Supreme Court Reconstitutes Bench to Hear PMLA Review Petitions Challenging Vijay Madanlal Choudhary Judgment

In a crucial development related to India’s anti-money laundering regime, the Supreme Court of India has reconstituted the bench to hear review petitions against the landmark judgment in Vijay Madanlal Choudhary v. Union of India, which had upheld several controversial provisions of the Prevention of Money Laundering Act, 2002 (PMLA). The newly reconstituted bench, comprising Justice Surya Kant, Justice Ujjal Bhuyan, and Justice N Kotiswar Singh, is set to hear the matter on May 7, 2025 at 2:00 PM.

Background: The Controversial VMC Judgment

The Vijay Madanlal Choudhary (VMC) judgment, delivered on July 27, 2022, by a bench comprising Justices AM Khanwilkar, Dinesh Maheshwari, and CT Ravikumar, upheld the constitutional validity of several core provisions of the PMLA. The judgment drew significant criticism from legal scholars, civil liberties activists, and the opposition, who argued that it diluted key procedural protections for the accused.

The following key provisions were upheld:

1. Section 5, 8(4), 15, 17 and 19 – These sections empower the Enforcement Directorate (ED) with sweeping powers of search, seizure, arrest, and attachment without adhering to traditional safeguards found in the Code of Criminal Procedure (CrPC).
2. Section 24 – This provision enforces a reverse burden of proof, requiring the accused to prove that they are not guilty of money laundering. The Court justified this by noting that the reverse burden had a “reasonable nexus” with the object of the Act.
3. Section 45 – This section reintroduced the twin conditions for bail, requiring that the court be satisfied that the accused is not guilty and not likely to commit an offence while on bail. The 2018 amendment restoring these conditions was upheld, despite their earlier invalidation in Nikesh Tarachand Shah v. Union of India.

Why the Judgment Was Challenged

Following the VMC verdict, as many as eight review petitions were filed challenging the ruling. These petitions raised serious concerns about:

• The lack of procedural safeguards for those accused under PMLA;
• The non-disclosure of the Enforcement Case Information Report (ECIR), which is equivalent to an FIR in money laundering cases;
• The reversal of the presumption of innocence, which runs contrary to fundamental criminal law principles;
• The unchecked powers granted to the ED, which some argued led to arbitrariness and misuse of the law for political vendetta.

Review Petitions and Procedural History

Initially, a bench comprising Justice Surya Kant, Justice CT Ravikumar, and Justice Ujjal Bhuyan was assigned to hear the review petitions. However, with Justice Ravikumar’s retirement, the bench required reconstitution.

Now, Justice N Kotiswar Singh has joined Justices Kant and Bhuyan on the reconstituted bench. The matter has been pending since August 25, 2022, when a bench led by then CJI NV Ramana had issued notice in the review petitions and expressed concern that two conclusions in the VMC ruling required reconsideration:

1. The Court’s holding that the ECIR need not be furnished to the accused;
2. The upholding of Section 24, which places a reverse burden of proof on the accused.

Notably, the Court also allowed the request for an open court hearing, a significant step given that review petitions are usually heard in-chamber.

Case Details

• Case Title: Karti P. Chidambaram v. The Directorate of Enforcement
• Review Petition (Criminal) No. 219/2022 and connected matters
• Next Date of Hearing: May 7, 2025
• Time: 02:00 PM

Senior advocates representing the petitioners include Kapil Sibal, Abhishek Manu Singhvi, and Arvind Datar, while the Solicitor General Tushar Mehta is expected to appear for the Union of India and the Enforcement Directorate.

Legal Significance of the Review

The PMLA, especially after the VMC verdict, has come under intense scrutiny. Critics argue that the Act, as interpreted in VMC, allows the ED to act with virtual impunity and strips accused persons of vital protections guaranteed under Article 21 of the Constitution.

Some of the broader implications of the VMC ruling include:

• Lower thresholds for arrest and detention: With Section 19 upheld, ED officers can arrest without needing to show “reasons to believe” before a judicial magistrate.
• Denial of ECIR: Accused persons may not even know the allegations against them, making it difficult to prepare a defense.
• Bail hurdles: Section 45’s twin conditions create a nearly impossible burden for securing bail in PMLA cases.

The reconstitution of the bench marks a turning point. With new judicial minds on the bench, including Justice Kotiswar Singh, the review petitioners are hopeful that the Court may recalibrate its position, especially on issues that strike at the heart of fair trial guarantees and procedural due process.

Looking Ahead

The May 7 hearing could be pivotal. While review petitions have a high threshold for success, the Court’s own oral observations and willingness to conduct an open court hearing indicate that there is judicial recognition of the concerns raised.

The outcome of this review has the potential to reshape how money laundering laws are implemented and interpreted in India. It will also test the Supreme Court’s willingness to revisit constitutional interpretations that may have had unintended consequences on civil liberties.

The review comes at a time when ED actions are frequently in the spotlight, with allegations of selective targeting and politicization. Any dilution or rollback of the VMC ruling could affect ongoing PMLA investigations involving high-profile individuals, including politicians, businesspersons, and public servants.

Conclusion

The Supreme Court’s decision to reconstitute the bench and list the PMLA review petitions for hearing on May 7 is a significant development in India’s constitutional and criminal law landscape. With serious concerns over the expansive powers of the Enforcement Directorate, the lack of transparency in ECIR disclosures, and the presumption of guilt over innocence, the review holds high stakes not just for the petitioners, but for the rule of law in India.

As legal experts and civil rights advocates await the hearing, all eyes will be on the Supreme Court to see whether it will revisit and possibly recalibrate the balance between the fight against money laundering and the protection of individual rights under the Constitution.

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