Rs 18,000 crore returned to banks in cases of Mallya, others, Centre tells SC

The court is examining a batch of petitions challenging the wide scope of powers available to the ED

The Centre on Wednesday told the Supreme Court that Rs 18,000 crore have been returned to the banks in the cases of fugitive industrialist Vijay Mallya, and other businessmen Nirav Modi and Mehul Choksi, who faced charges of loan frauds and money laundering.

Solicitor General Tushar Mehta, appearing for the Centre, submitted before a bench presided over by Justice A M Khanwilkar that the total proceeds of crimes in the Prevention of Money Laundering Act (PMLA) cases pending before the top court amounted to Rs 67,000 crore.

"As on date, 4,700 cases are being investigated by the Directorate of Enforcement and the number of the cases taken up for investigation each year in the last five years varied from 111 cases in 2015-16 to 981 in 2020-21," he said.

Mehta made his submission before the court which is examining a batch of petitions, challenging the wide scope of powers available to the ED for search, seizure, investigation, and attachment of proceeds of crime under the law.

During the last five years, only 2,086 cases were taken up for investigation under the PMLA out of registration of FIRs of approximately 33 lakh for predicate offences by the police and other enforcement agencies, he said.

Also read: Concept of offence of money laundering in PMLA is very wide: SC

"A very small number of cases are being taken up for investigation under the PMLA as compared to annual registration of the cases under the Money Laundering Act in the UK (7,900), the US (1,532), China (4,691), Austria (1,036), Hongkong (1,823), Belgium (1,862) and Russia (2,764)," he added.

Mehta maintained that the measures against money laundering have clearly left embryo of drug or terrorism-related offences and moved beyond them. "Further, the efforts against money laundering have consistently advocated to include the widest range of predicate offences in the domestic laws," he said.

A batch of petitions argued by senior advocates, including Kapil Sibal, Abhishek Manu Singhvi, Mukul Rohatgi, Sidharth Luthra, Amit Desai, questioned the validity of stringent measures and potential misuse of the amendments to the PMLA.

The law has been assailed particularly for tough bail conditions, non-communication of grounds of arrest, arrest of persons without supply of complaint, broad definitions of money laundering and proceeds of crime, and statements given by accused during investigation made admissible as evidence during trial.

Mehta, for his part, said, "The validity of the PMLA, 2002 shall have to be judged from the antecedent events which took place globally. The world community has recognised the serious menace of money laundering and its severe impact on the economy, not only of the country in which the predicate offence takes place, but even affecting the economy of other countries where 'proceeds of crime' is laundered."

In offences like money laundering, there are rarely identified victims but the economy of the entire nation eventually became the victim. Prior to 1988, there was no structured legislation dealing with the money laundering and majority of criminal justice systems were familiar with more traditional forms like confiscation and forfeiture and there was no concept of 'proceeds of crime', he added.

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