It appears that the Indian courts have finally woken up to the gross abuse of the Prevention of Money Laundering Act, 2002 (PMLA), by the Enforcement Directorate (ED) by invoking its stringent provisions against people who are often political opponents of the ruling dispensation.
In a significant order, the Supreme Court on Wednesday held that the Central investigating agency can invoke the PMLA against an offence of criminal conspiracy punishable under Section 120-B of the Indian Penal Code only if the conspiracy is directed towards committing an offence specifically included in the schedule of the PMLA. A day earlier, the Madras high court stayed a summons issue to five district collectors in Tamil Nadu asking them to appear in person and furnish details of sand-mining in their districts.
The Supreme Court’s order in effect stops the agency from invoking any alleged criminal activity as a scheduled offence and proceeding against the accused under PMLA. The ED, the agency specialised to dig out the proceeds of crime, can rush in only when there is a plot that involves proceeds of a crime prosecutable under PMLA.
Yet more significant is the ruling of the Madras high court which, in an interim order, told the agency that it cannot go on a fishing expedition to identify possible offences under PMLA. It needs a predicate offence, normally being investigated by other agencies but involves the laundering of money, for the ED to start its investigation.
The long and short of the judgments is that the agency must stop masquerading as one empowered to investigate allegations of corruption. There are the Central Bureau of Investigation (CBI) , the Central Vigilance Commission and the anti-corruption bureaus in states to investigate such cases; and the ED’s service will be called in to discover the proceeds of such crime that the alleged offenders would have concealed. In the normal course, the orders of the constitutional courts will resonate in the higher echelons of the agency concerned. One can only hope that the ED — which has, of late, been bent on casting its net wide in states not ruled by the BJP — is paying attention.
