Thursday, November 24, 2022

CONSUMER COMPLAINT AGAINST BUILDER SEEKING REFUND

 


CONSUMER COMPLAINT AGAINST BUILDER SEEKING REFUND

The Consumer Protection Act, 1986 have undergone periodic changes vide several amendments and finally there has been a comprehensive changes in the Act and Consumer Protection Act 2019 is enacted.  The Consumer Commissions are flooded with cases against builders seeking various sorts of relief relating to possession, lapses, deficiency in service and more importantly, for seeking refund of the principal deposited along with due interest thereon, on account of delay in delivery of possession and also for seeking refund simpliciter owing to the delay in projects. It is a common knowledge, that, sometime the delay in construction is inordinate and therefore rather than seeking possession of the property, the consumer seeks refund of the sums paid. The law in this regard has evolved vastly, and despite some earlier hiccups, broad and clear periphery has now emerged. The Consumer Protection Act, though, shall only be limited to such consumer dispute which is as per the definition clause, the consumer dispute and that should not relate to a commercial dispute. The pith and substance of this article, though, shall revolve around the periphery of seeking only refund of amount, deposited towards allotment of flat or plot on account of delay in handing over possession.



To begin with, what is of worth reference is a recent Three (3) Judge Bench judgment of hon’ble Supreme Court reported as EXPERION DEVELOPERS PVT. LTD. VERSUS SUSHMA ASHOK SHIROOR[1]  It is held that When Statutes provide more than one judicial fora for effectuating a right or to enforce a duty-obligation, it is a feature of remedial choices offered by the State for an effective access to justice. Thus, whether one opts to approach RERA or Consumer Commissions constituted under the provisions of Consumer Protection Act is a choice of a consumer. It is also held that while interpreting statutes provisioning plurality of remedies, it is necessary for Courts to harmonize the provisions in a constructive manner.

The Supreme Court in Experion Developers (Supra) was pleased to dismiss the appeal preferred by the developer against order of  National Consumer Disputes Rederessal Commission (NCDRC), whereby refund and compensation to Consumer was directed for the failure of the builder to deliver possession of the apartment, within the time stipulated as per the Apartment Buyers Agreement was dismissed. The Supreme Court has held that the Commission is correct in its approach in holding that the clauses of the agreement are one-sided and that the Consumer is not bound to accept the possession of the apartment and can also seek refund of the amount deposited by her with interest - Commission has correctly exercised its power and jurisdiction in passing the directions for refund of the amount with interest.

Pertinently, the appeals were preferred under Section 23 of the Consumer Protection Act, 1986, which has arisen out of the judgment dated 19.06.2019 passed by the National Consumer Disputes Redressal Commission, whereunder, the Commission had directed the Developer to refund an amount of Rs. 2,06,41,379/- with interest @ 9% p.a. to the Respondent-Consumer for its failure to deliver possession of the apartment within the time stipulated as per the Apartment Buyers Agreement. The delay in delivery of possession was held unjustifiable. The interplay between the judicial remedies under the Act and the Real Estate (Regulation and Development) Act, 2016 and the remedial choices of a consumer under these statutes were delved in. It was held that the Commission created under the Act has the power to direct refund under Section 14 of the Act. The Consumer Protection Act (CPA) and the RERA Act 2016 does not exclude or contradict each other and therefore harmonious construction of the provisions shall be necessary with a view to achieve common object. The cross appeal was also preferred i.e one by the consumer also was preferred to the limited extent of seeking enhanced rate of interest.

As already delved in above, the power to direct refund of the amount and to compensate a consumer for the deficiency in not delivering the apartment as per the terms of Agreement is held within the jurisdiction of the Consumer Courts - A consumer can pray for refund of the money with interest and compensation. The consumer could also ask for possession of the apartment with compensation. The consumer can also make a prayer for both in the alternative. If a consumer prays for refund of the amount, without an alternative prayer, the Commission will recognize such a right and grant it, of course subject to the merits of the case. If a consumer seeks alternative reliefs, the Commission will consider the matter in the facts and circumstances of the case and will pass appropriate orders as justice demands.



The Supreme Court has earlier also held that Consumer Protection Act and the RERA Act neither exclude nor contradict each other - They are concurrent remedies operating independently and without primacy. [Referred to Imperia Structures Ltd v. Anil Patni[2] and IREO Grace Realtech (P) Ltd. V. Abhishek Khanna[3].

