Chhattisgarh has become the first state to challenge the constitutional validity of the Prevention of Money Laundering Act (PMLA) by filing a suit under Article 131 of the Constitution in the Supreme Court. The Congress-led state government alleges that central investigating agencies are being misused to “intimidate”, “harass” and “disturb” the normal functioning of non-BJP state governments. Private individuals and parties have previously challenged the law on various grounds, but the validity of the law was upheld by a three-judge bench of the apex court last year.
The suit filed by the Chhattisgarh government alleges that the Enforcement Directorate (ED) is “torturing, abusing, and manhandling” officials and residents of the state in the guise of conducting a probe and that the state is being forced to approach the court due to the “blatant and excessive misuse” of powers. The suit cites several instances where the ED has allegedly resorted to an illegal modus operandi, especially with states that hold a political stance opposite to the one in power at the Centre. The suit contends that such conduct amounts to a severe misappropriation and arbitrary use of power, which goes against the constitutional mandate.
The Chhattisgarh government claims that investigative agencies are expected to be entirely independent and uninfluenced and that the misuse of powers by those in power is “intimidating, harassing, and disturbing the normal functioning of an opposition government in the state of Chhattisgarh.” The suit alleges that the central investigation agencies are being misused by those in power to target opposition governments and that the issue is of constitutional importance and requires an urgent hearing.
The bench of Chief Justice DY Chandrachud and Justice PS Narasimha was told by senior advocate Mukul Rohatgi and advocate Sumeer Sodhi, appearing for the Chhattisgarh government, that the matter required an urgent hearing. The bench agreed to take up the matter on May 4.
The suit filed by the Chhattisgarh government seeks the interference of the court under its original jurisdiction bestowed by Article 131 of the Constitution, in light of a dispute that has arisen between the state and defendants — Union of India, state of Karnataka, and Directorate of Enforcement (ED), involving questions of law and facts which affect the legal and constitutional rights of the state. The suit alleges that the ED registered an ECIR dated September 29, 2022, based on the predicate offense of an FIR filed at Kadugodi police station in Bengaluru against a person named Suryakant Tiwari for offenses punishable under various sections of the Indian Penal Code, including assault or criminal force to deter public servant from discharging his duty and destruction of evidence.
The Chhattisgarh government claims that the investigation conducted by the ED has resulted in indiscriminate surveys and raids at various departments and offices of the state government and the arrests of state officials. The suit alleges that the provisions of the PMLA require a criminal investigation process to adhere to the principles of openness, transparency, and established legal procedures. The suit also contends that the amendments made to the provisions of the PMLA through the route of the finance acts of 2015, 2016, 2018, and 2019 are liable to be struck down as they are colorable uses of legislative power and violative of Article 110(1) of the Constitution.