The Supreme Court on Monday agreed to hear a petition seeking the review of the verdict upholding amendments to the Prevention of Money Laundering Act that gives the Enforcement Directorate unbridled power of summons, raids and arrests, reported Bar and Bench.
A three-judge Supreme Court bench had passed the verdict on July 27. Over 200 petitions were filed against the amendments arguing that they violate personal liberty, procedures of law and the constitutional mandate.
In its order, the court held 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 these 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.
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Explainer: How the Supreme Court has handed a free pass to the Enforcement Directorate
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