Former Finance and Home Minister P Chidambaram and Law Minister Kapil Sibal expressed their concerns about certain provisions of the Prevention of Money Laundering Act, 2002 (PMLA). The senior Supreme Court advocates and Congress leaders are advocating for a repeal or review of these provisions, particularly in light of the increased scrutiny by the Enforcement Directorate (ED) on money laundering offenses.
During their discussion, Chidambaram emphasized that the recent judgment upholding the provisions of the PMLA was “contrary to well-settled principles of law.” He asserted that the judgment should be reviewed, and the sooner it happens, the better. The comments seem to reflect a strategic move, considering the possibility of a return to power by the Modi government for a third term and the intensified focus on money laundering offenders by the ED.
The Prevention of Money Laundering Act, enacted in 2002, aims to combat money laundering and related offenses. The call for a review or repeal of specific provisions comes amid debates on the balance between stringent anti-money laundering measures and the protection of individuals’ legal rights.
Chidambaram and Sibal’s stance on the need for a reevaluation of the PMLA provisions underscores the ongoing legal and political discourse surrounding financial regulations and their implications for individuals facing or likely to face ED investigations in money laundering cases.
Senior Advocate P Chidambaram, in his conversation with Senior Advocate Kapil Sibal, said that the judgment upholding the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) was “contrary to the well-settled principles of law.” …
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Chidambaram highlighted the detrimental impact of the ED’s expanded powers on the rule of law, describing it as “completely destructive.” He urged the Supreme Court to recognize the gravity of the situation and expedite the hearing of review petitions to rectify the perceived flaws in the law. He emphasized the urgency of setting things right until a new government can repeal or amend the legislation.
Sibal echoed Chidambaram’s sentiments, proposing the immediate establishment of a five-judge bench to address PMLA matters and suggesting a temporary halt on proceedings related to the Act. He argued that the Court should prioritize resolving the issues surrounding the PMLA to prevent further damage and ensure the protection of legal rights.
This conversation comes in the wake of a previous judgment by a three-judge SC bench in July 2022, which upheld contested provisions of the PMLA related to arrest, attachment, and search and seizure powers granted to the ED. The decision reignited discussions on the balance between stringent anti-money laundering measures and individual rights.
Chidambaram asserted that the PMLA needed to be repealed to rectify the damage caused by its misuse. He proposed the establishment of a group of jurists and experts to draft a revised PMLA, emphasising the importance of reading and applying the law fairly, reasonably, and proportionally.
During the conversation, the advocates discussed the origins of the PMLA, primarily targeting money laundering related to drug, terrorist, and human trafficking activities. Sibal highlighted the unintended consequences of the Act, where individuals could be arrested and denied bail even in civil or criminal actions for cheating.
Chidambaram acknowledged a mistake in expanding the scheduled offences under the PMLA during his tenure as the Finance Minister in the UPA regime. He admitted that the amendment, aimed at combating money laundering, was not intended to be misused as it is today.
Both advocates expressed dissatisfaction with the current state of the PMLA, drawing parallels with the draconian nature of the Prevention of Terrorism Act, 2002 (POTA), suggesting that such laws impact the entire structure of government in the country.
The conversation hinted at the personal stakes involved for the advocates, especially in cases where Sibal is representing individuals facing PMLA charges. Notably, Chidambaram’s son, Karti Chidambaram, is under investigation by the CBI and ED for alleged money laundering in connection with arranging ‘project visas’ for Chinese nationals.
Chidambaram and Sibal expressed skepticism about the timing of any potential judgment in favor of the petitioners, given the upcoming Lok Sabha elections. They argued that even if the matter were decided in favor of the petitioners, the damage caused by the misuse of the PMLA had already occurred.
While advocating for a review of the PMLA provisions, Chidambaram and Sibal revealed a deeper concern for the potential consequences of the Act on individual rights, emphasizing the need for a fair and balanced legal framework to combat money laundering without compromising the rule of law.