PMLA verdict: Retired SC judge L Nageswara Rao says he would have taken a different stance

Retired Supreme Court judge Justice L Nageswara Rao on Monday said that his stance on the Prevention of Money Laundering Act is different from the judges who approved amendments to the law that gives the Enforcement Directorate the unbridled power of summons, raids and arrests, reported Bar and Bench.

“At the outset, I should tell you that I am not critical of the judges who have written the judgment or the philosophy of the judgment,” Rao said. “I don’t want to go into whether it is wrong or right. Personally, I might have taken a different opinion if I was writing the judgment.”

Rao was speaking at an event organised by The Leaflet on “Life and Liberty: India at 75 years of Independence”.

A three-judge Supreme Court bench on July 27 had upheld the core amendments of the Prevention of Money Laundering Act. Over 200 petitions were filed against the amendments arguing that they violate personal liberty, procedures of law and the constitutional mandate.

On Monday, Rao said that the court has protected the liberty of citizens through some other Prevention of Money Laundering Act rulings, according to Bar and Bench.

He cited a comment made by Chief Justice NV Ramana in December about how citizens were unnecessarily being dragged into cases under the Act, adding that the “process itself is becoming punishment”.

“So while registering cases under PMLA, he sounded a note of caution that authorities have to be very careful of the consequences of a case being registered and a person not being able to get bail very easily,” Rao said.

The retired judge said that the courts are in favour of protecting the personal liberty of an individual.

“Trials take their own time and I have seen in my tenure of six years, a large number of cases where persons come to us even in offences where the sentence is less than seven years, after 4-5 years that charges are not framed, a trial will take a long time, still they are in jail,” he said. “Concept of liberty has definitely not changed and the court definitely is there to protect liberty.”

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‘We cannot lose hope in judiciary’

Rao disagreed with Rajya Sabha MP and senior advocate Kapil Sibal’s statement that he has “no hope left in the Supreme Court”, according to Bar and Bench.

Sibal had made the statement while criticising several recent judgements by the Supreme Court, including in the Zakia Jafri case as well as the Prevention of Money Laundering Act case.

Rao said that if the public loses confidence in the judiciary, the actions of the Executive branch of the government will go unchecked.

“Merely because of a few judgments which are not to the liking of certain persons, which they perceive that this might not be in consonance with Article 21 [right to life] and other fundamental rights, we cannot lose hope in an institution which has been protecting rights of the individuals for the last 75 years,” he added.

Important provisions upheld by SC in PMLA case

Besides the Enforcement Directorate’s power to arrest and seize properties, the court held in its order that Section 45 of the Prevention of Money Laundering Act was legal and not unreasonable. The provision makes offences under the law cognisable and non-bailable. It also states that when a bail plea is opposed, the court needs to be satisfied that the accused person is not guilty and will not commit any crime after release.

The judges also upheld Section 24 of the Act which states that an accused person has the burden to prove his innocence. This is contrary to established criminal law principles of innocent until proven guilty.

The court also said that an Enforcement Case Information Report, or ECIR, in money-laundering cases, cannot be equated with a first information report in other crimes. The judges held that it was not mandatory for the Enforcement Directorate to provide an ECIR to the accused person and that disclosing the reasons for arrest was enough.

The court also upheld Section 3 of the Act, which defines money laundering.

The court, however, did not pass any verdict about the amendments made through the Finance Act in Parliament. The court said that the matter needed to be decided by a seven-judge bench.

The petitioners challenging the amendments had submitted that the changes were brought through Money Bills that need to be passed only in the Lok Sabha, and not the Rajya Sabha.

They had argued that these amendments were improper since the law was outside the scope of Money Bills, which are meant to deal with subjects concerning financial matters such as government revenue and expenditure.