What went wrong in the Supreme Court’s recent decision concerning the Prevention of Money Laundering Act, 2002? Was it a faulty interpretation of the provisions of the Act? A misplaced application of precedent? A general lack of clarity concerning the principles at play? Shivani Misra of Project 39A speaks to Senior Advocate Aman Lekhi on what the Supreme Court could have done differently while balancing the rights of the individual against the State’s power.
The judgment of the Supreme Court, while upholding the constitutional validity of the PMLA, has proven to be controversial in many aspects. In this conversation, Mr. Lekhi alludes to the various lacunae in the judgment. He demonstrates how in construing the meaning of “money laundering” the rules of interpretation were not properly followed and the scope of the provision was widened. He states that Explanation to Section 3 of the PMLA added in 2019 is contrary to the substantive portion of the provision as it completely alters what the provision mandates.
While stating that reverse burden clauses are not per se unconstitutional, Mr. Lekhi argues that the Court should have explicitly clarified that the legal burden would not shift to the accused. In the context of the PMLA, the Court should have examined the nature of the burden, checked whether the accused can discharge such a burden and whether it is a proportionate interference to the rights of the accused. Mr. Lekhi also speaks about the twin conditions of bail and also provisions of search under the PMLA.
His overall argument is that a statute does not have isolated silos. While dealing with the vires of a statute it is obligatory on the Court to see the consequence of the interpretation of specific sections on other provisions. For this, and more, please listen to our podcast!
Note: The following are the relevant sections and case laws referred to in the podcast
Sections
– Section 3 – Offence of money laundering
– Section 19 – Power to arrest
– Section 24 – Burden of proof
– Section 45 – Offence to be cognisable and non-bailable
– Section 50 – Powers of authorities regarding summons, production of documents and to give evidence
Judgments referred
- Sanjay Dutt v. State through C.B.I., Bombay (1994) 6 SCC 86
- Nikesh Tarachand Shah v. Union of India (2018) 11 SCC 1
- Tofan Singh v. State of Tamil Nadu 2020 SCC OnLine SC 882
- Barkat Ram v. State of Punjab (1962) 3 SCR 338
- Balkishan A Devidayal v. State of Maharashtra (1980) 4 SCC 600
