A new three-judge bench of the Supreme Court will hear the review petitions challenging its July 2022 judgment in Vijay Madanlal Choudhary, the ruling that upheld the constitutional validity of several sweeping powers of the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA).
The bench will comprise Chief Justice of India Surya Kant and justices Joymalya Bagchi and V Mohana. The decision to place the petitions before this bench was taken on Thursday after both sides consented to the change in composition.
The matter was earlier listed before a bench comprising CJI Kant and justices Ujjal Bhuyan and N Kotiswar Singh, but the CJI told the parties that reassembling the original bench would require breaking up three others, since justices Bhuyan and Singh now sit elsewhere. Solicitor General Tushar Mehta, appearing for the ED, and senior advocate Kapil Sibal, representing the petitioners, agreed to the new composition. A date for hearing is to be fixed.
The 2022 ruling underwrites almost every coercive step the ED currently takes — from arrest without a prior police case, to attachment of properties before an FIR, to the denial of the Enforcement Case Information Report (ECIR) to accused persons, to the near-impossible bail threshold under Section 45. A review would touch most of it.
PMLA and its powers
The Prevention of Money Laundering Act, 2002, has been the cornerstone of India’s fight against financial crime. The law has undergone a sea-change since it came into force in July 2005, progressively tightening the noose around money laundering.
Amendments in 2009, 2012, 2015, 2018, 2019 and 2023 reflect the country’s hardening stance on illicit wealth, and each round has expanded the ED’s operations — widening the definition of the offence, easing preconditions for attachment and arrest, and stiffening bail.
Much of that hardening was driven by India’s commitments to the Financial Action Task Force (FATF), the global watchdog on money laundering and terror financing. The 2022 judgment placed those commitments at the centre of its reasoning, holding that the amendments were needed to bring Indian law in line with FATF standards.
Also read: SC reconstitutes bench to hear review pleas challenging 2022 PMLA verdict
The 2022 judgment
The Vijay Madanlal Choudhary bench, led by then justice AM Khanwilkar, ratified the ED’s powers clause by clause.
Definition of money laundering. Section 3 of PMLA originally defined the offence as involvement in any process or activity connected with the proceeds of crime — its “concealment, possession, acquisition or use” — and projecting that as untainted property. A 2019 amendment inserted the word “or” between those terms, and petitioners argued that this enlarged the section by making mere possession a crime. The court ruled that Section 3 had a wider reach and captured every process and activity, direct or indirect, in dealing with the proceeds of crime, and was not limited to the final act of integrating tainted property into the formal economy.
Attachment without a police case. Section 5 allows the ED to provisionally attach a property for 180 days on the approval of a senior officer, if there is reason to believe it holds the proceeds of crime. A 2015 amendment removed the earlier requirement that a criminal case must first be registered. Upholding this, the court said the amendment rightly removed a legal impediment that had left proceeds beyond reach during investigation, though further prosecution would still require a base FIR.
Search, seizure and survey. Sections 16, 17 and 18 authorise ED officers to enter premises and carry out searches and seizures, including of property records. A 2019 amendment did away with the earlier requirement to inform a court first. The court held that these were not arbitrary powers, pointing to comparable authority under the Income Tax Act, Customs Act and the erstwhile Foreign Exchange Regulation Act (FERA), and to the safeguards built into PMLA — high-ranking officers must record reasons and forward a report to the adjudicating authority.
Arrest without an FIR. Section 19 lets the ED arrest a person after recording reasons and forwarding a report to the adjudicating authority. The court held that arrest before the filing of a formal complaint was not unusual in special laws, and that the safeguards — informing the person of the grounds of arrest, production before a magistrate within 24 hours — were adequate. It also refused to compel the agency to share the ECIR (ED’s equivalent of an FIR in a police case) with an accused, describing it as an internal document with no statutory requirement of registration.
