PMLA Judgment On Possession Of Property Leaves Scope For Arbitrary Application: Supreme Court

The Supreme Court yesterday said its Judgement on the Enforcement Directorate's powers under the Prevention of Money Laundering Act to take possession of a property before trial in exceptional cases leaves scope for arbitrary application.

A Bench headed by Chief Justice N V Ramana said the ratio concerning Section 8(4) laid down by the PMLA judgement needs further explanation.

The Apex Court in its PMLA judgement delivered on July 27 had said that direction under Section 8(4) for taking possession of the property in question before a formal order of confiscation is passed should be an exception and not a rule.

Section 8(4) allows the ED to take possession of the attached property at the stage of confirmation of provisional attachment made by the adjudicating authority.

"In Vijay Madanlal Choudary & Ors v. Union of India, SLP (Civ.) No. 4634 of 2014 and others, this Court dealt with confiscation proceedings under Section 8 of the Prevention of Money Laundering Act, 2002 ("PMLA") and limited the application of Section 8(4) of PMLA concerning interim possession by authority before conclusion of final trial to exceptional cases", the Court noted.

"The court distinguished the earlier cases in view of the unique scheme under the impugned legislation therein. Having perused the said judgment, we are of the opinion that the aforesaid ratio requires further expounding in an appropriate case, without which, much scope is left for arbitrary application," the Bench, also comprising Justice Krishna Murari and Justice Hima Kohli, said.

The observations came in a judgement in which the Court held that Benami Transactions (Prohibition) Amendment Act, 2016, does not have retrospective application and the authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the legislation.

Incidentally, the plea for review of the PMLA judgment is listed today before a Bench headed by Chief Justice N. V. Ramana, also comprising of Justice Dinesh Maheshwari and Justice C. T. Ravi Kumar who were part of the Bench that delivered the PMLA Judgment.

Cause Title: Union of India & Anr. v. M/s. Ganpati Dealcom Pvt. Ltd. 

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