The Centre informed the Supreme Court on Wednesday that 4,700 cases are being investigated by the Enforcement Directorate as on date, and only 313 people have been arrested for the alleged offences since the enactment of the Prevention of Money Laundering Act in 2002.
The total amount covered by interim orders of no coercive action passed by the courts in such matters is approximately Rs 67,000 crore, the government told a bench headed by Justice A M Khanwilkar.
Solicitor General Tushar Mehta told the bench, also comprising Justices Dinesh Maheshwari and C T Ravikumar, that in money laundering cases relating to Vijay Mallya, Mehul Choksi and Nirav Modi, the ED has confiscated around Rs 18,000 crore by the orders of the courts following due procedure.
The apex court is dealing with a batch of petitions concerning the interpretation of certain provisions of the PMLA.
“As on date, 4,700 cases are being investigated, right from the inception, by the Directorate of Enforcement. The number of cases taken up for investigation each year in last five years varies from 111 cases in 2015-16 to 981 in 2020-21. This is the average number of cases,” Mehta told the bench.
He said the top court is dealing with a statute which is not just penal but a preventive and regulatory statute providing for investigation and final prosecution.
“I can tell you at the outset, right from 2002, the year in which the PMLA Act was enacted, till date, there are only 313 arrests. From 2002 till date, in 20 years, 313 arrests,” he said, adding, “And the reason is, very strict statutory safeguards.”
Referring to the data, Mehta said it is evident that very small number of cases are being taken up for investigation under the PMLA as compared to annual registration of cases under the money laundering act in countries like the United Kingdom, United States of America, China, Hongkong, Belgium and Russia.
“This is just to satisfy your lordships conscience that your lordships are not dealing with something which has become so harsh and so over encroaching upon the liberties of the citizens,” he said.
When Mehta referred to the number of arrests, the bench observed that there are 313 arrests in 20 years and more than 200 pleas are pending before it in the matter.
The solicitor general said that prayer for no coercive steps was so mechanically prayed for that some of the persons, who have left the country after thousands of crores of money laundering and India is seeking their extradition, were filing petitions and they were granted order of no coercive action
“The total amount covered by the interim orders passed by your lordships is approximately Rs 67,000 crore and because of no coercive action, what must have happened to the evidence disappearance is unimaginable because now, the evidence disappear by click of a button,” he said.
Mehta said that during the last five years, that is 2016-21, 2,086 cases were taken up for investigation.
“Out of 33 lakh predicate offences registered, ED has registered investigation only in 2,086 cases in five years. In five years, 33 lakh predicate offences are registered,” he said.
The bench said, “It is 2,186, not 2,086”.
The solicitor general said, “I stand corrected. I am obliged.”
He said there is a system in place about reporting on suspicious transactions and there are sufficient safeguards and checks and balances so that the power can never be misused.
Mehta said corruption is a major generator of the proceeds of crime and money laundering.
He said India is a part of a global anti-money laundering network and there are various conventions which require all the member states to bring their respective money laundering law in tune with each other.
Mehta said the global community has found that money laundering is such a menace which cannot be tackled or treated at individual country level and there will have to be a global response to this.
“The purpose is to ensure that nobody becomes belagaam ghoda (unbridled horse). We have to be very very clear about money laundering and we are strict as a nation. We are expected to be strict by the global community,” he said during the arguments which would continue on Thursday.
On February 15, the apex court had stressed the need for a fast investigation if the ED comes across an intelligence input indicating huge illegal money laundering, observing that “cash travels faster than light”.
Some of the petitioners had argued in the apex court that there cannot be "mechanical lodging" of an enforcement case information report (ECIR) as the PMLA requires that there must be some indication of the act of money laundering and projecting the proceeds of crime as untainted.
The solicitor general had earlier told the bench that there are over 200 petitions in the matter and interim stays have been granted in several serious cases due to which investigation has been affected.
Some of these petitions have challenged the validity of certain provisions of the PMLA.
