The Prevention of Money Laundering Act of 2002 (PMLA) is a crucial legislation in India's battle against economic offenses, passed as a result of global undertakings under agreements like the Vienna and Palermo Conventions, and backed up by India's compliance requirements with the Financial Action Task Force (FATF).

The Act has, over time, conferred significant powers on the Enforcement Directorate (ED), including arrest without complaint, reversal of the burden of proof, acceptability of statements made during investigation as evidence, and a coercive bail regime under Section 45. The aforementioned regulations raise very serious constitutional challenges, especially impinging upon the guarantees of the rights of equality, personal liberty, and self-incrimination under Articles 14, 19, and 21 of the Indian Constitution.

This essay examines critically the latent tension between constitutional protections and enforcement mechanisms of the PMLA. It puts the law into perspective within the larger international struggle to stem money laundering associated with drug trafficking as well as the financing of terror. Specific emphasis is placed upon the provisions under Section 45 regarding bail whose development mirrors the larger discourse over state security vs. civil rights. The research assesses how courts have responded to this tension, with greater focus on procedural fairness, accused persons' health conditions, delay in trials, and the principle of parity.

The article further explores the legal and constitutional implications of rules covering attachment of assets, presumptions of guilt, and admissibility of statements recorded during investigation. Recent judicial interpretations indicate growing willingness to bring enforcement methods into line with constitutional principles such as natural justice, procedural due process, and rule of law. Thereafter, the paper calls for a rights-based and balanced enforcement of the PMLA. It recommends judicial and legislative reforms for aligning effective money laundering prevention goals with liberty, equality, and justice being the core values of the Constitution.

Introduction
In combating money laundering and associated financial crimes, the Prevention of Money Laundering Act, 2002 (hereinafter referred as "PMLA") holds a central position within India's legal framework for regulating financial misconduct and tackling cross-border economic offences. As financial systems grow more sophisticated and interconnected, the effectiveness and legal soundness of such legislative instruments warrant close and continual scrutiny. PMLA places stringent compliance obligations on banks, financial institutions, and intermediaries, requiring them to verify the identity of their clients and maintain detailed records of transactions.

Among the key features of the PMLA are its rigorous bail conditions, the power to arrest individuals without registering an Enforcement Case Information Report (ECIR), the authority to withhold from the accused the reasons for arrest, the admissibility of statements made during investigation as substantive evidence, and the Act's expansive definitions of "money laundering" and "proceeds of crime."

While these provisions are intended to bolster enforcement capacity and deterrence, critics contend that the expected improvements in conviction rates have not materialized. Instead, they argue that successive amendments have resulted in a procedural regime that undermines individual rights by eroding constitutional safeguards and circumventing the due process protections embodied in the Code of Criminal Procedure.

Historical Evolution
The word "Money Laundering" came from Mafia groups in the US used laundromats to disguise their dirty money. By extorting money, prostitution, gambling, and bootlegging, gangsters accumulated huge amounts of cash. They invested in legitimate businesses and mixed illegal and legal profits to legitimize these funds. However, the term "Money Laundering" was originally published in newspapers covering in the year 1973 Watergate scandal in America, and therefore it is quite a recent concept.

In 1982, it was also recognized by a court of law in the case of United States v. $4,255,625.39 (1982)[1]. Since that time, the phrase has become a standard usage and is nowadays employed frequently everywhere throughout the globe. The 1980s witnessed an unprecedented rise in interest in money laundering as a criminal activity, primarily in the context of drug trafficking. The massive profits this illegal business brought and the increasing drug abuse issue in Western nations became increasingly evident to governments. Legislation that would deprive drug traffickers of their illegal funds was enacted as a consequence of this concern.

In India, Hawala transactions, which came into widespread prominence in the early 1990s when several politicians were associated with connected scandals, are often associated with money laundering. An unofficial or parallel remittance method known as hawala facilitates easy conversion of black money to white money. "Hawala" is an Arabic term used to refer to the transfer of money or information between two individuals through a go-between. This system has been centuries old and was even utilized historically by Arab merchants to avoid theft, pre-dating contemporary Western banking systems.

The Foreign Exchange Regulation Act (FERA), 1947 was the initial legislation to authorize the central government to oversee foreign exchange operations. It adapted financial provisions from India's Defence of India Rules on exchange control and was amended to improve clarity and effectiveness. The Act put restrictions on money and gold import, as well as export revenues regulations, mainly targeting exchange control.

FERA was established to harmonize with global agreements, so as to avoid capital flight and curb speculative transactions between the states. Thereafter, The Benami Transactions (Prohibition) Act, 1988 empowered the competent authorities to confiscate properties in benami possession if the title holder could not prove the source of acquisition. Subsequently, the Foreign Exchange Management Act (FEMA) of 1999 replaced FERA, moving from a strict control regime to a more open and regulated system.

In contrast to FERA, FEMA brought in a system of filing returns with the concerned authorities by individuals and companies instead of obtaining prior approval for transactions. The other legislative steps taken to counter money laundering were the Narcotic Drugs and Psychotropic Substances Act, 1985, and the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988.

But these laws were found to be inadequate in addressing changing financial crimes, and therefore the Prevention of Money Laundering Act (PMLA) was enacted in 2002, Which became effective w.e.f. July 01, 2005, in line with India's international commitments inter alia under the Vienna Convention, 1988 and Palermo Convention, 2000, Forty Recommendations etc. Even after its launch, PMLA was already obsolete when implemented, as it did not go far enough to tackle the increased sophistication of money laundering offenses.