The Commission, in its judgment dated 19.06.2019, allowed the complaint after referring to Clause 10 (relating to the project completion period), Clause 11 (relating to the possession and conveyance of the apartment), as well as Clause 13 (relating to delay in possession). The Commission found that the agreement is one-sided, heavily loaded against the allottee and entirely in favour of the Developers. Following the decisions of the Supreme Court Pioneer Urban Land and Infrastructure Ltd. v. Govindan Raghvan[4], the Commission directed the Developer to refund the amount of Rs.2,36,15,726/- with interest @ 9% p.a.

It is against these findings and the consequential directions of the Commission that the cross appeals were filed –one by the Developer bearing Civil Appeal No. 6044/2019 and another by the Consumer being Civil Appeal No. 7149/2019, challenging the Commission's judgment to a limited extent for grant of an enhanced interest @ 24% p.a.

The following issues were for consideration before the hon’ble Supreme Court:

(i)            Whether the terms of the Apartment Buyers Agreement amount to an ‘unfair trade practice’ and whether the Commission is justified in not giving effect to the terms of Apartment Buyer’s Agreement as laid down in the Pioneer case?

(ii)           Whether the Commission has the power under the Consumer Protection Act, 1986 to direct refund of the amount deposited by the Consumer with interest?

(iii)          Whether the relief granted by the Commission require any modification to serve ends of justice?

 

The Supreme Court has in “Pioneer case”(Supra)  in somewhat similar factual as well as legal context held as under:

6.1 In the present case, admittedly the appellant builder obtained the occupancy certificate almost 2 years after the date stipulated in the apartment buyer’s agreement. As a consequence, there was a failure to hand over possession of the flat to the respondent flat purchaser within a reasonable period. The occupancy certificate was obtained after a delay of more than 2 years on 28-8-2018 during the pendency of the proceedings before the National Commission. In LDA v. M.K. Gupta, this Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a “service” as defined by Section 2(o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service. In Fortune Infrastructure v. Trevor D’ Lima, this Court held that a person cannot be made to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the amount paid by him, along with compensation”.

 

The principle laid down in Pioneer’s case has been followed consistently in many cases where the terms of the Apartment Buyer’s Agreement were found to be one-sided and entirely loaded in favour of the Developer, and against the allottee at every step. The following are instances where the terms of the Apartment Buyer’s Agreement were found to be oppressive, constituting unfair trade practice and the Court has not given effect to such terms of the Agreement.

In NBCC (India) Ltd. v. Shri Ram Trivedi[5], the Supreme Court has found that the agreement fastening liability on the purchaser to pay simple interest @ 12% p.a. if he failed to pay installments on time and at the same time, if the seller failed to hand over the possession on time, he would have to pay compensation only @ of Rs. 2 per square feet would constitute an unfair trade practice. The Court held that a term of a contract would not be final and binding if it is shown that the flat purchasers have no option but to sign on the dotted line of a contract framed by the builders. The Supreme Court further held that Consumer Forums were empowered to award just and reasonable compensation as an incident of its power to direct removal of a deficiency in service; they are not constrained by the rate prescribed in the agreement. The Supreme Court has held that the compensation could be granted, even if possession had been delivered. The same principles are followed in a subsequent decision in DLF Home Developers Ltd. v. Capital Greens Flat Buyers Association & Ors[6].

A Three-Judge bench of Supreme Court in IREO Grace Realtech (P) Ltd. v. Abhishek Khanna & Ors (Supra) had occasion to deal with a delay compensation clause, which is similar to the clause in the present case, which provided that the Developer would be liable to pay delay compensation @ Rs 7.5 per square foot which works out to approximately 0.9 to 1% p.a. The Court held that this Clause was one-sided and entirely loaded in favour of the Developer and against the allottee. The Supreme Court had concluded that the powers of the Consumer Courts are in no manner constrained to declare a contractual term as unfair and one-sided as an incident of the power to discontinue unfair or restrictive trade practices. It was held:

“34. We are of the view that the incorporation of such one-sided and unreasonable clauses in the apartment buyer’s Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. Even under the1986 Act, the powers of the consumer fora were in no manner constrained to declare a contractual term as unfair or one-sided as an incident of the power to discontinue unfair or restrictive trade practices. An “unfair contract” has been defined under the 2019 Act, and powers have been conferred on the State Consumer Fora and the National Commission to declare contractual terms which are unfair, as null and void. This is a statutory recognition of a power which was implicit under the 1986 Act”.

 

That as regards the issue of payment of interest, as to what shall be the date of reckoning of payment of interest, the Supreme Court, has held that the date of respective deposits shall be the point wherefrom the interest shall be payable. It was thus held as under:

22.1 We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. v. DS Dhanda and Ors. (2020) 16 SCC 318 and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the appeal filed by purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits”.

