Shaping rights jurisprudence
The apex court’s order on benami property raises key questions over its PMLA verdict
To understand the real import of the Supreme Court (SC)’s decision striking down some provisions of the Prohibition of Benami Property Transactions Act of 1988, one has to go back to July 27, when the court backed the powers of the Enforcement Directorate (ED) under the 2002 Prevention of Money Laundering Act (PMLA). The verdict in the benami property issue held that the ED’s powers flowing from the 1988 law were overly broad and set aside all prosecutions carried out under the law between 1988 and 2016, when the legislation was amended. In doing so, the SC appeared to be correcting course on rights-based jurisprudence after another bench favoured the State’s remit in pursuing financial crimes over provisions to safeguard individual liberties in the PMLA judgment.
Two aspects merit notice. The first concerns the divergent stances on reversing the burden of proof. In PMLA, the SC was satisfied with stringent bail conditions and presumption of guilt of the accused and even allowed investigators to proceed without sharing the Enforcement Case Information Report (ECIR), similar to a first information report in an ordinary criminal case. But in the benami decision, the SC didn’t favour imputing criminality without a presumption of innocence (or mens rea, explanation of the criminal intent driving the alleged act). Second, in the PMLA case, the court dismissed arguments that the ED’s powers were arbitrary and said it was imperative for the State to frame a stringent law that not only punished the offender but also helped in creating a deterrent effect. But in the benami act case, the SC said a law that was overly broad, disproportionately harsh, and operated without adequate safeguards is unconstitutional. This reasoning was used by the court to say that benami provisions could not be applied retrospectively.
Put simply, in the former case, the court sided with the State prerogative of preventing financial crimes over individual liberties and, in the second, it upheld the principles of natural justice and constitutional safeguards. This holds significance at a time when financial crime agencies are mired in allegations of politicisation. Two benches of the court have now delivered judgments in financial crime cases that differ considerably on pivotal points of law. The SC is set to take up a review petition of the PMLA judgment, whose consequence could be a disquieting erosion of the safeguards of the right to life and liberty. Whether the court chooses to review its position on the PMLA verdict may well decide the course of rights-based jurisprudence in the years to come.