Vijay Madanlal & Ors v. Union of India & Ors

FACTS

• Vijay Madanlal (petitioner) argued that the Enforcement Department's registration procedure for the Enforcement Case Information Report (ECIR) is opaque, arbitrary, and violates an accused's constitutional rights.

• His counsel argued that the PMLA procedure is draconian, violating the fundamental tenets of the criminal justice system and the rights enshrined in Part III of the Indian Constitution, specifically Articles 14, 20, and 21.

• The current batch of petitions/appeals/cases addresses the validity and interpretation of certain provisions of the Prevention of Money-Laundering Act, 2002 and the Enforcement Directorate's procedure in investigating offences under the PMLA.

• The Parliament amended Section 45 of the 2002 Act in Nikesh Tarachand Shah vs. Union of India & Anr. (2018) 11 SCC 1, removing a defect and restoring twin conditions to offences under the Act. This amendment was challenged by various High Courts, including this Court, through writ petitions.

• In some cases, the efficacy of amended Section 45 was questioned and answered by the concerned High Court. These decisions are now part of this batch of cases. Separate writ petitions have been filed to challenge several other provisions of the 2002 Act, which have been tagged and heard together due to overlapping issues raised by the parties.

ISSUES

1. Whether the offence under Section 3 is a standalone offence?

2. Whether it is necessary to furnish a copy of ECIR to the person concerned apprehending arrest or at least after his arrest?

JUDGEMENT

• The apex court ruled that a person arrested for money-laundering is informed about the arrest grounds and can be called upon by the Special Court to provide relevant records about the accused's case.

• The court can then determine the need for continued detention.

• The argument under consideration does not proceed further.

OBSERVATION

• It had been stated that the principal sources of illegal proceeds are collar crimes (tax, fraud, corporate crimes, embezzlement and intellectual property crimes), drug related crimes and smuggling of goods, evasion of excise duties, corruption and bribery (and the embezzlement of public funds).

• The court Suffice it to observe that ECIR cannot be equated with an FIR which is mandatorily required to be recorded and supplied to the accused as per the provisions of 1973 Code.

• Revealing a copy of an ECIR, if made mandatory, may defeat the purpose sought to be achieved by the 2002 Act including frustrating the attachment of property (proceeds of crime).

• Non-supply of ECIR, which is essentially an internal document of ED, cannot be cited as violation of constitutional right.