 

The Supreme Court had upheld, though, payment of interest @9% per annum from the dates of respective deposits of installment.

In Wing Commander Arifur Rahman Khan and Aleya Sultana & Ors. v. DLF Southern Homes Private Limited[7]  the Supreme Court has held that there is no embargo on the award of compensation beyond the rate stipulated in the Apartment Buyer’s Agreement, where handing over the possession of the flat has been delayed. The Court observed that the Consumer Forums must take a robust and a common-sense approach by taking judicial notice of the fact that flat purchasers obtained loans and are required to pay EMIs to financial institutions for subserving their debts. The Delay Compensation Clause provided for Rs. 5 per square foot per month. This Court found that this stipulation is clearly one-sided and does not maintain a level platform or even reflect a bargain between the parties. The Court granted additional compensation @ 6% p.a. simple interest to each buyer therein, over and above the Delay Compensation Clause.

The Supreme Court has further held that a consumer invoking the jurisdiction of the Commission can seek such reliefs as he/she considers appropriate. A consumer can pray for refund of the money with interest and compensation. The consumer could also ask for possession of the apartment with compensation. The consumer can also make a prayer for both in the alternative. If a consumer prays for refund of the amount, without an alternative prayer, the Commission will recognize such a right and grant it, of course subject to the merits of the case. If a consumer seeks alternative reliefs, the Commission will consider the matter in the facts and circumstances of the case and will pass appropriate orders as justice demands. This position is similar to the mandate under Section 18 of the RERA Act[8].

The Supreme Court has clearly referred to the legal regime under the Consumer Protection Act, with a view to show that the Commission has the power and jurisdiction to direct return of money under Section 14 of the Consumer Protection Act, if a consumer so chooses. The freedom to choose the necessary relief is of the Consumer and it is the duty of the Courts to honour it.



                                   CONCLUSION

What thus emerges from the aforesaid discussion is that no fetter is attached to the power of Consumer Commissions and there is no conflict between RERA and Consumer Protection Act and a consumer may have the option to their remedy in whichever forum they prefer. Further, there is no embargo in a case against builder, as regards the necessity of seeking possession, notwithstanding delay. A consumer can seek possession of plot or flat as the case may be or refund of the sums paid as alternative, or compensation for delayed possession of the flat. The standard form agreement which contains one sided clauses has held to be not binding. As law has evolved, the one sided contract can also be negated by Consumer Commission. The sum ad substance of the law that has emerged is that unfair trade practices on the part of builder cannot be permitted. The one sided agreement proposed by the builder and eventually signed by the consumer is construed to be unfair trade practices and the periphery of relief or ambit of the Consumer Protection Act has considerably been widened since then.

                                                            ------

Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com     

 



[1] 1  2022 LiveLaw (SC) 352.

[2] (2020) 10 SCC 783

[3] (2021) 3 SCC 241]

[4] (2019) 5 SCC 725

[5] (2021) 5 SCC 273

[6]  (2021) 5 SCC 537

[7] (2020) 16 SCC 512

[8]. THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

 

Wednesday, November 23, 2022

WHY PMLA 2002 PROVISIONS ARE STRINGENT?


                    WHY PMLA 2002 PROVISIONS ARE STRINGENT?

A Three (3) Judge bench of hon’ble Supreme Court has recently on July 27th 2022 in batch petitions captioned as VIJAY MADANLAL CHOUDHARY & ORS SPECIAL LEAVE PETITION (CRIMINAL) NO. 4634 OF 2014 have settled the issues relating to power of Enforcement Directorate (ED) and its ambit under the Prevention of Money Laundering Act 2002 (PMLA). The pleas concerning validity and interpretation of certain provisions of the Prevention of Money Laundering Act, 2002 and the procedure followed by the ED while inquiring /investigating offences under the PMLA, being violative of the constitutional mandate is set to rest. The parliament has amended Section 45 of the 2002 Act vide Act 13 of 2018, so as to remove the defect noted in a decision of Supreme Court in Nikesh Tarachand Shah vs. Union of India & Anr (2018) 11 SCC 1. The amendment came to be challenged before different High Courts including before Supreme Court. The efficacy of amended Section 45 of the 2002 Act was put in issue and answered by the concerned High Courts. Those decision(s) have been assailed before the Supreme Court and the same was forming part of the batch petitions.

