In Vijay Madanlal Choudhary v. Union of India (2022), the Supreme Court of India delivered a landmark judgment that fundamentally reshaped the landscape of financial crime prosecution. A three-judge bench upheld the constitutional validity of almost all the contested provisions of the Prevention of Money Laundering Act (PMLA), 2002.
This ruling significantly empowered the Enforcement Directorate (ED), effectively distinguishing it from the regular police and exempting it from several standard criminal procedure safeguards.
Key Pillars of the Judgment
Status of the ED (Not "Police Officers"): The Court held that ED officers are not "police officers." This is a crucial distinction because it means:
Section 50 Statements: Statements made to ED officers are admissible in court as evidence, unlike statements made to police officers (which are generally inadmissible under the Evidence Act).
Self-Incrimination: The Court ruled this does not violate the right against self-incrimination (Article 20(3)) because the person is not an "accused" at the time of the inquiry.
The "Twin Conditions" for Bail (Section 45): The Court upheld the extremely stringent bail requirements. For an accused to get bail:
The Public Prosecutor must be given an opportunity to oppose the bail.
The Court must be satisfied that there are reasonable grounds to believe the accused is not guilty of the offence and is not likely to commit any offence while on bail.
Effect: This essentially reverses the "presumption of innocence" during the bail stage.
ECIR vs. FIR: The Court ruled that the Enforcement Case Information Report (ECIR) is an internal document and not equivalent to a First Information Report (FIR). Therefore, the ED is not required to provide a copy of the ECIR to the accused; simply informing them of the grounds of arrest is sufficient.
Proceeds of Crime (Section 3): The Court broadened the definition of money laundering. It clarified that "money laundering" is not just the act of projecting "dirty money" as "clean money" (untainted), but includes any activity connected to the proceeds of crime, such as possession, acquisition, or use.
The "Predicate Offence" Link: In a rare bit of relief for the accused, the Court clarified that if a person is acquitted or discharged in the "predicate offence" (the original crime that generated the money), the money laundering case cannot continue.
Since 2022, several review petitions were filed. While the core of the judgment remains law, subsequent benches in 2023 and 2024 (such as in the Pankaj Bansal and Manish Sisodia cases) have slightly moderated the impact by emphasizing that:
Grounds of arrest must be provided in writing.
Prolonged incarceration without trial violates Article 21 (Right to Life and Liberty), which can sometimes override the PMLA's strict bail conditions.
While the 2022 Vijay Madanlal Choudhary judgment initially gave the Enforcement Directorate (ED) nearly unfettered power, the Supreme Court has since moved to "rebalance" the scales. In high-profile cases throughout 2024 and 2025, the Court has shifted from focusing on the strict PMLA provisions to prioritizing Fundamental Rights (Article 21).
Here is how the judgment has been applied and refined in recent major cases:
1. The "Trial as Punishment" Rule (Manish Sisodia Case)
In August 2024, the Supreme Court granted bail to former Delhi Deputy CM Manish Sisodia after 17 months in jail.
The Shift: The Court ruled that even if the "twin conditions" of PMLA (Section 45) make bail difficult, they cannot override the Right to Life and Liberty (Article 21).
Application: If a trial is unlikely to conclude in a reasonable time (in Sisodia’s case, thousands of documents and hundreds of witnesses), prolonged pre-trial detention becomes "punishment without trial." This has become a key precedent for other PMLA accused.
2. The Right to Know "Grounds of Arrest" (Pankaj Bansal Case)
The Vijay Madanlal ruling said the ED only needs to "inform" the accused of the grounds of arrest. However, in the Pankaj Bansal v. Union of India (2023) case, the Court tightened this:
The Change: The Court made it mandatory for the ED to provide the grounds of arrest in writing to the accused.
Impact: This was a significant check on the ED’s power, ensuring that the accused has a fair chance to challenge their detention immediately.
3. "Bail is the Rule" Re-established (Sanjay Singh & Hemant Soren)
Sanjay Singh (AAP): In April 2024, the Court granted him bail after the ED conceded they no longer needed his custody. Crucially, the Court warned that if it had to rule on "merits," it might have to record a finding that he was prima facie not guilty, which would have weakened the ED's entire case.
Hemant Soren (Jharkhand CM): After his arrest, the Jharkhand High Court and later discussions in superior courts emphasized that the "proceeds of crime" must be clearly linked to the accused. Soren was eventually granted bail (June 2024) after the High Court found there were no "reasonable grounds" to believe he was guilty of the specific land-grabbing charges linked to PMLA.
4. Recent 2025 Trends: The "Oxygen" of a Predicate Offence
In early 2025, the Supreme Court clarified a vital point from Vijay Madanlal:
The Ruling: The Court described the "predicate offence" (the original crime like corruption or fraud) as the oxygen for a PMLA case.
Effect: If the accused is acquitted in the original crime, the PMLA case must "die a natural death." The ED cannot continue a money laundering probe if the underlying crime is no longer legally valid.
The judgment was criticized by civil rights activists for granting the ED "draconian" powers and diluting the rights of the accused. However, the Court justified these measures by stating that money laundering is a "heinous" crime that threatens the sovereignty and financial integrity of the nation.