Some of the major advancements in India's anti-money laundering structure were the formation of the Financial Intelligence Unit - India (FIU-IND) and the Prevention of Money Laundering (Amendment) Act, 2008, which attempted to enhance the surveillance and enforcement systems. FIU-IND was largely tasked with monitoring Cash Transaction Reports (CTR), Suspicious Transaction Reports (STR), and Counterfeit Currency Reports (CCR).

On April 17, 2008, India changed its anti-money laundering legislation to conform to international standards, paving the way for its inclusion in the Financial Action Task Force (FATF)-an intergovernmental agency that issues international guidelines on combating terrorism financing and anti-money laundering. India has been enforcing requisite regulatory steps since 2009 in anticipation of FATF compliance. This membership considerably enhanced India's capability to monitor black money laundered in offshore tax havens, with the ability to access vital financial information from nations like China, Switzerland, the United States, and the United Kingdom.

The Architecture of PMLA and Its Constitutional Faultiness

The structure of the Prevention of Money Laundering Act, 2002 (PMLA) has been subjected to extensive constitutional examination, especially in the context of the Indian Constitution's Golden Triangle-Articles 14, 19, and 21. These three provisions are the pillars of citizens' rights, which guarantee equality before law, freedom of trade and profession, and protection of life and personal liberty, respectively.

The PMLA, with its extensive enforcement powers, reversal of onus of proof, stringent bail conditions, and power to attach property in advance of conviction, poses grave concerns on arbitrariness, procedural fairness and proportionality. The Act is criticized for unduly limiting basic rights in the course of combating economic offense and thereby denying the test of rationality as well as due process. Though the Supreme Court confirmed most provisions of the PMLA in Vijay Madanlal Choudhary v. Union of India (2022), it also indicated that care would be needed in balancing on one hand the objectives of national security and economic integrity, and on the other, the constitutional entitlements in terms of the Golden Triangle.

1. Personal Liberty and the Bail Paradigm: Article 21 in Crisis
   Article 21 of the Indian Constitution guarantees that:
   "No person shall be deprived of his life or personal liberty except according to the procedure established by law."
   This provision acts as a shield against arbitrary action by the state. However, several provisions of the Prevention of Money Laundering Act, 2002 (PMLA) substantially restrict personal liberty, particularly in relation to arrest, detention, and bail.
   
   One of the most contentious features of the PMLA is the reversal of the burden of proof under Section 24, which presumes the guilt of the accused until proven otherwise. This undermines the foundational principle of criminal law that every individual is presumed innocent until proven guilty. This presumption significantly impacts the bail process under Section 45, which imposes a "twin test": the court must be satisfied that:
   
   1. the accused is not guilty of the offence, and
   2. is unlikely to commit any offence while on bail.
   
   These conditions make securing bail exceedingly difficult, raising serious concerns under Article 21.
   
   In Nikesh Tarachand Shah v. Union of India (2017)[2], the Supreme Court held that Section 45(1) was unconstitutional for violating Articles 14 and 21. The Court ruled that the bail conditions were arbitrary and discriminatory when compared to general criminal law. In response, the legislature amended the provision, reintroducing the stringent twin conditions.
   
   In Enforcement Directorate v. Kapil Wadhawan (2020)[3], the Supreme Court acknowledged the gravity of money laundering as a threat to national security and economic integrity, justifying stricter provisions. Nevertheless, it emphasized the continued relevance of procedural fairness and the need to uphold constitutional values.
   
   The issue of preventive detention was also examined in P. Chidambaram v. Directorate of Enforcement (2019)[4], where the Court reiterated that any restriction on personal liberty must comply with constitutional safeguards and cannot be arbitrary. More recently, in Vijay Madanlal Choudhary v. Union of India (2022)[5], the Supreme Court upheld the ED's wide-ranging powers of search, seizure, and arrest. While the Court reasoned that such powers are necessary to counter the global threat of money laundering, the judgment has attracted significant criticism for diluting personal liberty and weakening procedural safeguards, raising fresh concerns under Article 21.
    
2. Doctrine of Equality and PMLA's Distinct Procedural Class
   Article 14 of the Indian Constitution guarantees the right to equality before the law and equal protection of the laws. It mandates that all individuals must be treated alike under similar circumstances. However, the Prevention of Money Laundering Act, 2002 (PMLA) has come under scrutiny for creating a discriminatory legal regime that treats accused persons under the Act differently from those prosecuted under ordinary criminal law.
   
   A key point of contention is the distinct and harsher procedural framework under the PMLA. By reversing the presumption of innocence and placing an onerous burden on the accused, the Act creates a separate class of offenders, effectively undermining the equal treatment principle. In Karti P. Chidambaram v. Directorate of Enforcement (2019), the Delhi High Court questioned whether the stringent provisions of the PMLA unjustifiably discriminate against those charged under it. While the Court acknowledged that economic offences may warrant stricter enforcement, it emphasized that such measures must not encroach upon fundamental rights.
   
