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‘Essence of Tyranny is Harsh Laws Used Selectively Against Opponents’—Sanjay Hegde

Senior advocate Sanjay Hegde discusses the recent Supreme Court verdict on the Prevention of Money Laundering Act (PMLA), 2002.

Rashme Sehgal 11 Aug 2022

Sanjay hegde
Senior advocate Sanjay Hegde |  Image Courtesy: The Print

The Supreme Court’s recent judgement upholding the amendments made in 2019 to the Prevention of Money Laundering Act, 2002, has created a stir. Several Opposition parties have been saying the Enforcement Directorate, implementing authority for this legislation, targets their leaders and parties. Senior Advocate Sanjay Hegde talks to Rashme Sehgal about why the process in PMLA cases itself becomes a tool for harassment and why convictions are bound to remain insignificant in such circumstances. Edited excerpts.

Opposition parties have dubbed as ‘dangerous’ the recent Supreme Court judgment upholding amendments made in 2019 to the Prevention of Money Laundering Act, 2002. What did you think of this?

It is good that political parties have woken up to the dangers of this law, but they should have been more alert at the stage of legislating in Parliament. There was not too much discussion when it was passed in the Lok Sabha, and the question of passing it as a Money Bill to avoid the Rajya Sabha is still to be adjudicated. Parliamentarians cannot always expect courts to repair their shoddy work.

Over 250 petitions had challenged the 2019 amendments, and many people find them draconian—would you agree?

There were a number of petitions in court, including pleas from politicians, but the court does not interfere with laws simply because they are ‘draconian’. Judicial review is more concerned with the process and not the ‘product’. Legislation is normally checked for power, that is, legislative competence, and for possible violation of fundamental rights. It is apparent that the process argument has been kept for a larger bench, and the questions of fundamental rights have been answered by upholding the doctrine of executive necessity.

The Supreme Court ruling essentially means the Enforcement Directorate can arrest without providing the accused with a copy of its Enforcement Case Information Report or ECIR, which would be seen as an ‘internal document’. The concern with this aspect is that it is unconstitutional. Would you agree?

This judgment holds it to be constitutional [not to give a copy of ECIR], but I do think that on this aspect, the court itself will have to reconsider some day in the future.

Some say the PMLA provisions upheld by the court will deny bail to an accused, who faces the double burden of having to prove his innocence. Does this make bail next to impossible?

These are the provisions of the PMLA upheld by the court. The same judge, Justice AM Khanwilkar, now retired, upheld similar provisions in the Unlawful Activities (Prevention) Act (UAPA), and he was being consistent. The UAPA judgment has been watered down by other judgments, and I expect a similar process with the PMLA judgment.

Is the ED indeed empowered to seize all properties of the accused?

Yes, that is the provision of the law wherein properties can be attached. They can then be sold off if the prosecution ends in a conviction. However, very few cases end in a conviction, and the process of attachment and inquiry itself becomes the punishment.

Opposition parties have accused the government of misusing the Enforcement Directorate to pursue vendettas against political opponents. They cite several opposition politicians who, once they switched sides, found Enforcement Directorate went silent on their alleged misdeeds. What do you think?

There appears to be substance in that statement. The examples are widely known, and the Enforcement Directorate as a weapon of political compliance is a tool often resorted to. Of course it is being used against politicians. Take the case of Nawab Malik, the Nationalist Congress Party (NCP) minister presently in jail. His was a two-decades-old complaint whom Enforcement Directorate went after now. The agency swung into action against him, arrested him, and attached his property. If it fails to prove the charges against him, the property goes free. The Enforcement Directorate process is a tool for detention and harassment and is not focused on conviction.

During the last eight years, Enforcement Directorate raids have gone up 26 times, and it conducted 3,010 money-laundering searches but secured only 23 convictions. Why do you think this discrepancy exists?

The Schedule of the PMLA has been drawn so broadly that all kinds of offences come within its purview. Even an ordinary fight leading to the filing of an attempt to murder case can see the Enforcement Directorate at your doorstep. Hence, over-broad legislation will naturally see a low conviction rate.

Do not forget that the PMLA was originally designed for [tackling] drug money and arms money. But the government has put all kinds of criminality within its ambit, including even an attempt to murder. When ordinary Indian Penal Code offences are brought in, and these cannot be proved, it will bring down the entire edifice [of the PMLA] and allow it to fall.

But what could be the reason to all allow this situation to arise?

The PMLA can be traced in the United States to the prohibition era, where the Mafia earned a lot of money from bootlegging and then set up laundry services where this cash could be recycled. Essentially, illegitimate money from drugs and terrorism was legitimised. But now, any money from all kinds of crimes and belonging to criminals has been brought under its purview. Following a catch-all principle is one of the main reasons for the low conviction rate, whereas what the Enforcement Directorate needed to do was more focused investigations.

