PMLA and the Expanding Powers of the Enforcement Directorate
Introduction
The presumption of innocence is one of the pillars of criminal jurisprudence that requires that any suspected criminal must be innocent until a court of law of competence establishes a guilty verdict against them. Historically, the criminal law is based on the notion that penal punishment only comes after conviction. Nonetheless, with the introduction and the subsequent development of Prevention of Money Laundering Act, 2002 (PMLA), this conventional perception has been firmly questioned.
Under the PMLA, the competency of the Enforcement Directorate (ED) is to temporarily attach property that is claimed to be proceeds of crime despite the trial or conviction of the accused. This leads to a crucial legal/constitutional issue: Does pre-conviction property seizure infringe the presumption of innocence or is it a needed preventive action to curb the serious economic criminals?
Innocence in Criminal Law Presumption
Criminal justice systems in the globe are founded on the presumption of innocence. It puts the contradiction of proving guilt on the prosecution and safeguards the individual against arbitrary punishment. The presumption of innocence in India is not mentioned in the Constitution but the presumption has been applied to the Constitution being read between Article 21 and 21 guaranteeing the right to life and personal liberty.
The Supreme Court in a number of its verdicts has stated that a fair trial is a necessary element in Article 21. A fair trial involves not only fair play under the trial but also safeguarding against the unreasonable or vindictive action of the State prior to guilt being proven. Any law with harsh consequences on an accused before conviction ought then to meet the test of fairness, reasonableness and proportionality criterion.
Concept of Attachment of Property
Attachment of property is the legal procedure used to temporarily restrain the use, disposition or enjoyment of property by the State. Attachment, as compared to seizure, which entails physical possession of property, imposes a legal prohibition on the conduct of dealing with the property.
Attachment or confiscation of property in the normal criminal law setting is normally conjoined with conviction or substantial prima facie results in a court. The logic is not difficult to understand since property deprivation bears some grave impacts on livelihood, dignity, and economic security that must be enforced after judicial verdict of guilt.
Security of Property under the PMLA
The PMLA was passed in an aim to stop money laundering and seizure of property of a criminal nature. Section 5 of the PMLA authorizes the ED to give a provisional attachment to property in case of having a reason to believe that the property is of proceeds of crime and is likely to be covered or transferred.
This attachment may be prior to a complaint or trial being filed. The attachment provisional is then submitted to an Adjudicating Authority who may affirm the attachment after listening to the parties. The attachment is maintained once established, when pendency of trial is added, and it can be ultimately so established on conviction.
This framework is very much different, as compared to the normal criminal procedure and it puts extraordinary powers in the hands of the executive agency.
Authorities of the Enforcement Directorate
The Enforcement Directorate is given broad powers in the PMLA to search, seize, arrest, and attach property. The other observation in the Act is that it reverses burden of proof, in this case, the accused has to prove that the property attached is not the product of a crime.
The purpose of such provisions is that the legislature is interested in handling economic offences which are usually complex, transnational and hard to investigate. Yet, there has also been criticism of the disproportionate powers of these expansive powers and their misuse.
Courts of Law and Constitutional questions
Some of the provisions of PMLA that the Supreme Court has reviewed in terms of their constitutional validity are the pre- conviction attachment. Madhok v. Vijay Madanlal Choudhary. The Court (2022) justified the validity of the practice concerning the issue of money laundering that is severe and requires the preclusion of such behaviors to ensure the preservation of the financial system.
The Court held that the concept of attachment in PMLA is preventive and not injudicial as it aims at frustrating the dissipation of the illicit assets and not the punishment of the accused. Meanwhile, the Court did not deny that such powers should be limited to exercising them in a manner that is highly compliant with statutory safeguards.
Previously in Nikesh Tarachand Shah v. The Supreme Court (2017) had invalidated some of the stringent conditions on bail provided under the PMLA, suggesting that judges felt that the restriction on personal liberty was unreasonably high. This shows how the Court continues to struggle in the mediation between the interests of the State and the rights of individuals.
Prevention or Functions of Punishment?
The main dilemma of pre-conviction attachment is its practical implications. Although the process is legal, as it is called provisional and preventive, it can be very fierce. The cases take years to be tried and in effect the accused and his family are left without economic means even before guilt is proven.
In the eyes of the accused, the attachment is similar to conviction-less punishment, therefore watering down the presumption of innocence. In the eyes of the State, though, the inability to attach property at an early stage can enable offenders to hide or even dissipate illegal wealth, which is the point of the law.
This contradiction underscores the importance of a proportionality-related approach, in the situation when attachment is the last option, and it must be backed by the solid material evidence.
Influence on the Essential Rights
Pre-conviction attachment directly influences Article 300A that safeguard the right to property and indirectly affects Article 21 and specifically the right to livelihood and dignity. In spite of the fact that property is no longer a fundamental right, deprivation of property should still be supported by a fair, just, and reasonable procedure.
Overuse or robotic application of the attachment powers can jeopardize the constitutional assurances and trust of the justice system by the people.
Conclusion
The pre-convict attachment of the property as provided under the PMLA is a drastic change to the old criminal law precepts. Although the aim of money launder prevention and safeguarding the national economy is absolutely valid, they should not be achieved at the expense of undermining the presumption of innocence that forms the core of the criminal justice system.
Pre-conviction attachment might be reasonable to prevent, but it should be very carefully guarded, judicially reviewed, and disproportionately applied.
Contributed by:- Aradhya Akshat (Intern)