   The power of pre-trial attachment and seizure of property under Sections 5 and 8 of the PMLA further exacerbates concerns. These provisions allow the Enforcement Directorate (ED) to attach property at a preliminary stage, even before a formal charge or conviction. In B. Rama Raju v. Union of India (2011)[6], the Andhra Pradesh High Court cautioned that such powers must be exercised in a constitutionally compliant manner, warning against arbitrary application that could violate Article 14.
   
   Procedural fairness in search and seizure operations under Section 17 has also been challenged. In Tofan Singh v. State of Tamil Nadu (2020)[7], the Supreme Court highlighted the need for strict procedural safeguards when admitting statements recorded during investigation, reinforcing that investigative powers should not override individual liberties. The judgment emphasized the need to balance law enforcement objectives with constitutional protections.
   
   Further, in Ramesh B. Karia v. Union of India (2022)[8], the Gujarat High Court examined whether the procedural differences in dealing with PMLA offences were justified. The Court acknowledged the seriousness of economic crimes but reiterated that constitutional guarantees cannot be set aside, even in the face of grave offences. These judicial observations underscore the ongoing tension between the PMLA's stringent enforcement regime and the constitutional promise of equality.
   
   While the objective of combating money laundering is undoubtedly important, it must not come at the cost of arbitrary classifications and procedural inequality. The courts have repeatedly stressed that legislative responses to economic crimes must remain within the bounds of constitutional fairness and due process.
    
3. Article 19 (Freedom of Trade & Business) vs. Asset Freezing and Seizure
   The present judicial argument reflects the dichotomy between subjecting strict anti-money laundering procedures and upholding constitutional safeguards. Although the courts have repeatedly underscored the severity of money laundering allegations, they have also emphasized the need to ensure the safeguarding of inherent rights, such as the right to equality under Article 14.
   
   The Prevention of Money Laundering Act, 2002 (PMLA), enacted for curbing money laundering and other financial crimes, mandates strict punishments in the form of asset freeze and seizure. Such provisions are often at odds with Article 19(1)(g) of the Indian Constitution, granting the fundamental right to practice any profession, occupation, trade, or business. Although the state can under Article 19(6) impose reasonable restrictions in the public interest, the sweeping powers granted by the PMLA have led to significant judicial challenges.
   
   Section 5 of the PMLA empowers the Enforcement Directorate (ED) to provisionally attach properties suspected of being used for money laundering. In addition, Section 8 provides for the expropriation of such assets after due adjudication. These regulations, though meant to curb economic crimes, have raised constitutional concerns regarding their proportionality and objectivity. In K.S. Puttaswamy v. Union of India (2017)[9], the Supreme Court emphasized that any limitation of fundamental rights needs to be proportionate. This principle demands that the state actions be necessary and the least restrictive means of doing so. But the provisions of the PMLA relating to the attachment of assets have been faulted for lacking proper safeguards, risking a breach of Article 19(1)(g).

A significant case discussing this conflict is Nikesh Tarachand Shah v. Union of India (2017), where the Supreme Court struck down Section 45(1) of the PMLA, which had imposed stringent bail conditions, as being unconstitutional. The Court held that the provision was patently arbitrary and contravened the canons of Articles 14 and 21. Although this ruling did not challenge Article 19 directly, it did highlight the excessively wide and disproportionate character of PMLA provisions, casting doubts on their impact on corporate liberty.

Additionally, in Gautam Kundu v. Directorate of Enforcement (2015)[10], the Supreme Court upheld the power of the ED to attach and seize property but reiterated the necessity of due process. The Court emphasized that, although preventing money laundering is essential, it should not override fundamental rights, and procedural fairness must be ensured.

Judicial Interpretation and Evolution

In 2022, the Supreme Court had upheld the constitutional validity of several provisions of the Prevention of Money Laundering Act, 2002 (PMLA), pertaining to powers of the Directorate of Enforcement (ED) in relation to arrest and seizure, presumption of innocence, and stringent bail conditions in Vijay Madanlal Choudhary v. Union of India, 2022[11].

We take a look at the major judgements of the Supreme Court from 2023 in order to understand how the Court has interpreted the contours and scope of the powers of the ED, and has attempted to strike a balance with the fundamental rights of the accused.

1. Bail as a Rule, Jail as an Exception
   The principle of "bail is the rule and jail is the exception" has been repeatedly reaffirmed by the Indian judiciary, particularly in the context of Article 21 of the Constitution, which provides for the right to life and personal liberty. In spite of this basic premise, recent trends under the Prevention of Money Laundering Act of 2002 (PMLA), i.e., Section 45, have given rise to constitutional and jurisprudential controversy. Section 45 of the PMLA categorically lays down the 'dual requirements' for bail.
   
   These conditions mandate that the court be convinced that:
   
   1. there are reasonable grounds to believe that the accused is not guilty of the offence, and
   2. the accused will not commit a further offence while on bail.
   
   Significantly, this provision shifts the burden of proof to the accused, a radical departure from the norm under the Code of Criminal Procedure (CrPC), under which the prosecution must prove that the accused is likely to repeat crimes. This legislation design reflects the government's effort to institute a zero-tolerance policy toward money laundering.
   
   Money laundering is also viewed as a major threat to national security and financial stability, particularly when linked with terror financing and cross-border offenses. The Finance Act of 2018, which brought back the earlier declared unconstitutional Section 45, aimed at aligning local legislation with international obligations under the Palermo Convention and Financial Action Task Force (FATF) standards.
   
