Review of SC’s Vijay Madanlal Judgement | Day 2: Petitioner’s grounds don’t meet maintainability threshold, argues ED

ASG: This is not a review, it’s an appeal in disguise

ASG Raju insisted that none of the petitioners’ grounds met the legal threshold for a review. He emphasised that the Court could not reopen a judgment simply because a different view was possible. “This is an appeal in disguise. No review parameter is fulfilled,” he said. “Error apparent must be glaring and self-evident. It cannot involve re-analysis or subjective balancing of views.”

“They are asking this Court to rewrite the VMC judgment, which is simply not permissible,” Raju added. He also expressed concerns about the broader implications of entertaining such reviews. “There will be review petitions at the drop of a hat. There will be no finality.”

A key concern raised in the review petition was the constitutional validity of amending the PMLA through a Money Bill. Raju reiterated that the Vijay Madanlal judgment had consciously declined to examine the issue. He reminded the Court that the Money Bill challenge is currently pending before a seven-judge bench in Rojer Mathew v South Indian Bank Ltd.. “The Court was clear, until the larger bench gives its ruling, we cannot revisit this issue. So what is the basis for seeking a review on that ground?” he asked, adding that a review is not an opportunity to re-argue a lost case. 

“You can’t act like a crook”: Court questions ED’s track record

Despite the ED’s procedural defence, the Bench voiced deep concern over how the law was being implemented on the ground. Justice Ujjal Bhuyan questioned the agency’s investigative outcomes.

“I saw one proceeding where you had registered around 5000 ECIRs and there were less than 10 convictions,” he noted. “We are talking about the liberty of people. If someone spends five or six years in custody and is then acquitted, who is responsible?” He urged the ED to introspect on the quality of its investigations, warning that such outcomes tarnish the institution’s image. “You can’t act like a crook. You have to act within the four corners of law,” he remarked bluntly. He added that this observation was substantiated by a statement made by the Union Minister, Pankaj Chaudhary, in Parliament. “We are also concerned for the image of the Enforcement Directorate,” he said. 

Raju countered that the agency was severely hamstrung by procedural delays often instigated by the accused. “If it is an influential accused, a battery of lawyers appears. Applications are filed one after the other. Poor investigating officers spend more time in court than on investigation,” he said.

Taking note, the Bench reiterated its earlier suggestion for the creation of special fast-track courts, modelled on the fast-track frameworks once used under the Terrorist and Disruptive Activities (Prevention) Act, 1987 and the Prevention of Terrorism Act, 2002, to ensure day-to-day trials and swift disposal of cases. “Yes, influential accused will continue to flood the courts with applications,” Justice Surya Kant noted, “but if trials are held on a daily basis, they’ll know their pleas will be heard and disposed of the very next day… The time has come to hit them hard; we can’t afford to be sympathetic.”

Citing the strain on the lower judiciary, he pointed to a Magistrate who, in one instance, was forced to adjudicate 49 applications in a single day, with each requiring detailed, multi-page orders. “This simply cannot continue,” he said.

Justice Kant raised concerns about the growing use of cryptocurrency in financial crimes, pointing out the regulatory gap that enables evasion. “People are operating different apps and crypto stock exchanges. The government ought to seriously think of regulating it,” he said, referencing a recent remark by Justice Joymalya Bagchi that a time may come when bribes are entirely transacted in crypto, rendering investigations even more complex. Raju noted that the ED often faces hurdles when accused persons move funds offshore or flee to jurisdictions like the Cayman Islands.

ECIRs, scheduled offences and transparency in process

The Court closely examined the ED’s procedures surrounding the Enforcement Case Information Reports under the PMLA. In Vijay Madanlal, the Court held that ED inquiries are distinct from police investigations; therefore, CrPC safeguards don’t fully apply to them. It also ruled that the ECIR is an internal document, not equivalent to an FIR, and need not be shared with the accused.

Traditionally, in criminal investigations, a First Information Report (FIR) is registered to formally commence proceedings. However, in the case of the ED, instead of an FIR, it registers an ECIR, an internal document that outlines the basis of its inquiry.

ASG Raju maintained that the ECIR is not a statutory requirement and is merely an internal document. He argued that its disclosure was not essential for initiating an investigation or arrest. “There’s nothing like an ECIR in law. I can investigate without registering one,” Raju submitted. “The idea behind demanding it is just to see what material the agency has, but we are bound to disclose the grounds of arrest at the appropriate time.”

Justice Singh pressed further: “Suppose someone is arrested before the complaint is even filed, how will they know what case is being made out against them? How can they seek bail or challenge the arrest?” 

Justice Kant added that even in civil proceedings, where criminal action has not been initiated, copies of adverse documents are supplied to the defendant. He asked whether such procedural protections should extend to criminal matters as well.“Is it beyond the scheme of the statute to require this level of disclosure when liberty is at stake?” he asked. Raju replied that grounds and reasons for arrest are communicated and all material is presented to the Magistrate at the remand stage. 

Justice Bhuyan pushed the ED on the legal basis for initiating proceedings in the absence of a formal FIR in the scheduled offence. A scheduled offence is a crime listed in the Schedule of the PMLA, which forms the basis for initiating a money laundering investigation. Justice Bhuyan observed that even without an FIR in a scheduled offence, the ED can begin a civil action. The ASG clarified that while a scheduled offence is essential for launching criminal prosecution under the Act, civil measures such as pre-emptive attachment of property can be triggered even before a formal FIR is filed. This distinction allows the ED to act early in certain cases without breaching procedural boundaries.

The Bench will continue hearing the preliminary issues and decide on the maintainability of the review petition.