ED flags concern over increasing trend of cases against PMLA provisions

The Enforcement Directorate (ED) has told the Delhi High Court that persons involved in large-scale money laundering and serious financial frauds have made it a practice to challenge various provisions of the PMLA, including the agency's power to arrest.

The ED contended that a subterfuge was craftily designed by the "unscrupulous litigants" to bypass the exercise of filing a regular bail plea before the court concerned by directly seeking a habeas corpus writ or bail or anticipatory bail under the garb of challenging the constitutional validity of certain provisions of the Prevention of Money Laundering Act (PMLA).

A habeas corpus petition is a writ requiring a person under arrest to be brought before a judge or in court, especially to secure his release, unless lawful grounds are shown for his detention. The submissions were made before a bench of justices Siddharth Mridul and Sangita Dhingra Sehgal by the ED in an affidavit filed in response to a habeas corpus plea moved by alleged lobbyist Deepak Talwar, challenging his detention by Indian agencies after he was deported from the UAE on January 31 in connection with a money-laundering case.

The ED has alleged that Talwar, who is in its custody, acted as a middleman in negotiations to favour foreign private airlines, causing loss to national carrier Air India. The court listed the matter for further hearing on February 18 as senior advocate Mukul Rohatgi, appearing for Talwar, was not available on Tuesday.

The ED, in its affidavit filed through Centre's standing counsel Amit Mahajan, claimed that Talwar was abusing the august forum of this court by seeking a habeas corpus writ to bypass the only available remedy of seeking bail. In his habeas corpus plea, Talwar has claimed that his arrest and custody from January 30 onwards was illegal detention. He has alleged that his fundamental rights have been violated by the authorities.

However, the ED said Talwar was arrested by its competent officers under the PMLA and he was in custody pursuant to a valid remand order passed by a competent court, the jurisdiction of which was not in question, and that the habeas corpus writ was "not maintainable". "With a view to justifying the prayer for habeas corpus and directly approaching the high court, Talwar has challenged the constitutional validity of sections 19 and 24 of the PMLA, a practice which is recently developed amongst accused involved in large-scale money laundering as well as in serious financial frauds and other related offences," the ED said in the affidavit.

It said it clearly appeared that being conscious of the fact that in regular bail proceedings, factors like gravity of the offence, the amount involved in the offence, the antecedents of the accused etc. would be examined by a competent court in detail, "a subterfuge or a device is craftily designed by the unscrupulous litigants to bypass the said exercise by directly seeking a writ of habeas corpus or by seeking bail/anticipatory bail under the garb of challenging the constitutional validity of some provisions of the Act".

It said the constitutional validity of sections 19 (power of arrest) and 24 (burden of proof) of the PMLA were also challenged before the Delhi High Court in another matter of Rajbhushan Omprakash Dixit, which was then referred to a larger bench by a division bench as there was a difference of opinion with the judgment of another division bench of this court in the Moin Akhtar Qureshi and Vakamulla Chandra Shekhar cases.

While the matter was pending in the high court, an appeal was filed by the agency before the Supreme Court in one of the matters against an interim order and the apex court had transferred all such matters to itself. It said that since the same question, which was challenged here, was pending before the apex court, it was in the interest of justice that the high court should await the final verdict of the Supreme Court.

Talwar has claimed in his plea that when he was in Dubai, a travel ban was imposed on him by a court there in a commercial dispute, due to which he could not return to India despite repeated requests. His counsel had earlier contended before the court that the Government of India had "abducted" Talwar, adding that when there was a summons for him to appear on February 4, he was picked up and there was no extradition.

He has sought to quash of the FIR against him under the PMLA and also to declare some provisions of the Act as unconstitutional and in violation of fundamental rights. The ED had earlier told a trial court that it needed to interrogate Talwar to get the names of officials of the Ministry of Civil Aviation, National Aviation Company of India Ltd and Air India, who favoured foreign airlines, including the Qatar Airways, Emirates and Air Arabia.

The agency had claimed that entities directly or indirectly controlled by the accused received exorbitant amounts from the Qatar Airways, Emirates and Air Arabia and submitted a chart of total USD 60.54 million received by firms directly or indirectly owned by Talwar between April 23, 2008, and February 6, 2009.

Talwar has been accused of criminal conspiracy and forgery under the IPC and under various sections of the Foreign Contribution (Regulation) Act (FCRA) for allegedly diverting foreign funds worth Rs 90.72, meant for ambulances and other articles, received by his NGO from Europe's leading missile manufacturing company. His role in some aviation deals during the previous Congress-led UPA regime is also under the scanner.

(With inputs from agencies.)