Vijay Madanlal Choudhary v.UOI Case

Vijay Madanlal Choudhary v.
Union of India1
The Honourable Supreme Court of India in this case upheld the constitutional
validity of the Prevention of Money Laundering Act 2002(PMLA Act). The judgment was
produced by Justice AM Khanwilkar, Dinesh Maheshwari, and C T Ravikumar. Various
provisions of the 2002 Act were challenged in court. The case basically challenged the
validity and essentiality of certain provisions of the PMLA Act such as sections
5,8(4),17,19,24, and 45, which gave authoritative powers to the enforcement directorate in
matters relating to investigation, inquiry, and arrest and whether the Officers of the
Enforcement Directorate have the same role as a police officer. After the Judgement, the ED
has been permitted to keep several obscene powers that they can use while conducting the
investigation.
The question that has been put before the court was whether the ED officers
have the same role as a police officers. The court upheld the constitutional validity of
section 50 of the PMLA Act thereby declaring that ED officers are not police. Any
confession made before a police officer is not admissible in court under the Criminal
Procedural code 1973 but officers of the Enforcement directorate can record statements that
can be used against the accused in proving the case under the 2002 act. Under the threat of
legal sanctions, the investigating officer can collect statements from the person and twist the
case. The purpose of the Act is to prevent money laundering and that is the reason why the
ED officers have been given the power to inquire, arrest and seize the property of the
accused2 but it can violate article 20(3) of the Constitution of India which provides the right
to the defendant against self-incrimination. The officers can even use force against the
accused to give statements and use them against them the same doesn’t happen in a criminal
case. Therefore, there is hardly any distinction between an ED officer and a Police officer.
One of the major issues brought before the court was whether an ECIR
(Enforcement Case Information Report) be given to the accused. The court held that an
ECIR cannot be equated with an FIR in criminal cases and it is to be considered an “internal
document” and there is no need to be given to the accused. 3The accused will not even be
knowing the reason why he is being investigated. It also violates the rights of an accused
under article 21 to get the First Information report i.e., to get information about the charges
The court said that revealing the basic grounds for arrest is sufficient to comply with article
22(1) of the Constitution of India. The court has taken only the narrow part of it rather than
taking it from a broader perspective which includes the rights of the accused. The
authorities can misuse the power under this provision and arrest persons without a warrant
or judicial permission. Under “search and seizure”, the officers can start an investigation
without the accused knowing what are the charges made against him. The lack of recording
in statements will allow ED to exercise their powers arbitrarily and misuse them to take
revenge. even without the proper registration of ECIR, the officers can arrest a person
which will create barriers for the accused while applying for bail under the PMLA Act
2002.
The other issue was regarding the conditions of bail under the PMLA Act
1 VIJAY MADANLAL CHOUDHARY & ORS. versus UNION OF INDIA & ORS. 2022 SCC OnLine SC 929
2 Ashish Tripathi, Deccan Herald, https://www.deccanherald.com/national/north-and-central/supreme-court-
upholds-eds-power-to-arrest-under-pmla-1130500.html
3 BW Legal world, http://bwlegalworld.businessworld.in/article/PMLA-Judgment-Powers-Of-Enforcement-
Directorate-Upheld/30-07-2022-439620/ [last visited Sep 28,2022]
2002. The twin condition for bail was upheld by the Supreme Court under the act. The
accused has to prove that he is not guilty i.e., the burden of proof lies on the accused and
convince the court that he or she will not commit any offense. Unlike criminal law, the
accused is not presumed to be innocent. The was also one issue that existed earlier as the
Supreme Court in its earlier judgment[Nikesh Tarachand v Union of India]declared this
provision as unconstitutional and parliament brought the amendment and put it under the
ambit of section 45 of the act. Without access to ECIR, it is difficult for the accused to
prove prime facie that he or she is innocent. The principle of considering a person innocent
until proven guilty is not applied under the PMLA Act which violated the basic human right
of an accused person. The court justified the reason for upholding the validity of section 19
of the act as something necessary to prevent “heinous crimes”. Even though the person
might be facing the threat of arrest, he cannot challenge the prosecution as there are no
recorded documents stating the offences.
The power of the ED to confiscate the property and continue its
attachment until the trial is over in a court is also demeaning the rights of an individual. The
wide powers enjoyed by the authorities under the PMLA Act 2002, violates the
constitutional protection of article 14, and 21. The statistics submitted in court show that out
of 5422 money laundering cases registered, only 23 people have been convicted4. The
judgment, instead of limiting or adding conditions to the excessive powers possessed by the
authorities, upheld those powers. One of the arguments raised against the ED in recent times
is its misuse of power. The ED is under the control of the Central Government and it can
also be a tool that can be used against people. There has been huge controversy around the
functioning of the authority. In my opinion, the judgment rather protects the powers of the
authorities under the act rather than limiting it in accordance with other major laws in the
country. Any investigation authority should also follow the Criminal Procedure Code,1973
and in my humble opinion the ED should also fall under the ambit of CrPC so that equality
will be maintained and personal liberty and privacy of the accused will also be protected.
4 THESTRAITSTIMES, https://www.straitstimes.com/asia/south-asia/govt-critics-fear-indias-revised-anti-
money-laundering-laws-may-be-used-against-them [last visited 28 Sep 2022]

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