   In Nikesh Tarachand Shah v. Union of India, the Supreme Court held Section 45 to be illegal as it contravened Article 21. The Court argued that denying bail on such strict terms amounted to deprivation of personal liberty without due procedure of law. The Court highlighted the necessity of constitutional checks on legislative overreach. This judicial approach was contradicted with legislative opposition through the 2018 amendment.
   
   The provision was not only reinstated but was also extended to include all PMLA offenses, irrespective of gravity. In response, the Supreme Court in Vijay Madanlal Choudhary v. Union of India upheld the legality of the amended Section 45, citing the seriousness of the offense of money laundering. The Court emphasized strict measures to deter economic offenses, even though they deviated from conventional bail jurisprudence.
   
   Although Section 45 was upheld, the judiciary has kept interpreting it against evolving constitutional mores. In Prem Prakash v. Union of India[12], the Supreme Court adopted a more balanced view. Although it did not consider the clause unlawful, it interpreted it in light of clause 436A of the CrPC (now Section 479 of the BNSS), permitting conditional bail if the accused had been in custody for most of the maximum allowed sentence. In Vijay Nair v. Directorate of Enforcement[13], the Delhi High Court insisted on prioritizing Article 21 over adamant legislative conditions.
   
   The Court emphasized the necessity of stringent measures to deter economic offences, even if such measures deviated from traditional bail jurisprudence. Despite the upholding of Section 45, the judiciary has continued to interpret it in light of evolving constitutional standards. In Prem Prakash v. Union of India, the Supreme Court adopted a more balanced approach. While it did not declare the section unconstitutional, it interpreted the provision in consonance with Section 436A of the CrPC (now Section 479 of BNSS), thereby allowing for conditional bail if the accused has undergone detention for a significant portion of the maximum prescribed sentence.
   
   Thereafter, In Vijay Nair v. Directorate of Enforcement, the Delhi High Court underscored the primacy of Article 21 over stringent statutory provisions. The petitioner had already spent over 22 months behind bars without being brought to trial. The Court declared prolonged pre-trial incarceration without trial is a violation of personal freedom. Referencing comparative contexts in co-accused Manish Sisodia, whom the Supreme Court had permitted on the very same grounds of bail, the Court asserted the ideals of justice could not be compromised at the altar of process stringency. Likewise, in Ajay Ajit Peter Kerkar v. Directorate of Enforcement[14], the Supreme Court dealt with the accused's detention for over three and a half years without trial.
   
   The Court prolonged the accused's bail under Section 436A CrPC and reaffirmed that the right to speedy trial is an elementary right under Article 21.This ruling maintained the validity of CrPC provisions even in the case of PMLA, setting the precedent for treatment of under-trial prisoners more humanely. In the 2024 case of V. Senthil Balaji v. Deputy Director, Directorate of Enforcement[15], the Court once again highlighted the unwarranted delay in the trial process.
   
   With 2500+ accused and 1500+ witnesses, the trial was to take years. The appellant had already spent over 15 months in detention. The Court held that prolonged detention would be against his fundamental rights and therefore allowed him bail despite the seriousness of the accused offense.
   
   There is a clear clash between the legislature and the court. Although the courts have traditionally endeavored to uphold people's fundamental rights, more so their right to liberty, the legislature has consistently emphasized the necessity of stringent bail conditions to fight money laundering. In Tarachand and Prem Prakash, the judiciary had acknowledged liberty as a revered virtue and had pleaded for a detailed, case-by-case approach.
   
   By contrast, the focus of the legislature on uniform enforcement of the twin conditions irrespective of the nature or extent of the violation reflects its policy of zero tolerance. This pull of struggle raises serious constitutional and jurisprudential concerns. Does legislative intent prevail over basic rights? Can a one-size-fits-all policy be applied to all money laundering offenses? These are issues that have to be addressed and decided upon urgently.
   
   There has never been a greater need for a balanced approach. Although the seriousness of money laundering cannot be overstated, it is equally important to ensure that innocent individuals are not subjected to indefinite and arbitrary detention. The solution could be to rank PMLA offenses according to their seriousness. Less serious offenses do not need to be treated with the seriousness that terror financing and mass corruption cases require. Courts need to be able to hear each case in its own right. The gravity of the charges, the risk of tampering with evidence, the risk of absconding, and humanitarian factors such as health should all be taken into account.
   
   It must be considered as per P. Chidambaram v. Directorate of Enforcement while refusing to grant bail by courts that, along with considering the nature of the offense and the severity of punishment, legislature amendments should also be taken into account to make Section 45 flexible. The clause should facilitate the power with judges to apply discretion where case requirements demand diverging from twin standards. This would not only harmonize the statute with constitutional values, but it would also ease the Supreme Court's burden, which is presently compelled to handle routine bail proceedings because lower courts are afraid to interpret strict provisions.
    
2. Self-Incrimination and Admissibility of Statements Under PMLA
   The right against self-incrimination is a fundamental safeguard enshrined under Article 20(3) of the Indian Constitution, which states that no person accused of an offense shall be compelled to be a witness against themselves. This principle plays a crucial role in ensuring a fair trial and protecting individuals from coercive investigative methods. In the context of the Prevention of Money Laundering Act (PMLA), 2002, a key legal question has been whether statements recorded under the Act are admissible in criminal trials, especially when obtained under the compulsion of law. The Supreme Court has addressed this issue in several landmark cases, with Tofan Singh v. State of Tamil Nadu (2020) being a seminal judgment in this regard.
   