Can you explain why the Enforcement Directorate is in action, not the local police or the Central Bureau of Investigation (CBI)?

In West Bengal (where the Enforcement Directorate has raided Trinamool Congress leader Partha Chatterjee), the state government did not allow the CBI to function. The CBI cannot take over a case unless it has permission from the state government. But they were being denied permission on a blanket basis. Wherever a state government is in Opposition [hands], the CBI was being denied permission on a blanket basis which is why the Enforcement Directorate was then brought in.

Nevertheless, the Opposition accuses the government of conducting a political vendetta.

That is correct, but all these raids and arrests provide very good political optics for the ruling party. Take the example of how [Congress leaders] Sonia Gandhi and Rahul Gandhi have been summoned for questioning but not arrested. All the publicity around this serves a political purpose. The government gets the political dividends. One thing Indians understand and get enraged by is when others make money through illegal means. I believe the essence of tyranny is when harsh laws are used selectively against opponents. The converse is to turn opponents into supporters by the use of threats.

And the Opposition plans to move a review petition against the verdict that has upheld the 2019 amendment.

Yes, but it will go to a chamber of the same judges who cleared it [the amendments]. One judge has retired, but it will go to the two other judges on that bench. The ground of review will not be that the judgment was horribly wrong. It will be a review on very narrow grounds. [For example,] particular missed out material is now being shown to the judges [which] was not shown earlier for very valid reasons. Normally, all reviews get discussed without even an oral hearing. It is when subsequent judges doubt the decision by the earlier bench that it would be sent to a larger bench—but that is a different process.

Harsh laws have existed in the past too, but do you think all such laws need to be questioned?

The Supreme Court also has its limitations. The court can check if a law has been passed correctly, and if that is not the case, it becomes ineffective. The PMLA was passed as a Money Bill in the Rajya Sabha because the government did not have a majority in the Rajya Sabha. If the Supreme Court says it has not been correctly passed, the law becomes ineffective. In that case, Parliament will have to re-enact the law. And now that the Bharatiya Janata Party (BJP) has a majority in Parliament, they can get it through.

On the question of erosion of fundamental rights, I agree that it has been done without checking for impact. During the 1970s, while giving reasons for implementing the Emergency, the Supreme Court declared that if fundamental rights have been suspended, you do not have those rights. Some judges commenting on this judgment said they were more executive-minded than the executive, but when a conviction is based on a technical definition, it misses the spirit of the Constitution.

(Rashme Sehgal is an independent journalist.)

Courtesy: Newsclick

‘Essence of Tyranny is Harsh Laws Used Selectively Against Opponents’—Sanjay Hegde

Senior advocate Sanjay Hegde discusses the recent Supreme Court verdict on the Prevention of Money Laundering Act (PMLA), 2002.

Sanjay hegde
Senior advocate Sanjay Hegde |  Image Courtesy: The Print

The Supreme Court’s recent judgement upholding the amendments made in 2019 to the Prevention of Money Laundering Act, 2002, has created a stir. Several Opposition parties have been saying the Enforcement Directorate, implementing authority for this legislation, targets their leaders and parties. Senior Advocate Sanjay Hegde talks to Rashme Sehgal about why the process in PMLA cases itself becomes a tool for harassment and why convictions are bound to remain insignificant in such circumstances. Edited excerpts.

Opposition parties have dubbed as ‘dangerous’ the recent Supreme Court judgment upholding amendments made in 2019 to the Prevention of Money Laundering Act, 2002. What did you think of this?

It is good that political parties have woken up to the dangers of this law, but they should have been more alert at the stage of legislating in Parliament. There was not too much discussion when it was passed in the Lok Sabha, and the question of passing it as a Money Bill to avoid the Rajya Sabha is still to be adjudicated. Parliamentarians cannot always expect courts to repair their shoddy work.

Over 250 petitions had challenged the 2019 amendments, and many people find them draconian—would you agree?

There were a number of petitions in court, including pleas from politicians, but the court does not interfere with laws simply because they are ‘draconian’. Judicial review is more concerned with the process and not the ‘product’. Legislation is normally checked for power, that is, legislative competence, and for possible violation of fundamental rights. It is apparent that the process argument has been kept for a larger bench, and the questions of fundamental rights have been answered by upholding the doctrine of executive necessity.

The Supreme Court ruling essentially means the Enforcement Directorate can arrest without providing the accused with a copy of its Enforcement Case Information Report or ECIR, which would be seen as an ‘internal document’. The concern with this aspect is that it is unconstitutional. Would you agree?

This judgment holds it to be constitutional [not to give a copy of ECIR], but I do think that on this aspect, the court itself will have to reconsider some day in the future.

Some say the PMLA provisions upheld by the court will deny bail to an accused, who faces the double burden of having to prove his innocence. Does this make bail next to impossible?

