Thread by @LawBeatInd

#SupremeCourt continues hearing batch of Petitions challenging the provisions of Prevention of Money Laundering Act.
Senior Advocate Abhishek Manu Singhvi appearing for petitioners to continue arguments.
#PMLA
#MoneyLaundering

Singhvi referring to an old English law saying said, "I don't agree with this but just to give an idea, it's better to let go 99 guilty than to punish one innocent."

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#moneylaundering

However, the bench said, going by the analogy then the provision of arrest should also be unconstitutional, It is a procedure established by law.
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Here there is a closure of the door, this is the pernicious evil which your Lordships will allow under 21. Whereas, the substance of PMLA is to make impossible for the accused and the judge to give bail, which amounts to No Bail. It is closure of the door, Singhvi submitted.

Singhvi referring to the point of arrest and bail in the PMLA Cases submitted- We are complaining about overcrowded jails.
This is in use in large number of countries including USA, these people are kept at a place not in jail and this GPS anklet system is so effective.
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Singhvi- Milords in POCSO, there are two judgments which deals with strict acts like POCSO. Your Lordships will have to interpret Section 45. I very thankful for a patient hearing.
The heart of the matter depends on 45, reducing it to vanishing point.
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Singhvi concluded his arguments.

Senior Advocate Mukul Rohatgi started arguing- Milords I appear in some of the matter for the petitioners, my short point will be limited to the validity of explanation to section 44.
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Rohatgi- The explanation wrongly sits in section 44, I don't think it clarifies at all.
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Rohatgi- This is against section 3. Suppose I rob a bank and invest that money in a business and launder it, project it as a profit. I am a common accused there and here, then if I'm acquitted, I can not be convicted for money laundering.
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Rohatgi- If the accused is discharged or acquitted in the first offence then the essence of section 3 is gone.
This is an act to punish you for the money laundering.

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Justice Khanwilkar- Money laundering of proceeds of crime, therefore if you are acquitted in scheduled offence then there is no substance.

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Rohatgi submitted on a lighter side, I was in Government Law College, Mumbai in the year 1975 or 76 when the first demonetisation happened. It was then when some money was being changed.
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Rohatgi- You cannot file an Enforcement Case Information Report (ECIR) with a threat of getting arrested the next day, there cannot be a mechanical object of ECIR. So the point is what is the proper way to structure it.

Rohatgi- for example Smugglers and Foreign Exchange Manipulators Act (SAFEMA) is dependent upon conviction that if you are convicted under A offence then only SAFEMA comes in.

J Khanwilkar- So you are saying that PMLA cannot mechanically kick in as soon as the case is filed.

Rohatgi- Yes, there has to be some investigation, it cannot be like same day FIR is filed in predicate offence and the PMLA comes in.
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Rohatgi- There is a statement of Mr Chidambaram as the Finance Minister when #PMLA was introduced in 2012 when amendment was brought in, it postulates that there must be a predicate offence.

J Khanwilkar- We'll continue after lunch.
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Rohatgi continues arguing- this what Mr Chidambaram has to say that there must be a predicate offence, there must be a crime as defined under the schedule and money resulting from that offence.
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J Khanwilkar- This is in essence of Section 3

Rohatgi- Yes

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Rohatgi- They are jumping with the offence, when you have robbed a bank then we will file an ECIR for the purpose of PMLA.

What I'm arguing is that there must be some investigation before filing an ECIR, Rohatgi added.

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Rohatgi- What the ED is doing in every case is all the people who are accused in an offence are roped in the PMLA.

Rohatgi- Let's take an example of a movable property, I rob a bank and I buy jwellery without any bills, etc. It will have nothing to do with money laundering, it'll only be converting proceeds of crime from cash to jwellery.
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Rohatgi- The importance is of projection, its not of white into black or black into white, that is the act which has to be there.
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Justice Khanwilkar- Just give a thought to this, robbery is done and then he invest that money in jwellery, this itself is laundering. He converted the money in jwellery.

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Rohatgi- Forget the example of Jwellery, if I rob and keep the money. I tell them that it is the robbed money then what.

Justice Khanwilkar- Then PMLA will not come in, and it'll be tainted money.

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Rohatgi- I leave these thoughts to your Lordships because ultimately your Lordships will have to decide.

J Khanwilkar- Thank you.
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Rohatgi concluded his arguments.

Senior Advocate Vikram Chaudhri appearing for other petitioners- Milords I'm over the word "concealment", (referring to Judgment in the case of Nikesh Tarachand)

I would suppliment what Mr Rohatgi was saying, in Section 45(1)(ii) was declared unconstitutional whereas, the bare acts kept on publishing it, which is an editorial issue.
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Chaudhari- All parameters for bail will remain the same however, the twin test condition is not in existence and can never be revived.

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Chaudhari- There cannot be any other proceeds of crime other than the proceeds of crime of the predicate offence and I would follow Mr Rohatgi's argument in that aspect.
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Bench will continue hearing the matter tomorrow.

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