Supreme Court issues notice on four powers of Enforcement Directorate

Bench of Justices Sanjay Kishan Kaul, Ahsanuddin Amanullah and Aravind Kumar on Tuesday sought counter-affidavits from the Centre and the ED within six weeks

Supreme Court of India

R. Balaji   |   TT  |  New Delhi   |    29.03.23  : The Supreme Court on Tuesday issued notices to the Centre and the Enforcement Directorate on a petition challenging the unfettered powers the ED wields under the Prevention of Money Laundering Act for search, seizure, summons and arrest.

The petitioner — a seven-time Congress MLA from Madhya Pradesh and the leader of the Opposition in the state, Govind Singh — has argued that Sections 50 and 63 of the Act violate the fundamental rights of citizens and are being increasingly used against the government's critics. The petition urges the apex court to refer to a five-judge constitution bench the judgment passed last year that upheld the constitutional validity of the PMLA's grant of unbridled powers to the ED.

The bench of Justices Sanjay Kishan Kaul, Ahsanuddin Amanullah and Aravind Kumar on Tuesday sought counter-affidavits from the Centre and the ED within six weeks.

On July 27 last year, a three-judge bench of the top court had upheld the constitutionality of the PMLA clauses relating to the ED's overarching powers for “search, seizure, summoning and arrest” and to the stringent bail conditions. The court said it was necessary to curb heinous offences like terrorism and drug trafficking that were affecting the “social and economic fabric” of the country.

The judgment had drawn flak from both political and apolitical circles, coming as it did at a time when the Narendra Modi government was being accused of misusing the ED and the PMLA, particularly against Opposition politicians.

A review petition filed against the July 27 judgment is pending adjudication.

Singh, the Congress MP, has challenged Section 50 of the PMLA, which empowers the ED to summon an accused without disclosing the offence for which he or she is being prosecuted, and Section 63, which imposes a fine of up to Rs 10,000 for failing to tell the truth before the investigating officer of the agency. The petitioner said these sections violated Article 20(3) of the Constitution, which prohibits compulsion for self-incrimination by an accused.

Singh said he had been summoned to New Delhi by the ED, "asking the elected member... to leave his public duties" and granting him less than 72 hours to appear. He alleged that the ED failed to provide him with details of the alleged offence and investigation in "a blatant and gross abuse of the process of law".

"The powers under the PMLA are to be used for controlling the menace of money laundering and not to prevent public servants from fulfilling their duties or for the purpose of stifling the Opposition,” the petition, filed through advocate Sumeer Sodhi, stated.

The ED had summoned Singh on January 23 in connection with a PMLA-related offence that he alleged was the outcome of his criticism of the BJP government in Madhya Pradesh for its purported failures on the law-and-order front.

The petition has raised the following issues:

"A. The PMLA is essentially a criminal law, therefore, the persons investigating the commission of an offence under the same would essentially be police officers. Hence the proceedings under Section 50 of the PMLA should be considered as an investigation and the safeguards provided under the Code of Criminal Procedure (CrPC) and the Constitution of India should be made available to the person summoned under the PMLA.

"B. Section 65 of the PMLA makes the provisions of the Code of Criminal Procedure applicable to the PMLA, therefore the safeguards provided under the CrPC should be applicable to proceedings under the PMLA.

"C. Provisions of Section 50 of the PMLA are in direct contravention to the fundamental right against self-incrimination enshrined under Article 20(3) of the Constitution.

"D. The petitioner has not been supplied with a copy of the ECIR (enforcement case information report, equivalent to an FIR), nor have any details been provided to him, therefore the petitioner is completely unaware of the scope of investigations, or the allegations being investigated in relations to which he is being called upon by the ED.

"E. Singh is also unaware as regards the details of the scheduled/ predicate offences in furtherance of which the Directorate of Enforcement has initiated the proceedings under the PMLA.

"F. Every citizen has a right to challenge the initiation of any criminal proceedings against him/ her and hence not providing the petitioner with any details of the ECIR and/ or the predicate offence is an utter violation of the constitutional and statutory rights of the petitioner as it deprives him of his right to appropriately challenge any proceedings initiated against him.

"G. Without being aware of such details, it would not even be worthwhile for the petitioner to join the investigation. Non-disclosure of the ECIR or remit of the investigation by the ED would result in a roving and fishing inquiry which is impermissible in law.

"H. Not informing the person being summoned as to in which capacity he is being called is a violation of fundamental rights and the CrPC.

"I. Every criminal statute must satisfy the test of fair play. There is no procedure in criminal jurisprudence that allows for summoning a person without informing as to the capacity in which he/ she is being summoned.

"J. Legislature in its wisdom while enacting the Indian Evidence Act, 1873, and the Code of Criminal Procedure Code, 1973, incorporated safeguards to ensure that the statements made during the course of the investigation would not be an admissible piece of evidence in the trial of the case, whereas the said protection is not available under the provisions of the PMLA."

According to Singh, even the summons served on him was cryptic and vague. "The vagueness and arbitrariness of the summons is reflected from the fact that it does not even mention the date on which the ECIR came to be registered and further fails to provide any details of the alleged predicate offence whatsoever," he said.