The Supreme Court in a batch of petitions had to deal with the pleas concerning validity and interpretation of certain provisions of the Prevention of Money Laundering Act, 2002 and the procedure followed by the Enforcement Directorate, while inquiring into/investigating offences under the PMLA, being violative of the constitutional mandate. In some cases where relief of bail was prayed, the efficacy of amended Section 45 of the 2002 Act was put in issue and answered by the concerned High Court. All such decision(s) were assailed before the Supreme Court vide separate writ petitions and heard together as overlapping issues have been raised by the parties. Various other civil and criminal writ petitions, appeals, special leave petitions, transferred petitions and transferred cases had come up for hearing.

The crux of the controversy is section 45 and section 50 of PMLA, besides the provisions of Section 3 and Section 24 of the Act and in the backdrop of several objections to the provisions of the PMLA 2002, the Supreme Court had to deal with all such issues so as to set at rest any issues subsisting with regard to the said enactment. Some of the provisions of PMLA are reproduced herein for ready reference:

24. Burden of proof.—In any proceeding relating to proceeds of crime under this Act,—

(a)   in the case of a person charged with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and

(b)   in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-laundering.]

            45. Offences to be cognizable and non-bailable.—

(1)  [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence 2 [under this Act] shall be released on bail or on his own bond unless—]

(i) the Public Prosecutor has been given a opportunity to oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail:

Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, [or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees] may be released on bail, if the Special Court so directs:

Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by—

(i) the Director; or

(ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government.

[(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.]

(2) The limitation on granting of bail specified in 5 *** sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail.

[Explanation.—For the removal of doubts, it is clarified that the expression "Offences to be cognizable and non-bailable" shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (2 of 1974), and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfillment of conditions under section 19 and subject to the conditions enshrined under this section.]

 

50. Powers of authorities regarding summons, production of documents and to give evidence, etc.

(1) The Director shall, for the purposes of section 13, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:—

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a 1 [reporting entity] and examining him on oath;

(c) compelling the production of records;

(d) receiving evidence on affidavits;

(e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed.

(2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act.

(3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

 (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

(5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act:

Provided that an Assistant Director or a Deputy Director shall not—

(a) impound any records without recording his reasons for so doing; or

(b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the  [Joint Director].

The issues raised:

(i)              Whether the procedure followed by the ED in registering the Enforcement Case Information Report is opaque, arbitrary and violative of the constitutional rights of an accused?

(ii)            Whether the procedure being followed under the PMLA is draconian as it violates the basic tenets of the criminal justice system and the rights enshrined in Part III of the Constitution of India, in particular Articles 14, 20 and 21 thereof?

(iii)           Whether there can be a procedure in law, where penal proceedings can be started against an individual, without informing him of the charges?

 


The power of ED to arrest an individual on the basis of an ECIR without informing him of its contents is perceived as arbitrary and violative of the constitutional rights of an accused. Besides that, the right of an accused to get a copy of the First Information Report at an early stage and also the right to know the allegations are inherent part of Article 21 of Constitution of India.

It is urged that in comparison to the constitutional law, the Cr.P.C. and the Indian Evidence Act 1872, the provisions under the PMLA are draconian and, thus, violative of Articles 20(3) and 21 of the Constitution. Section 50 of the PMLA is much worse than Section 67 of the Narcotic Drugs and Psychotropic Substance Act.

The Supreme Court has thus proceeded to decipher the purport of various provisions of PMLA. As regards Section 24, in the first place, it is observed that the legal presumption in either case is about the involvement of proceeds of crime in money-laundering. This fact becomes relevant, only if, the prosecution or the authorities have succeeded in establishing at least three basic or foundational facts. First, that the criminal activity relating to a scheduled offence has been committed. Secondly, that the property in question has been derived or obtained, directly or indirectly, by any person as a result of that criminal activity. Thirdly, the person concerned is, directly or indirectly, involved in any process or activity connected with the said property being proceeds of crime. On establishing the fact that there existed proceeds of crime and the person concerned was involved in any process or activity connected therewith, itself, constitutes offence of money-laundering. On establishing these foundational facts in terms of Section 24 of the 2002 Act, a legal presumption would arise that such proceeds of crime are involved in money-laundering. If a person concerned had no causal connection with such proceeds of crime, then he should be able to disprove the fact about his involvement in any such process or activity connected therewith and he may produce evidence to that effect. The legal presumption, in such a situation shall stand rebutted.

It is observed by the Supreme Court that the change effected in Section 24 of the 2002 Act is the outcome of the mandate of international Conventions and recommendations made in that regard. Further, keeping in mind the legislative scheme and the purposes and objects sought to be achieved by the 2002 Act coupled with the fact that the person charged or any other person involved in money-laundering, would get opportunity to disclose information and evidence to rebut the legal presumption in respect of facts within his personal knowledge during the proceeding before the Authority or the Special Court, by no stretch of imagination, provision in the form of Section 24 of the 2002 Act, can be regarded as unconstitutional. It has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act. In any case, it cannot be perceived as manifestly arbitrary.

