Chhattisgarh moved to the Supreme Court on Wednesday, challenging the constitutional validity of the 2002 Prevention of Money Laundering Act (PMLA). It pointed to the “unchecked” powers of the Enforcement Directorate (ED), which is “torturing, abusing and mistreating” officials. under the guise of conducting an investigation.
It has asked the Supreme Court to intervene using the powers granted to it by article 131 of the Constitution, which allows it to decide on interstate or central disputes.
Chhattisgarh has thus become the first state to challenge the Money Laundering Act and its provisions. Previously, individuals and parties have challenged the law on various grounds, but the validity of the law was upheld by a bench of three high court judges last year. The statement was mentioned by senior lawyer Mukul Rohatgi and lawyer Sumeer Sodhi, who appeared in Chhattisgarh.
The State has challenged the constitutionality of articles 17 (search and confiscation), 50 (which authorizes an official of the Enforcement Directorate to summon a person and take a statement), 63 (penalty for false information or omission of information), and 71 (the Act shall have supreme effect) of the PMLA, 2002.
He said that Section 50, read with Section 63 of the PMLA, violates an individual’s right against self-incrimination, since the ED has the power to require any person to record their statements under Section 50 and such person is obliged to declare the truth in the statement thus registered, otherwise they would be subject to the penal provisions set forth in article 63 of the Law.
The petition noted that the state is aware of the recent judgment of the SC in Vijay Madan Lal (Supra). He said the ruling requires reconsideration by a larger court given the fundamental issues of ED’s “unlimited” and “unbridled” powers violating the fundamental jurisprudence of criminal law and procedure.
The brief said that on multiple occasions, the ED acted beyond its powers in states that have an opposite political stance to the one in power at the Center. He said such conduct amounts to a gross misappropriation and arbitrary use of power, which goes against the constitutional mandate, especially when investigative agencies are expected to be fully independent and uninfluenced. The Bank said the matter would be brought to a hearing on May 4.
The State said that certain amendments to the provisions of the PMLA have been carried out through the Finance Acts of 2015, 2016, 2018 and 2019.
He also said that the amendments to the PMLA through the Finance Laws can be annulled as being colored uses of the legislative power, in violation of Article 110 (1) of the Constitution.
Chhattisgarh indicated that several complaints are being received on behalf of state government officials as well as state residents that ED is torturing, abusing and mistreating them under the pretext of conducting an inquiry/investigation.
Just a day earlier, India’s Attorney General Tushar Mehta told the court that the Act’s provisions met global standards set by the Financial Action Task Force (FATF) and are part of the intergovernmental response to organized crime. .
Separately, senior lawyer and MP Kapil Sibal told the high court on Monday that the July 2022 Supreme Court decision in Vijay Madanlal Choudhary needed a “review”.
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