   In Tofan Singh v. State of Tamil Nadu (2020), the Supreme Court held that statements recorded by officers under Section 67 of the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985 are not admissible as confessions in criminal trials. The Court ruled that officials under special laws like NDPS or PMLA do not have the same status as police officers under the Criminal Procedure Code (CrPC), thereby making such statements inadmissible under Section 25 of the Indian Evidence Act, 1872. This ruling had a significant impact on similar provisions under PMLA, as the Enforcement Directorate (ED) officers exercise investigatory powers akin to those of police officers. The judgment reaffirmed that any statement obtained under coercion, duress, or without proper legal safeguards cannot be used as evidence to convict an accused.
   
   Further strengthening the right against self-incrimination, the Supreme Court in Prem Prakash v. Union of India examined whether statements made under Section 50 of PMLA could be used against an accused in a criminal proceeding. The Court reiterated the importance of Article 20(3) and observed that a person facing investigation cannot be compelled to make self-incriminating statements that may later be used to establish guilt. The Court also clarified that while ED officers have wide-ranging investigative powers under PMLA, they cannot act in a manner that infringes upon the constitutional protections guaranteed to an accused. The ruling emphasized that any statement obtained without the necessary procedural safeguards would violate the principles of natural justice and fair trial.
   
   The impact of these judgments extends beyond individual cases, as they establish important precedents concerning the limits of investigative agencies' powers. The Supreme Court has consistently held that the provisions of special laws like PMLA should not override fundamental rights, particularly those enshrined under Articles 20 and 21. By reinforcing the principle that confessions obtained under compulsion are inadmissible, these rulings serve as a crucial safeguard against abuse of power and protect individuals from being forced into self-incrimination.
   
   In conclusion, the Supreme Court's interpretation of Article 20(3) in Tofan Singh and Prem Prakash has reaffirmed the inviolable nature of the right against self-incrimination. These rulings restrict the admissibility of statements obtained under coercive circumstances and ensure that investigative agencies do not violate constitutional protections. By setting clear legal precedents, the Court has upheld the rule of law and the fundamental rights of individuals accused under PMLA, reinforcing that the right against self-incrimination remains an essential pillar of India's criminal justice system.
    
3. Procedural Due Process in Asset Seizure: Article 300A and Judicial Oversight
   The idea of protecting people from arbitrary and unjustified seizures of assets has come a long way in Indian law. Article 300A of the Indian Constitution states that no person shall be deprived of their property except by law. This is provided for by legal and judicial restraints, in the form of Sections 451 and 457 of the CrPC 1973, respectively relating to custody and disposal of property during the stage of inquiry and trial.
   
   These legislative forums place emphasis that seizure should always be legal, justifiable, and reasonable. The Prevention of Money Laundering Act of 2002 (PMLA) provides that property used for money laundering may be seized and confiscated by authorities. Nevertheless, this has raised serious due process concerns as well as concerns of abuse. Judicial interpretations have placed growing emphasis on the fact that such powers have to be exercised within constitutional limits and not in derogation of natural justice.
   
   In Gautam Navlakha v. National Investigation Agency (2021)[16], the Supreme Court strongly relied on judicial supervision and procedural equity in every degree of liberty deprivation, even house arrest. The case being focused on individual liberty, it still highlighted the generalized constitutional principle that any entry into basic rights shall be strictly under judicial examination-a principle similarly applicable to seizure of assets under PMLA.
   
   In a similar vein, in Maneka Gandhi v. Union of India (1978)[17], the Court established the "golden triangle" of Articles 14, 19, and 21, opining that any action by the state that impacts life, liberty, or property must be fair, just, and reasonable. This judgment has been seminal in shaping the debate on procedural guarantees in cases of seizure and confiscation. In K.K. Baskaran v. State of Tamil Nadu (2011)[18], the Supreme Court held that any denial of property without sufficient legal authority and rationale is unconstitutional.
   
   The case pertains to the confiscation of assets in a financial scam, and the Court stressed the necessity of legal and factual grounds for such confiscation. Another important judgment, Mafatlal Industries Ltd. v. Union of India (1997)[19], held that the state cannot enrich itself unjustly by seizing revenue or property without a proper legal justification. While the case concerned tax refunds, the underlying assumption can be applied to PMLA cases where property is seized without due process.
   
   In the case of District Collector, Hyderabad v. Ibrahimpatnam Taluk Vyavasaya Coolie Sangham (2003)[20], the Court reinforced that any attachment or confiscation of property must be backed by statutory authority and adhere to principles of procedural justice. This further solidified the legal position against arbitrary state action. In B. Rama Raju v. Union of India (2011), the Andhra Pradesh High Court considered the constitutional validity of PMLA provisions concerning attachment of property. Upholding the regulations, the Court emphasized the need for procedural protections like notice and the right to be heard prior to any action of confiscation.
   
