PMLA amendments | Money Bill verdict holds the key

The court has left it open for a seven-judge Bench to decide whether these amendments could have been made to the PMLA through the Money Bill route.

View of Supreme Court of India. | Photo Credit: Sushil Kumar Verma

The future of several conclusions in the Supreme Court’s judgment on July 27, upholding amendments giving the Enforcement Directorate almost blanket powers under the Prevention of Money Laundering Act (PMLA) of 2002, may depend on the final outcome of a reference made to a seven-judge Bench in 2019.

The court has left it open for a seven-judge Bench to decide whether these amendments could have been made to the PMLA through the Money Bill route.

In November 2019, a five-judge Bench led by then Chief Justice of India Ranjan Gogoi had referred to a larger Bench the issue and question posed in the Roger Mathew vs. South Indian Bank Ltd. case as to whether amendments like these can be passed as a Money Bill in violation of Article 110 of the Constitution.

The judgment by a three-judge Bench led by Justice Khanwilkar on July 27 refrained from delving into the question even though the petitioners had questioned the legality of the PMLA amendments which were introduced via Finance Acts/Money Bills.

“At the outset, it was made clear to all concerned that this ground of challenge will not be examined in the present proceedings as it is pending for consideration before the Larger Bench of this court (seven judges) in view of the reference order passed in Roger Mathew. We are conscious of the fact that if that ground of challenge is to be accepted, it may go to the root of the matter and amendments effected vide Finance Act would become unconstitutional or ineffective,” Justice Khanwilkar wrote.

The Bench, in its judgment, further delinked writ petitions involving issues relating to Finance Bill/Money Bill, so that they could be heard along with the Roger Mathew case by a seven-judge Bench.

Justice Khanwilkar explained that his Bench had proceeded to hear and decide the other points of challenge — procedure of arrest, search and seizure, pre-conditions of bail, etc. — regarding the PMLA amendments after taking into consideration the possibility that the seven-judge Bench may uphold their passage as Money Bill.

In July 2019, the Supreme Court had even sought the response of the government on a special leave petition filed by Rajya Sabha member Jairam Ramesh against a February 28 decision of the Delhi High Court, which rejected his challenge against amendments enacted to the PMLA from 2015 onwards through Money Bills.

A Money Bill is deemed to contain only provisions dealing with all or any of the matters under clauses (a) to (g) of Article 110(1), largely including the appropriation of money from the Consolidated Fund of India and taxation. In other words, a Money Bill is restricted only to the specified matters and cannot include within its ambit any other matter.