The pertinence of the aspect relates to presumption of guilt of accused in PMLA, contrary to conventional criminal law where accused is presumed innocent until proven guilty is against the basic tenets of law and secondly, whether an accused arrested under PMLA can be denied ECIR (Enforcement Case Information Report) which is akin or equivalent to F.I.R in ordinary criminal case?

The Supreme Court has upheld section 50 of PMLA which empowers ED officials to record statements on oath from any person. The admission so recorded shall be admissible in Courts, unlike statement made to police u/s 161 of Cr.P.C or confessions made to police u/s 27 of Indian Evidence Act. The ECIR (Enforcement Case Information Report) is not required to be provided to the accused/arrested person

The offence of money laundering, i.e., enjoying the “proceeds of crime”, is a “continuous one” and can be acted upon independent of when the scheduled offence was committed. This implies holding property that is derived from an offence which may not have been a scheduled offence at the time of commission of the offence, will also be defined as money laundering. In effect, the offence of money laundering has retrospective effect.

In para no. 187 of the judgment the Supreme Court had concluded as under:

(i)                The expression “proceedings” occurring in Clause (na) of Section 2(1) of the 2002 Act is contextual and is required to be given expansive meaning to include inquiry procedure followed by the Authorities of ED, the Adjudicating Authority, and the Special Court.

(ii)              The expression “investigation” in Clause (na) of Section 2(1) of the 2002 Act does not limit itself to the matter of investigation concerning the offence under the Act and is interchangeable with the function of “inquiry” to be undertaken by the Authorities under the Act.

(iii)             The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the 534 jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money-laundering against him or any oneclaiming such property being the property linked to stated scheduled offence through him.

(iv)             Section 5 of the 2002 Act is constitutionally valid. It provides for a balancing arrangement to secure the interests of the person as also ensures that the proceeds of crime remain available to be dealt with in the manner provided by the 2002 Act. The procedural safeguards as delineated by us hereinabove are effective measures to protect the interests of person concerned.

(v)              Section 24 of the 2002 Act has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act and cannot be regarded as manifestly arbitrary or unconstitutional.

(vi)             The statements recorded by the Authorities under the 2002 Act are not hit by Article 20(3) or Article 21 of the Constitution of India.

(vii)             Section 63 of the 2002 Act providing for punishment regarding false information or failure to give information does not suffer from any vice of arbitrariness.

(viii)          In view of special mechanism envisaged by the 2002 Act, ECIR cannot be equated with an FIR under the 1973 Code. ECIR is an internal document of the ED and the fact that FIR in respect of scheduled offence has not been recorded does not come in the way of the Authorities referred to in Section 48 to commence inquiry/investigation for initiating “civil action” of “provisional attachment” of property being proceeds of crime.

(ix)              Supply of a copy of ECIR in every case to the person concerned is not mandatory, it is enough if ED at the time of arrest, discloses the grounds of such arrest. (c) However, when the arrested person is produced before the Special Court, it is open to the Special Court to look into the relevant records presented by the authorised representative of ED for answering the issue of need for his/her continued detention in connection with the offence of money-laundering.


CONCLUSION

The hon’ble Supreme Court has therefore by virtue of the aforesaid judgment VIJAY MADANLAL CHOUDHARY  (Supra) has upheld the provisions of PMLA 2002 as also the amendment necessitated in the Act owing to earlier judgment of Supreme Court reported as Nikesh Tarachand Shah (Supra) and after detailed deliberation has upheld the constitutionality of provisions of PMLA 2002 and the amendments carried out thereto. The conventional law presumes innocence of accused, until the guilt is proved beyond reasonable doubt, however, there are several enactments, where, the innocence of accused is not inbuilt and primary onus of innocence are shifted on the accused. Given the nature of crime and its effect on society, it was felt necessary that such white collared crime under PMLA, should also have the onus to prove their innocence on the accused and the claim of some provisions of PMLA as ultra vires is negated and it has passed muster. Similarly, power of ED as embodied in Section 50 of the Act and such other ancillary power under the Act was found necessary with a view to accord teeth to the authorities, given the magnitude of the crime. Moreover, check and balance is already there as Adjudicating Authority and Special Courts are constituted and empowered to deal with the issues arising under the Act.

                                           ---------

                                     Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com    


 

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