The Supreme Court on Friday sought the Centre's response on a plea filed by a sitting MLA from Karnataka challenging the powers of the Enforcement Directorate (ED) to seize and retain property under the Prevention of Money Laundering Act (PMLA) without judicial scrutiny for 180 days.
A Bench of Justices PS Narasimha and AS Chandurkar issued notice on the plea on Friday, December 12 and tagged it with pending matters that question the constitutionality of the PMLA’s adjudication structure.Notably, one of the concerns flagged by the petitioner is that the Adjudicating Authority tasked with examining whether the ED's seizure of property is valid or not does not come from a judicial background.
During the hearing , Justice Narasimha observed that there appeared to be “a fault in the Act (PMLA)” and questioned how a non-judicial member could adjudicate complex matters involving property rights and constitutional safeguards.The Court has issued notice on all prayers made by the petitioner, including those challenging the structure of the Adjudicating Authority and the validity of Sections 20 and 21 of PMLA. It has directed that the matter be heard alongside the pending cases on the validity of Section 6 of the PMLA.
Senior Advocates Mukul Rohatgi and Ranjit Kumar appeared for the MLA and argued that the provisions of the law permit the ED to act without accountability, leading to a widespread abuse of power.The petitioner, who is a sitting legislator from Karnataka’s Chitradurga district, alleged that all his assets, including bank accounts, fixed deposits, jewellery, and vehicles, were seized or frozen by the ED without being given any reasons or an opportunity to challenge the action. He claimed that such sweeping powers allow the ED to operate unchecked for at least six months before any judicial scrutiny begins.
Rohatgi told the Court that the challenge was twofold - first, to Sections 20 and 21 of the PMLA that allow the ED to retain property and records for 180 days without furnishing reasons, and second, to the very composition of the PMLA Adjudicating Authority, which currently comprises a single member who is not from a judicial background.
He submitted that for the entire country, only one person - a cost accountant - is functioning as the Adjudicating Authority and that he has confirmed nearly 99 per cent of all attachments and retentions made by ED officers.These figures, he added, were drawn from the Enforcement Directorate’s own website, suggesting that the authority was functioning merely as an “approving body” without applying its mind.
According to the petition, this state of affairs violates the right to equality and personal liberty under Articles 14 and 21 of the Constitution. It has argued that the ED can seize, freeze, and retain property for up to 180 days without providing the affected person with any written “reasons to believe,” thereby preventing them from seeking legal redress during that crucial period.
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