Institute of Legal and Management Studies

A writ petition has been filed in the Supreme Court challenging the Constitutional validity of S.50 and S.63 of the Prevention of Money Laundering Act, 2002 (PMLA).

The plea states that the impugned provisions are violative of Articles 14, 20,21 and 300A of the Constitution.

Last week, a bench comprising Chief Justice of India BR Gavai and Justice AG Masih issued notice to the Union on the petition and tagged it with a similar matter (WP(Crl) 65/2023)

Notably, S. 50 of the PMLA provides the authorities of the Enforcement Directorate with powers similar to that of a civil court and other investigative powers. These include (1) powers equivalent to that of civil court; (2) powers to summon any person to provide evidence/ produce records; (3) such persons under the summons are under the obligation to comply; (4) proceedings under the above powers are considered to be judicial proceedings within the meaning of section 193 and section 228 of the Indian Penal Code; (5) authorities have the power to impound the records produced during these proceedings after recording reasons for such impoundment.

S.63 on the other hand outlines the penalities for giving false information or not complying with the provisions of the Act.

What Are The Grounds Of Challenge?

(1) The provision of S.50 especially the power of the Directorate to summon and record statements of a non-accused also leads to potential coercion and self incrimination. This is in violation of Article 20(3) and Article 21 of the Constitution

(2) The decision in Vijay Madanlal Choudhary v. Union of India deserves to be held per incuriam (through lack of care) and issue raised in the present petition be settled by a larger bench under Article 145(3) (where substantial questions of law are to be decided by a constitutional bench of atleast 5 Supreme Court Judges)

Notably, the decision in Vijay Mandanlal is presently under review by a bench of Justices Surya Kant, Ujjal Bhuyan and N Kotiswar Singh.

(3) Non disclosure of the ECIR or the vast scope of the ED's investigation would lead to a 'roving and fishing inquiry' which is legally impermissible.

(4) Summoning an individual without furnishing the reasons for such a summon is violative of his/her fundamental rights and Criminal procedure. "Every criminal statute must satisfy the test of fair play", and there exists no such procedure under the criminal jurisprudence which allows summoning without giving reasons.

In the landmark case of Vijay Madanlal Choudhary v. Union of India held that held that the ED officials are not "police officials" and hence the statements recorded by them under Section 50 of the Act are not hit by Article 20(3) of the Constitution, which guarantees the fundamental right against self-incrimination. The punishment of fine or arrest for giving false information cannot be construed as a compulsion to give statement. Section 50 procedure is in the nature of an inquiry, not an investigation.

The Court further held that Enforcement Case Information Report(ECIR) cannot be equated with an FIR and that it is only an internal document of the ED. Therefore, the CrPC provisions relating to FIR will not apply to ECIR. Supplying ECIR is not mandatory and disclosure of grounds of arrest is sufficient. However when person is before Special Court, it can ask for records to see if continued imprisionemt is necessary.

The plea has been filed with the assistance of Advocate Ashish Pandey and Advocate Lipika Das.

Case Details : NSDPAY Technology Private Limited v. The Union of India & Anr | WP (Crl) 132/2025