Statements before ED officers. Section 50 allows an ED officer to summon any person and requires the person to disclose all facts within personal knowledge. The summons carries legal teeth: sub-section (4) of Section 50 deems the proceeding to be a “judicial proceeding”, which means a person who refuses to answer, or gives a false statement, can be prosecuted for perjury. The court rejected the argument that this violated Article 20(3) of the Constitution, which protects against self-incrimination, and held that a person does not become a witness against himself merely by being summoned. It also held that ED officers are not “police” officers for the purposes of the Evidence Act, and that incriminating statements recorded by them are therefore admissible.
Reverse burden and bail. Section 24 presumes an accused is involved in money laundering unless the contrary is shown. Section 45 imposes twin conditions for bail: the prosecution must be heard, and the court must be prima facie satisfied that the accused is not guilty and unlikely to reoffend. The court upheld both, saying the twin condition was a legislative response to an earlier judgment that had struck it down, and that money laundering could not be considered less severe than terrorism.
Also read: SC to hear review pleas against 2022 verdict upholding ED’s powers in money laundering cases
The evolution since 2022
Barely a month after the 2022 judgment, another three-judge bench admitted a clutch of review petitions and agreed to reconsider at least two aspects — the denial of the ECIR to the accused, and the shifting of the burden of proof from the prosecution to the accused.
Meanwhile, the court has interpreted PMLA in other cases.
In August 2023, deciding former Tamil Nadu minister V Senthil Balaji’s medical bail plea, the court cautioned against casual use of section 19 arrest powers and held that magistrates were obliged to release an arrested person immediately if procedural or substantive rules had been broken.
In October 2023, a two-judge bench took a view directly at odds with the 2022 ruling and held that the ED must furnish written grounds of arrest to the accused. Mere oral communication, the bench said, would be a breach of the constitutional right under Article 22(1). The 2022 judgment had treated oral information as “sufficient compliance”. The Centre and the ED sought a review of that October 2023 ruling; it was later rejected.
In November 2023, in Pavana Dibbur, the court closed off another avenue used by the ED, holding that criminal conspiracy under Section 120B of the Indian Penal Code could not by itself trigger a money laundering probe unless the conspiracy related to an offence already on PMLA’s scheduled list. Karnataka deputy chief minister DK Shivakumar had a case against him quashed on that reasoning.
In 2024, granting bail to former Delhi deputy chief minister Manish Sisodia, the court held that the right to a speedy trial was a fundamental right that could override the Section 45 twin bail condition. “When the trial is not proceeding for reasons not attributable to the accused,” the bench said, “the court, unless there are good reasons, may well be guided to exercise the power to grant bail.”
In April 2024, the court granted bail to Aam Aadmi Party leader Sanjay Singh after the ED chose not to contest his release, following six months in custody without solid evidence of his involvement.
Each of these rulings sat uneasily with the 2022 verdict, and each turned on constitutional safeguards the review petitioners now want reopened.
What the review will litigate
The first hurdle is maintainability. In July 2025, the court had indicated it would decide whether the review petitions were maintainable at all before touching the substantive grounds. The ED has argued that no “error apparent on the face of the record” has been shown, and that the petitions in effect seek to re-argue the case as an appeal — impermissible in review jurisdiction. The agency also relied on the court’s August 25, 2022 order to contend that only two aspects were ever open for reconsideration: the supply of the ECIR, and the reverse burden clause governing bail.
The petitioners, led by senior advocates Sibal and Abhishek Manu Singhvi, want a much wider re-examination. They have placed before the court a list of 13 questions.
Among them: the retrospective application of PMLA to offences that pre-date its coming into force; the classification of ED officers as non-police personnel, which is what makes their recorded statements admissible; and the validity of Section 50, which the petitioners argue can compel self-incriminating disclosures. Congress MP Karti P Chidambaram is among those who have filed review petitions.
If the bench accepts the wider frame, the review will effectively reopen the constitutional foundations of the ED’s operating manual.
