SC investigates allegations into prevention of money laundering act

The Supreme Court is hearing back-to-back petitions filed by people from across the country, over allegations that an act introduced to prevent money laundering is being used as a weapon against rivals.

The petitions are being heard by a three bench judge of the high court led by Justice A.M. Khanwilkar where people in their complaints have alleged that the Bharatiya Janata Party ruled government and the Enforcement Directorates (ED) have been manipulating the act to their benefit.

Independent Journalist Rana Ayyub has also been accused under the PMLA and the matter remains unresolved. She has been accused of money laundering, in defense of which, she has publicly declared her account.

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Senior advocates, including Kapil Sibal, representing the petitioners alleged that the PMLA is being dragged into the investigation of even an ordinary crime.

The accusation against the Act is that the ED has the right to walk into anybody’s house and the fundamental purpose of the act to investigate illegal money was lost.

Sibal reminded the court that the PMLA was brought into working to combat excessive money laundering that stemmed primarily from the trade of narcotics. He said that instead rights were “cribbed, cabined and confined”.

Criticism against PMLA:

The Hindu quoted Sibal arguing, “PMLA was a comprehensive penal statute to counter the threat of money laundering, specifically stemming from trade in narcotics. Currently, the offenses in the schedule of the Act are extremely over-broad, and in several cases, have absolutely no relation to either narcotics or organised crime,”.

The accused is also not given a copy of the Enforcement Case Information Report (ECIR) which is equivalent to an FIR citing that it is an “internal document”.

Following the ECIR, the accused is summoned and asked to reveal details of all their financial transactions and of their family members and make statements, which are admissible as evidence.

“Throughout this procedure, the accused does not even know the allegation against him, as the only document which contains the allegation is the ECIR, which is not supplied to the accused persons,” Mr. Sibal pointed out.

The court is also examining submissions that PMLA does not distinguish between an accused and a witness while summoning them.

The petitioners pointed put towards the lack of clarity about ED’s selection of cases to investigate. They also submitted that the process must not be “arbitrary, vague and fanciful”.

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