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In a batch of petitions challenging the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) Solicitor General Tushar Mehta on Tuesday submitted before the Supreme Court that in the last 17 years the total number of arrests in the money laundering cases is only 313 due to the existing screening layers that are needed to be passed before arrest.

Upon this, the bench of Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar sought an answer as to whether section 436(a) of the Criminal Procedure Code will have implications on the PMLA offences.

Over the issue of bail in the money laundering cases, Mehta referring to the judgment in the case of Nikesh Tarachand submitted that it was on the premise that the twin condition of bail would, as per the unamended provision, would apply to case of bail, in both predicate and offense of Money Laundering. "To achieve the objective of the Act it has to be kept at a higher threshold," Mehta added.

In addition to this, Mehta submitted that the court should not interfere with a legislative policy unless it is arbitrary. "It was argued that it is not a serious offense and imposes  only 7 years of imprisonment as punishment. Milords, for a white-collar person 7 years punishment is sufficient," Mehta said.

"It is a highly sophisticated offence. There are several platforms available, several softwares available (to delete the trail of the crime). It makes it really difficult for the investigation," Mehta added.

SG Mehta will continue his arguments tomorrow.

Earlier, Mehta had submitted that "PMLA offenses are never committed at the heat of the moment, the offences utilize the most advanced technology and they ensure that the authorities don't find out - and delete the entire trail within minutes if authorities get to know. Unlike IPC (Indian Penal Code) offenses, majority of which are committed and then investigated, money laundering is always a continuing offense."

Mehta had argued that the petitioners' contention that the legislation is not Code of Criminal Procedure (CrPC) compliant, is faulty. He said that it must be constitutionally compliant and need not be CrPC compliant.

In addition to this, Mehta further argued that PMLA is a complete Code whereas, CrPC is a generic law and under CrPC police officers need not record reasons and under PMLA they'll have to give reasons.

Referring to the rules, Mehta submitted that after conviction under money laundering the property and money attached may be returned to the claimant who suffered loss, and that by way of this rule Rs. 18,000 crores have been returned to the banks attached from the absconding businessmen.

Mehta further argued that FATF (Financial Action Task Force) conducts audits, it's 2012 normal evaluation report said that India's money laundering definition isn't consistent with Vienna Convention and the Government complied, as to be compliant, would be necessary for India's international stability.

In addition to this, Sr. Adv. Menaka Guruswamy arguing for the petitioner had submitted that with conviction numbers in PMLA cases being low, appeals by the Enforcement Directorate (ED) should have been higher, however, that is not the case. She cited that in 2010 and 2011, infact, there were no appeals by the ED.

Cause Title: Vijay Madanlal Chaudhary and Ors. vs Union of India & Other