   Likewise, in Seema Silk and Sarees v. Directorate of Enforcement (2008)[21], the Delhi High Court ruled that the power to freeze bank accounts must be exercised cautiously and with actual evidence. The Court reversed the freezing orders where there is no significant relationship between the accounts and the offense under investigation, pointing out that suspicion alone is not enough. In Bhavesh Jayanti Lakhani v. State of Maharashtra (2009)[22], the Supreme Court highlighted the need for a balance between societal interests in economic offenses and individual rights. The accused must not be deprived of rights without proper legal procedure.
   
   The jurisprudence of law relating to seizure of assets, especially in the context of the Prevention of Money Laundering Act, 2002 (PMLA), categorically holds that though power is given to the State to check white-collar economic crimes and safeguard national security concerns, the same must be exercised strictly within the parameters of the Constitution, subject to the watchful eye of judicial oversight and in accordance with procedural protection which are non-discretionary formalities but obligatory constitutional mandatories.
   
   Courts have time and again asserted that every coercive measure by the executive, especially one entailing deprivation of property, should be premised on reliable evidence, accompanied by proper documentation, and articulated in a reasoned and speaking order, making the process transparent and accountable. The cardinal principles of natural justice-audi alteram partem and rational decision-making-are deeply ingrained in the Indian constitution and continue to form the core of the legitimacy of the asset attachment processes.
   
   Judicial review is a vital curb on executive overreach, and any deviation from established legal procedure will probably be reversed for breaching Articles 14, 21, and 300A of the Constitution. Article 300A, specifically, sets the constitutional foundation for property rights by mandating that no one be deprived of their property except by authority of law-a provision that necessarily includes the requirements of due process and legitimacy.
   
   The fine line between permitting the state to fight grave crime such as money laundering, financing of terror, and other unlawful activities and safeguarding the rights of individuals against any arbitrary or excessive action by the state has to be preserved by tenaciously following statutory procedure and judicially formulated norms.The Code of Criminal Procedure, 1973, specifically Sections 451 and 457, fortifies the procedural system by controlling the custody and disposal of property under seizure during investigation and trial so that property is not withheld or disposed of without a judicial order.
   
   The Supreme Court judgments in Maneka Gandhi v. Union of India and Vijay Madanlal Choudhary v. Union of India have reasserted the stand that any invasion into individual liberty or property needs to pass the test of fair, just, and reasonable procedure, and the power to seize or freeze assets, though existing under laws such as the PMLA and the Unlawful Activities (Prevention) Act ("UAPA"), cannot circumvent the constitutional requirement of fairness. Although retaining numerous aspects of the PMLA, the Court also placed great weight on protections like the right to be heard, the existence of avenues of appeal, and the need for recording of reasons for attachment.
   
   When these procedural anchors are left out or disregarded, the entire seizure process becomes vulnerable to constitutional attack. After all, asset forfeiture procedures have to be effective as well as legitimate; invoking national interest or statute cannot exempt executive action from the judiciary's judgment. Courts have always upheld the view that State interests however cogent they may be could override individuals' inherent rights unless the deprivation finds support in a proper statute acceptable under the requirements of the constitution.
   
   In addition, jurisprudence has progressed to acknowledge a multifaceted appreciation of the State's dual mandate: to prevent economic offenses and uphold the rule of law. In this regard, courts have also held that the mere filing of proceedings under statutes like the PMLA does not justify the indefinite sequestration of property, particularly when the offense underlying the proceeding has not yet been established or when the accused is deprived of an effective opportunity to challenge the seizure.
   
   This concern is exacerbated by the procedural imbalances inherent in these special statutes, giving enforcement agencies sweeping powers with insufficient initial oversight. The judiciary plays a very significant function in upholding constitutional values such as equality before law, procedural fairness, and protection against arbitrary deprivation. The general idea is that deprivation of property should be legitimate in form and reasonable and fair in content. Consequently, the developing jurisprudence manifests a steady judicial resolve to uphold the principle that no asset, however tainted on the surface it may seem, can be seized or confiscated for good unless the procedure complies with canons of natural justice, is compliant with statute, and stands up to judicial scrutiny.
    
4. Right against prolonged incarnation
   The Supreme court in the case of Laxmikant Tiwari vs. Directorate of Enforcement[23] bench comprising of Hon'ble Mr. Justice Abhay S. Oka & Hon'ble Mr. Justice Augustine George Masih in the matter pertaining to the arrest of appellant in connection with an Enforcement Case Information Report (ECIR) and a complaint u/s 44. Of PMLA. Original 1st Fir alleging offences u/s 186,204, 353, and 120-B of IPC, out of all these sections only section 120-B is a Scheduled offense under PMLA, However, Supreme Court in Its Judgment Pavana Dibbur vs. Directorate of Enforcement, 2023[24] held that section 120- b Doesn't constitute schedule offence unless or until there is conspiracy to commit a schedule offense is specifically alleged. Subsequently section 383 (extortion) was added based on the FIR.
   
   The Supreme Court, after examining the matter, observed that when the charge sheet was filed on June 8, 2023, no scheduled offense was in existence. The subsequent FIR registered in Chhattisgarh on January 17, 2024, followed by the charge sheet on July 19, 2024, could not retrospectively validate the initiation of the PMLA proceedings. Given the prolonged period of incarceration and the peculiar facts of the case, the Court found that continued detention would amount to a violation of the appellants' rights under Article 21.
   
