Re-examine law, increase jail term for money laundering, says SC Judge

They also felt that inclusion of crimes like murder and culpable homicide, but exclusion of tax offences under ‘predicate offence’ for money laundering probe was out of place.

Written by Deeptiman Tiwary | New Delhi | Updated: May 1, 2016 7:15 am
Black-Money “Law breakers are more abreast with technology than the enforcers of law. There is a need for a strong wing to deal with the technological aspect of probes.”

At a time when the Enforcement Directorate (ED) is probing big ticket cases of money laundering such as the AgustaWestland deal, Supreme Court Judge J Chelameswar and retired Justice Arijit Pasayat — who is now vice-chairman of the Special Investigation Team on black money — on Saturday called for a more stringent Prevention of Money Laundering Act (PMLA) with increased jail term.

Both were of the opinion that the seven-year sentence prescribed under the PMLA is too less, given the gravity of the offences. They also felt that inclusion of crimes like murder and culpable homicide, but exclusion of tax offences under ‘predicate offence’ for money laundering probe was out of place.

Speaking at a function to celebrate ED Day, Justice Chelameswar said it is time to “re-examine” the PMLA. “The legislative policy behind PMLA left me amused for many reasons… Money laundering can have far reaching consequences on the lives of the people. So why only seven years of sentence (for such offenders)? Is the sentencing policy in tune with the ambition of the Act,” he asked.

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Raising the same issue later, Justice (retd) Pasayat cited the example of the United States where such offenders are sentenced for up to 150 years. “How I wish we had such sentencing here. Those stealing one rupee and those laundering Rs 300 crore are given the same sentence here,” he said.

Justice Chelameswar also questioned the wisdom behind including offences like culpable homicide not amounting to murder in the schedule of ‘predicate offences’, based on which ED conducts its money laundering probe.

“While murder and attempt to murder are predicate offences, tax offences are still not included in the category. If you are evading massive amount of tax, that is murder of the economy which will eventually impact people,” said Justice (retd) Pasayat.

“The idea behind the law was to get unaccounted wealth that has gone out of the country back into the main framework… but even culpable homicide not amounting to murder is included. Many such offences are in Schedule 1 of the Act… How does it impact economy,” asked Justice Chelameswar.

“I am not questioning the legislative wisdom of Parliament. Courts can’t interfere in that. But a citizen can ask. I am talking as a citizen,” he said.

He said such an approach of “putting everything in a capsule” is detrimental to the efficacy of the Act and tends to render the law vulnerable to abuse. He cited the example of Section 66A of the IT Act which resulted in many arbitrary arrests. Justice Chelameswar was behind the court order which struck down the section.

Commenting on the staff shortage in ED, Justice Chelameswar said “the organisational structure (of ED) remains purely dependent on executive discretion.” He said 90 per cent of the staff were on deputation from other departments. Against a sanctioned strength of 2067, ED’s actual strength is just 697.

He also stressed the need for the ED to have a strong legal department, and urged its sleuths to be more tech-savvy. “Law breakers are more abreast with technology than the enforcers of law. There is a need for a strong wing to deal with the technological aspect of probes,” he said. Minister of State for Finance Jayant Sinha was among those present at the function.

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