Kapil Sibal reacts to Sanjay Raut's arrest; blames SC judgement on PMLA for being 'flawed'

Following Shiv Sena MP Sanjay Raut's arrest, Senior Congress leader Kapil Sibal on Monday raised questions on the Supreme Court's judgement upholding the Enforcement Directorate's (ED) power to arrest under the Prevention of Money Laundering Act (PMLA). Taking to Twitter, Sibal stated that ED's powers and reach of investigation had been endorsed by a 'clearly flawed' SC judgement, and would now be used to 'topple elected governments and destroy our federal structure'.

Sanjay Raut was arrested by ED in a money laundering case linked to alleged irregularities in the re-development of a Mumbai chawl and related transactions involving his wife and 'associates'. According to sources, Raut was arrested for 'non-cooperation', with ED alleging that 'unaccounted cash was recovered'. Moreover, incriminating documents were also reportedly seized. The central agency as a part of its probe on Sunday conducted searches at his residence in Bhandup for nine hours and questioned him before shifting him to the agency's office in south Mumbai in the evening.

SC upholds ED's power to arrest under PMLA

The Supreme Court upheld the validity of various sections of the Prevention of Money Laundering Act on July 27. These include Sections 3 (definition of money laundering), 5 (attachment of property), 8(4) [taking possession of attached property), 17 (search and seizure), 18 (search of persons), 19 (powers of arrest), 24 (reverse burden of proof), 44 (offences triable by the special court) and 45 (offences being cognizable and non-bailable). A three-judge bench led by Justices AM Khanwilkar was hearing the pleas filed by 242 persons including Congress MP Karti Chidambaram.

The Supreme Court upholding the ED's right to arrest persons under the PMLA assumed significance at a juncture with many prominent politicians under the scanner of the central agency. Moreover, the SC held that the argument about the proportionality of punishment under this Act with respect to scheduled offences is "wholly unfounded and rejected". In its verdict, it also made a clear distinction between an Enforcement Case Information Report and an FIR.

The apex court ruled, "ECIR cannot be equated with FIR and ECIR is an internal document of ED. Supply of ECIR to the accused is not mandatory and only disclosure of reasons during the arrest is enough. Even the ED manual is not to be published since it is an internal document. Department has to explore the desirability of uploading broad objectives of the Act on website". This is of vital importance in the context of the National Herald case where Congress has accused the ED of not supplying the Gandhis with a copy of the ECIR.