are given appropriate procedural guidelines and oversight mechanisms to prevent misuse of penal powers and uphold due process.

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