   Consequently, the Supreme Court granted bail to both appellants for the offense under Section 4 of the PMLA. The Special Court was directed to release them on appropriate bail conditions after hearing the Enforcement Directorate. The Court clarified that its observations were limited to the consideration of bail and would not influence the merits of the case.
   
   Similarly, In Vijay Nair vs Directorate of Enforcement after considering the Facts and materials Court reaffirmed the inviolable nature of the right to liberty under Article 21 of the Constitution, stressing that stringent provisions of special laws should not override fundamental rights. It observed that the petitioner had been in custody for over 22 months without the commencement of trial, highlighting concerns over prolonged incarceration.
   
   In support of its reasoning, the Court referred to the case of co-accused Manish Sisodia, where bail had been granted on similar grounds of excessive pre-trial detention and trial delays. While acknowledging the prosecution's reliance on Vijay Madanlal Choudhary v. Union of India, the Court also cited several rulings that had relaxed the conditions under Section 45 of the Prevention of Money Laundering Act (PMLA) in cases involving extended pre-trial detention. Emphasizing that bail should not be denied as a form of punishment, the Court reiterated the well-established principle that bail is the rule and jail is the exception.
   
   Similarly in the case of Prem Prakash vs Union of India Through directorate of Enforcement under para 12 court held that it is the infringement of fundamental right of a person to hold him behind the bars for an unlimited time in the hope of speedy trial additionally held that the statement of co-accused to implicate accuse/ co-accuse is inadmissible.
    
5. Right to Fair Trial and Emergence of Due Process Standards
   The right to a fair trial is the foundation of the criminal justice system in India, enshrined under Articles 21 and 22 of Indian Constitution. It guarantees each accused individual a reasonable chance to defend oneself, obtain legal counsel, know the charges, confront witnesses, and be tried by a neutral court. Nonetheless, its application pursuant to the Prevention of Money Laundering Act, 2002 (PMLA) has already caused long-standing constitutional issues, particularly in light of the Supreme Court's holding in Vijay Madanlal Choudhary v. Union of India (2022).
   
   In that ruling, the Court upheld various contentious aspects of the PMLA, viz. powerful investigative and prosecution authorities vested in the Enforcement Directorate (ED) validating the stringent twin bail conditions under Section 45, permitting withholding of the Enforcement Case Information Report (ECIR) by the accused, and authorized the reliance on self-incriminatory statements made to ED officers. This represented a striking departure from established criminal law standards and was criticized for jeopardizing the accused's right to a fair trial.
   
   In the case of Vijay Madanlal Choudhary, the ED was not obligated to issue ECIR to the accused, which essentially kept them in the dark about the complete nature of charges during pre-trial proceedings. Additionally, the presumption of innocence, a fundamental right, was indirectly watered down, as the onus of proof was put on the accused even at the stage of bail. Statements to ED officers, who were regarded as not being "police officers" for the purposes of law, were held admissible even if they were made in the absence of legal advice or under coercive circumstances. These provisions established a climate where the procedural protections normally accompanying criminal trials were diluted in the name of national interest and economic integrity.
   
   However, beginning in 2023, the Supreme Court has adopted a more balanced and rights-sensitive interpretation of the PMLA. In the case of Pankaj Bansal v. Union of India (2023)[25], The Court held that the ED should present to the accused written reasons for arrest in acknowledgment of the fact that oral communication of charges is not sufficient under the standards of a fair process. This ruling was critical in re-establishing transparency and procedural justice throughout the initial stages of criminal prosecution.
   
   In addition, in Prem Prakash v. Union of India (2024), the Supreme Court held that confessions obtained while in jail, especially under coercive circumstances, would be non-voluntary and would infringe Article 20(3) of the Constitution, which safeguards an accused from self-incrimination. This was a departure from the earlier approach, which gave ED investigational power over the fundamental rights of the accused. Speaking of which, in recent high-profile cases like Manish Sisodia (2024) [26]and K. Kavitha (2024)[27], the Court has stepped forward to amend the stringent bail limitations under Section 45 of the PMLA.
   
   These judgments have emphasized that the burden of proof of innocent at the bail stage imposed on the accused is unjust and opposed to natural justice. Additional it also held that in order to avail the right to fair trial the accuse cannot be denied the right to have inspection of the documents including the un-relied documents. The Supreme Court has also reiterated the right to legal counsel and the need for judicial monitoring of the actions of the ED in order to avoid arbitrary arrest and detention.
   
   In general, the Court is shifting away from the strict and enforcement-focused approach it took in Vijay Madanlal Choudhary. The judiciary is increasingly making sure that due process is not transgressed in the name of national security or economic criminal control. The right to a fair trial is being reaffirmed as an unyielding principle, even under special laws like the PMLA. This judicial change indicates a greater devotion to constitutional morality, where individual freedom is seen to be central to the legitimacy of the criminal justice system.
   
   The ruling in Prabir Purkayastha v. State (NCT of Delhi)[28] underscores the constitutional mandate for grounds of arrest to be communicated to an accused in writing, upholding the value of personal liberty as embodied in Article 21 of the Indian Constitution. This holding is in accordance with the Prevention of Money Laundering Act (PMLA), which demands strict compliance with procedural protections while ensuring effective enforcement of financial offenses.
   
