By Sanjay Raman Sinha
On August 20, 2026, the Supreme Court reconstituted the bench that will hear a batch of review petitions challenging its own landmark July 2022 judgment in Vijay Madanlal Choudhary vs Union of India. That ruling fundamentally reshaped the enforcement architecture of the Prevention of Money Laundering Act (PMLA), 2002, giving the Enforcement Directorate (ED) a formidable array of powers.
The review petitions, including one filed in Karti P Chidambaram vs Directorate of Enforcement, will now be heard by a three-judge bench, comprising Chief Justice of India (CJI) Surya Kant and Justices Joymalya Bagchi and V Mohana. They replace the earlier combination of the CJI with Justices Ujjal Bhuyan and N Kotiswar Singh.
The reshuffle was procedural. The CJI explained that retaining the earlier combination would have required the unwinding of three other benches because Justices Bhuyan and Singh had since been assigned elsewhere. But the CJI’s decision to seek the concurrence of both sides—the ED, represented by the solicitor general, and the petitioners, represented by senior advocate Kapil Sibal—underscores the significance attached to the proceedings.
The stakes are considerable. If the bench first finds the review petitions maintainable, some of the most stringent provisions of the PMLA could once again come under constitutional scrutiny.
The petitions, including that of Congress MP Karti P Chidambaram, seek reconsideration of the Supreme Court’s 2022 verdict, which upheld the constitutional validity of several provisions that critics regard as exceptionally harsh. Among them are the ED’s sweeping powers of arrest, search, seizure and attachment; the reverse burden of proof that places a substantial onus on the accused; the agency’s practice of not routinely furnishing the accused with a copy of the Enforcement Case Information Report (ECIR); and the stringent twin conditions governing bail.
The petitioners contend that these provisions have profound implications for personal liberty, fair procedure and the presumption of innocence.
THE BAIL BATTLE
At the heart of the review is the PMLA’s twin-condition bail test. Under Section 45, a court must be satisfied, prima facie, that the accused is not guilty of the offence and is unlikely to commit an offence while on bail. Critics argue that this reverses the conventional principles of bail and effectively requires an accused to establish innocence at an early stage of proceedings.
The history of the provision is itself revealing. In 2017, in Nikesh Shah vs Union of India, the Supreme Court struck down Section 45’s twin bail conditions as arbitrary and violative of Articles 14 and 21 of the Constitution. Parliament responded in 2018 by amending the provision and linking the stringent conditions to money laundering itself rather than to the scheduled or predicate offence.
The amendment was also introduced as a Money Bill, a legislative route that became part of the wider controversy surrounding the provision.
In 2022, Vijay Madanlal Choudhary upheld the amended Section 45 and, with it, the architecture of the PMLA that had emerged through successive legislative and judicial interventions. A three-judge bench upheld the ED’s powers of arrest, search, seizure and attachment. It sustained the amended twin-condition bail regime, held that an ECIR need not be supplied to the accused in the same manner as an FIR, and accepted that statements recorded by the ED under Section 50 could be relied upon as evidence. The cumulative effect was to create one of the most formidable enforcement regimes in Indian criminal law.
Subsequent judgments, however, have placed important qualifications on that architecture.
In Pankaj Bansal, the Supreme Court held that a person arrested under Section 19 of the PMLA must be furnished written grounds of arrest. The ruling reinforced the constitutional importance of procedural safeguards and personal liberty.
In Pavana Dibbur, the Court held that where the accused in the predicate offence is acquitted, discharged or the proceedings are quashed, the corresponding PMLA case cannot survive. The judgment also made the significant observation that a person need not necessarily be an accused in the scheduled offence to face proceedings under the PMLA.
In Tarsem Lal, the Court held that the filing of an ED complaint and the issuance of summons do not automatically place an accused in custody, thereby preventing automatic custodial consequences from flowing merely from the filing of a complaint.
Together, these rulings have gradually put constitutional guardrails around a law whose reach expanded dramatically after 2022.
LAW, LIBERTY AND POLITICAL POWER
The broader controversy surrounding the PMLA, however, extends beyond the courtroom.
Over the years, the arrest and prolonged incarceration of politicians and other public figures in money-laundering cases have fuelled allegations that the law and the ED are being used selectively against political opponents. Critics have described the agency as a handmaiden of the ruling establishment, arguing that the extraordinary powers conferred by the PMLA create considerable scope for political misuse.
The government, for its part, points to the ED’s high conviction rate in money-laundering cases that have actually concluded on merits—citing a rate of 94.82 per cent. Critics counter that this figure needs to be viewed against the much larger universe of cases registered and proceedings initiated. They point to figures from a recent five-year period in which more than 4,600 cases were registered, but only 43 resulted in convictions, a figure of less than one per cent of the total cases registered.
The competing statistics illustrate a deeper disagreement: whether the effectiveness of an anti-money-laundering regime should be measured by convictions in completed trials, or by the broader impact of arrests, prolonged investigation and attachment of assets on citizens who may ultimately never be convicted.
The PMLA was enacted in 2002 and came into force in 2005, in the wake of India’s international commitments under the 1988 Vienna Convention and the 1998 UN declaration. It created a framework for attaching and confiscating the proceeds of crime, initially focusing heavily on drug trafficking and organised crime and later encompassing terror financing and a much wider range of scheduled offences. It also formed an important part of India’s international anti-money-laundering obligations.
There is little dispute that financial crime requires a powerful enforcement mechanism. The question is where the constitutional line should be drawn.
The Supreme Court’s review proceedings, therefore, carry implications well beyond the fate of individual petitioners. They could determine whether the extraordinary powers conferred on the ED by the PMLA remain constitutionally sustainable in their present form, or whether subsequent experience and later judicial decisions require a recalibration.
The Court is not being asked to choose between fighting financial crime and protecting individual liberty. Its constitutional task is more exacting: to ensure that the fight against financial crime does not itself erode the principles of due process, equality before law and personal liberty that the Constitution guarantees.
The PMLA review case thus presents the Supreme Court with a difficult but unavoidable question: how powerful can the State become in pursuing financial crime before the machinery of enforcement begins to threaten the very liberties the law is meant to protect?
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