These are the provisions of the PMLA upheld by the court. The same judge, Justice AM Khanwilkar, now retired, upheld similar provisions in the Unlawful Activities (Prevention) Act (UAPA), and he was being consistent. The UAPA judgment has been watered down by other judgments, and I expect a similar process with the PMLA judgment.

Is the ED indeed empowered to seize all properties of the accused?

Yes, that is the provision of the law wherein properties can be attached. They can then be sold off if the prosecution ends in a conviction. However, very few cases end in a conviction, and the process of attachment and inquiry itself becomes the punishment.

Opposition parties have accused the government of misusing the Enforcement Directorate to pursue vendettas against political opponents. They cite several opposition politicians who, once they switched sides, found Enforcement Directorate went silent on their alleged misdeeds. What do you think?

There appears to be substance in that statement. The examples are widely known, and the Enforcement Directorate as a weapon of political compliance is a tool often resorted to. Of course it is being used against politicians. Take the case of Nawab Malik, the Nationalist Congress Party (NCP) minister presently in jail. His was a two-decades-old complaint whom Enforcement Directorate went after now. The agency swung into action against him, arrested him, and attached his property. If it fails to prove the charges against him, the property goes free. The Enforcement Directorate process is a tool for detention and harassment and is not focused on conviction.

During the last eight years, Enforcement Directorate raids have gone up 26 times, and it conducted 3,010 money-laundering searches but secured only 23 convictions. Why do you think this discrepancy exists?

The Schedule of the PMLA has been drawn so broadly that all kinds of offences come within its purview. Even an ordinary fight leading to the filing of an attempt to murder case can see the Enforcement Directorate at your doorstep. Hence, over-broad legislation will naturally see a low conviction rate.

Do not forget that the PMLA was originally designed for [tackling] drug money and arms money. But the government has put all kinds of criminality within its ambit, including even an attempt to murder. When ordinary Indian Penal Code offences are brought in, and these cannot be proved, it will bring down the entire edifice [of the PMLA] and allow it to fall.

But what could be the reason to all allow this situation to arise?

The PMLA can be traced in the United States to the prohibition era, where the Mafia earned a lot of money from bootlegging and then set up laundry services where this cash could be recycled. Essentially, illegitimate money from drugs and terrorism was legitimised. But now, any money from all kinds of crimes and belonging to criminals has been brought under its purview. Following a catch-all principle is one of the main reasons for the low conviction rate, whereas what the Enforcement Directorate needed to do was more focused investigations.

Can you explain why the Enforcement Directorate is in action, not the local police or the Central Bureau of Investigation (CBI)?

In West Bengal (where the Enforcement Directorate has raided Trinamool Congress leader Partha Chatterjee), the state government did not allow the CBI to function. The CBI cannot take over a case unless it has permission from the state government. But they were being denied permission on a blanket basis. Wherever a state government is in Opposition [hands], the CBI was being denied permission on a blanket basis which is why the Enforcement Directorate was then brought in.

Nevertheless, the Opposition accuses the government of conducting a political vendetta.

That is correct, but all these raids and arrests provide very good political optics for the ruling party. Take the example of how [Congress leaders] Sonia Gandhi and Rahul Gandhi have been summoned for questioning but not arrested. All the publicity around this serves a political purpose. The government gets the political dividends. One thing Indians understand and get enraged by is when others make money through illegal means. I believe the essence of tyranny is when harsh laws are used selectively against opponents. The converse is to turn opponents into supporters by the use of threats.

And the Opposition plans to move a review petition against the verdict that has upheld the 2019 amendment.

Yes, but it will go to a chamber of the same judges who cleared it [the amendments]. One judge has retired, but it will go to the two other judges on that bench. The ground of review will not be that the judgment was horribly wrong. It will be a review on very narrow grounds. [For example,] particular missed out material is now being shown to the judges [which] was not shown earlier for very valid reasons. Normally, all reviews get discussed without even an oral hearing. It is when subsequent judges doubt the decision by the earlier bench that it would be sent to a larger bench—but that is a different process.

Harsh laws have existed in the past too, but do you think all such laws need to be questioned?

The Supreme Court also has its limitations. The court can check if a law has been passed correctly, and if that is not the case, it becomes ineffective. The PMLA was passed as a Money Bill in the Rajya Sabha because the government did not have a majority in the Rajya Sabha. If the Supreme Court says it has not been correctly passed, the law becomes ineffective. In that case, Parliament will have to re-enact the law. And now that the Bharatiya Janata Party (BJP) has a majority in Parliament, they can get it through.

On the question of erosion of fundamental rights, I agree that it has been done without checking for impact. During the 1970s, while giving reasons for implementing the Emergency, the Supreme Court declared that if fundamental rights have been suspended, you do not have those rights. Some judges commenting on this judgment said they were more executive-minded than the executive, but when a conviction is based on a technical definition, it misses the spirit of the Constitution.

(Rashme Sehgal is an independent journalist.)

Courtesy: Newsclick

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