At least 17 opposition parties have described as “dangerous” the recent Supreme Court ruling, which upheld amendments to the 2019 Anti-Money Laundering Act (PMLA) and gave agencies like the Enforcement Directorate (ED) more powers.
“We hope that the dangerous verdict will be short-lived and that constitutional provisions will soon prevail,” read the statement, which was signed by representatives of Congress, Trinamool Congress, DMK, Aam Aadmi Party, CPI( M), the Samajwadi Party and the RJD, among others.
The Supreme Court on July 27 upheld the validity of a wide range of powers granted to the ED under the amended law, which had been challenged by nearly 250 petitions. The court rejected key arguments that arrest powers and an ambiguous definition of “proceeds of crime” could be misused.
17 opposition parties, including TMC and AAP, as well as an independent MP from Rajya Sabha, have signed a joint statement expressing deep concern at the long-term implications of the recent Supreme Court ruling upholding changes to PMLA 2002 , and requested a review. The statement: pic.twitter.com/vmhtxRHAnl
— Jairam Ramesh (@Jairam_Ramesh) August 3, 2022
Some opposition parties have already announced – amid allegations of political vengeance through abuse of the law – that they will go back to the Supreme Court to seek a review. They also cite that there have been very few convictions under the law.
In the past eight years of the Narendra Modi government, ED crackdowns have increased 26-fold compared to the previous government, but the conviction rate is extremely low. Only 23 defendants were convicted in 3,010 money laundering-related searches, according to data shared by the Ministry of Finance in the Rajya Sabha. 112 of those searches resulted in no money laundering convictions.
Allegations of vendetta echoed recently when the Gandhis of Congress were questioned by the ED in a case involving the publication of the National Herald.
Furthermore, the opposition has questioned the way in which these amendments were pushed through in Parliament – and this question is already before the Supreme Court. The statement noted that these were passed under the Finance Act introduced as the “bank note”.
The Money Bill route meant the new regulations only needed an okay from the Lok Sabha before being sent to the President for a final nod. It could not be rejected by the Rajya Sabha, the upper house, where the government lacked the numbers for sure approval.
“If the Supreme Court finds tomorrow that the contested changes made by the Finance Act are unlawful,” the opposition statement said, “then the entire exercise would be futile and a loss of court time.”
The opposition’s larger argument is that a money law should essentially deal with appropriation of funds from the consolidated fund and taxation and cannot be used to legislate on other matters.
“We hold and will always respect our Supreme Court with the utmost respect. Still, we have to point out that the verdict should have awaited the verdict of a larger chamber to consider the constitutionality of the finance law’s way of making changes,” it added.
“These far-reaching changes strengthened the hands of a government that was giving in to political vendetta of the worst kind,” it said. “We are also deeply disappointed that the highest judicial authority … virtually reproduced executive branch arguments in support of draconian changes.”
However, in delivering its verdict last week, the court said: “Money laundering not only affects the social and economic fabric of the nation, but also tends to encourage other heinous crimes such as terrorism, (narcotics-related) crimes.”
It rejected the argument that powers of arrest without informing the accused through a copy of the case report were unconstitutional. The court said providing ECIR (Enforcement Case Information Report) is not mandatory in every case as it is an internal document. it rejected the petitioners’ objection that it was similar to an FIR and that the defendant was entitled to a copy. The court said it was sufficient for the ED to tell the defendant the reasons for the action at the time of arrest.
The petitioners had also challenged placing the burden of proof on the accused, arguing that this violated fundamental rights. But the court disagreed. The central government had said that the burden of proof on the accused was justified because money laundering offenses are serious and there is a societal need to curb them.
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