Chhattisgarh moves Supreme Court challenging PMLA; suit to be heard on May 4

The suit was mentioned before the top court by senior advocate Mukul Rohatgi for immediate listing as the state government sought urgent orders to stop search and seizure carried out by the ED

The Supreme Court will take up a suit filed by the Chhattisgarh government against the Centre on May 4 to declare the Prevention of Money Laundering Act, 2002 (PMLA) as unconstitutional.

This is the first suit being filed by a state government challenging the vires of the PMLA. (PTI file image)

The suit was mentioned before the top court on Wednesday by senior advocate Mukul Rohatgi for immediate listing as the state government sought urgent orders to stop search and seizure carried out by the Enforcement Directorate (ED) across the state in connection with a first information report (FIR) registered in Karnataka.

In the suit drawn by advocate Sumeer Sodhi, the state government claimed the entire Act to be declared unconstitutional.

It specifically referred to the wide powers provided to the ED under PMLA for search and seizure (Section 17), power of ED officer to summon and record a statement admissible as evidence in court of law (Section 50), overriding effect of PMLA over any other law (Section 71) and punishment for giving false information (Section 63) and prayed that at the least, these provisions should be declared ultra vires of the Constitution for being violative of fundamental rights of citizens.

Rohatgi appeared before a bench of Chief Justice of India (CJI) Dhananjaya Y Chandrachud and justice PS Narasimha and said, “We are seeking some urgent orders. Please list this on Monday.”

The Court instead directed the matter to be listed on May 4.

This is the first suit being filed by a state government challenging the vires of the PMLA.

The suit has been filed under Article 131 which gives power to the Supreme Court to decide disputes between two states or the Centre and state.

Giving the details of a particular case, which prompted it to approach the top court, the Chhattisgarh government said an FIR was registered at Kadugodi police station in Bengaluru against a person named Suryakant Tiwari for offenses punishable under various sections of IPC including assault or criminal force to deter public servant from discharging his duty and destruction of evidence.

“The complainant in the FIR is the Income Tax Department and the allegation pertains to alleged illegal collection on levy of coal as well as attempts to influence public servants through corrupt and illegal means in the state of Chhattisgarh,” the suit said.

It said that the ED on the basis of the predicate offense, registered an ECIR dated September 29, 2022 and started conducting its investigation.

“The said investigation has resulted in indiscriminate surveys and raids at various departments and offices of the state government, and arrests of state officials,” the Chhattisgarh government said.

Referring to the provisions of the PMLA, it said that a criminal investigation process must adhere to the principles of openness, transparency, and established legal procedures.

It said that certain amendments have been carried out to the provisions of the PMLA by way of finance acts of 2015, 2016, 2018, and 2019 and these amendments to the PMLA through the route of the finance acts are liable to be struck down being colourable uses of legislative power, violative of Article 110(1) of the Constitution.

(With PTI inputs)