   The emphasis of the Supreme Court on the difference between "reasons for arrest" and "grounds of arrest" is in tune with the due process requirement mandated by the constitution, which likewise applies to PMLA processes, especially arrest, attachment of property, and bail conditions. The ruling highlights that, although the PMLA is intended to further the purpose of fighting economic crimes, it cannot override core rights, and investigative powers are required to meet procedural fairness based on constitutional principles. This reconciliation of legislative rules and constitutional protection ensures that anti-money laundering laws are enforced subject to justice and fairness, against arbitrary state power.

Author's Opinion: Reconciling Enforcement with Constitutional Fidelity

As the author of this essay, I think the Prevention of Money Laundering Act, in its present shape, is an alarming instance of legislative overreaching. It is symptomatic of a larger pattern under which state power imperatives-under the pretext of national security or economic sovereignty-are asserted at the cost of constitutional balance. Though the objectives of the PMLA are self-evidently compelling, their pursuit should not negate the very democratic principles they allege to uphold.

The Act, in seeking to build a deterrent structure against economic crime, has reversed traditional legal conventions. The principle of innocence, the cornerstone of criminal justice, is pushed aside. The right to bail under Article 21 becomes a procedural chimera in the face of the "twin conditions." Asset seizure powers under Sections 5 and 8 are wielded with minimal procedural rigour. The admissibility of statements made under duress is codified. The ECIR is concealed from the accused. Combined, these characteristics create a statutory ecology that is more coercive than corrective.

In my measured judgment, this model cannot be perpetuated without risking the principles of liberty, equality, and due process. The issue is not the goal of the Act, but its untrammelled application. What is required is constitutional rebalancing that does not forsake the fight against economic crime but whose weapons are synchronized with the values of a liberal democratic order.

To that end, I recommend the following as a standard template for reform:

1. Various PMLA offenses require different degrees of procedural rigor: A tiered system based on the severity of the offense can minimize overall injustice.
2. Revival of Judicial Discretion in Bail: Judges must have the flexibility to deviate from the twin parameters in exceptional cases, for instance, when detention before trial turns punitive or humanitarian situations occur.
3. Codification of Procedural Protections: The right to receive ECIRs, representation at the time of ED interrogation, and examination of all documents, including unrelied ones, must be codified.
4. Parliamentary Clarification of Officer Status: ED officers with the same powers as the police need to be identified as such for evidence. This would render confessions obtained without court examination inadmissible, thereby strengthening Article 20(3) jurisprudence.
5. Stricter Judicial Review of Attachment Orders: Subject to PMLA, every attachment and seizure action is treated to stricter judicial scrutiny, along with a requirement of reasoned and speaking orders pursuant to statute.
6. Time-Bound Trial Paradigms: Delay in PMLA trial processes destroys public faith and is against Article 21. Statutory timelines must be specifically put for charging and trial initiation.

In short, the PMLA cannot be a law unto itself. Its colossal powers should be justified not merely by the severity of the danger that it attempts to hold in check, but by the constitutional appropriateness of the means employed as well. India's embrace of the rule of law has to be absolute. National security and economic integrity are non-negotiable government objectives, but so are individual freedom and procedural fairness. The true test of an equitable judicial system is not how it treats the guilty, but how it guards the rights of the presumed innocent. Declaration:

End Notes:

1. https://law.justia.com/cases/federal/district-courts/FSupp/551/314/2366254/
2. Nikesh Tarachand Shah vs Union Of India on 23 November, 2017, AIR 2017 SUPREME COURT 5500
3. https://aphc2.in/hcap_judgments/docs/sci/eng/231103123047_eng.pdf
4. https://digiscr.sci.gov.in/view_judgment?id=MTcwNTM=
5. https://digiscr.sci.gov.in/admin/judgement_file/judgement_pdf/2022/volume 6/Part I/2022_6_382-726_1702540062.pdf
6. B. Rama Raju vs. Union of India & Ors. (2011 SCC Online AP 152)
7. https://digiscr.sci.gov.in/admin/judgement_file/judgement_pdf/2020/volume 12/Part I/2020_12_583-874_1702457673.pdf
8. [8]
9. https://digiscr.sci.gov.in/admin/judgement_file/judgement_pdf/2017/volume 10/Part I/justice k s putiaswamy (retd.),_union of india and ors._1700550294.pdf
10. https://ijirl.com/wp-content/uploads/2022/03/CASE-COMMENT-GAUTAM-KUNDU-VS.-THE-ENFORCEMENT-DIRECTORATE.pdf
11. https://digiscr.sci.gov.in/admin/judgement_file/judgement_pdf/2022/volume 6/Part I/2022_6_382-726_1702540062.pdf
12. https://api.sci.gov.in/supremecourt/2024/15608/15608_2024_3_1501_55095_Judgement_28-Aug-2024.pdf
13. Special Leave Petition (Criminal) Diary No(s). 22137/2024

Written By:

• Prateksh
  LinkedIn: www.linkedin.com/in/prateksh
  Email: [email protected]
• Mahi Rawat
  LinkedIn: http://www.linkedin.com/in/mahi-rawat-law
  Email: [email protected]

Declaration:
This research article is an original work authored by Prateksh, a B.A. LL.B. (Hons.) 4th-year student at Lloyd Law College, and co-authored by Mahi Rawat, a B.A. LL.B. (Hons.) 4th-year student at Lloyd School of Law. The authors have contributed equally to the research, analysis, and drafting of this paper. All views expressed herein are personal and academic.