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SEDITION LAW AND PMLA IN INDIA 

Publications, Research paper

 A COMPARATIVE STUDY

By- Yuvraj Pandey

ABSTRACT:

The growing cases under the PMLA in the recent years and keeping the Sedition on hold by the Supreme Court of India puts both the laws under the radar of review by the apex court as their conviction percent is very less than of the registered cases specially under Sedition. Both the laws are under the review through various challenges by petitions in the court as they are claimed to be misused by the government against their critics and opposition. 

Conviction percentage of Sedition: As per the data from the government the total cases filed on paper under Sedition across Pan India for different years are as follows:

  1. In the year 2020 a total of 73 cases gets registered
  2. In the year 2019 the number of cases reached at 93
  3. 70 cases were registered for the year 2018
  4. A total of 51 cases got registered in the year 2017
  5. 30 and 35 cases were registered for the year 2015 and 2016 respectively

However, the conviction rate for the registered cases in the above-mentioned data for the following years are discussed below as follows:

  1. For the year 2020 the conviction rate was 33.3%
  2. It was 3.3% for the year 2019 
  3. 15.4% was the valuation percentage in year 2018
  4. It was 16.7% in 2018
  5. In the year 2016 it was 33.3%

Under this Research Paper we will cover the various aspects of Sedition and PMLA. The issues related to them, their development. The current recent scenario and the way forward for their effective functioning in order to safeguard the Democracy, Human rights and the Fundamental Rights of the citizens.

KEYWORDS: 

Sedition, PMLA, Criminal Law, British Past, Non- bailable offence, Bailable offence. 

INTRODUCTION:

The question arises why is sedition law in news so it is because recently the government has said that it is re-examining the process of sedition under section 124A of the Indian penal code before the supreme court. In May, 2022 the supreme court has suspended the sedition throughout India stalling the pending court proceeding and criminal trials under it.

Similarly, The Supreme Court of India has held that the Enforcement Directorate has no authority to arrest an accused once a special court takes cognizance of a chargesheet filed under the Prevention of Money Laundering Act (PMLA).

 The Enforcement Directorate (ED) has published the upgraded data information regarding the conviction rate against the registered cases under the 3 laws i.e. Foreign Exchange Management Act, Prevention of Money Laundering Act and the Fugitive Economic Offenders Act. All these information is updated lastly on their website dated 31st January, 2023. As per the provided updated data the conviction rate against the former or serving MPs and MLAs is 96% under the anti-money laundering acts in India.  

The Judgement fixed the ED’s power to execute arrest and stressed the non-violability of Personal Liberty.

RESEARCH METHODOLOGY:

This paper is of descriptive nature and the research is secondary sources for the deep analysis of the topic Sedition and Prevention of Money Laundering Act, 2002 through Newspapers, Journals and Websites. A literature review is essential to understand existing frameworks, challenges, and successful interventions in addressing Sedition and PMLA. Quantitative data collection through surveys and qualitative methods offers a nuanced understanding of various misuses. Policy analysis helps identify gaps and opportunities within existing legal frameworks. Continuous monitoring and evaluation ensure the sustainability and impact of interventions over time.

REVIWE OF LITERATURE:

Sedition and PMLA has been a subject of discussion in academic and legal circles, seeing as how it affects the fundamental rights, lives of citizens and politics of the country. This review will look into key works relevant to the critical analysis of Sedition and Prevention of Money Laundering Act, 2002 in relation to India.

Sedition and Freedom of Speech

Constitutional Challenges: Various Works Challenge the legality and constitutional validity of Sedition. They claim that it might infringe upon Article 19(1)(a), which guarantees freedom of speech. In Kedar Sing vs State of Bihar, 1962, the Supreme Court overruled the rulings of the High Courts and upheld the constitutional validity of the Section 124A of the IPC, 1860 with the attempt of restricting its scope. The Sedition is basically under the radar of Civil Societies and the opposition as it lacks successful conversion rate against the registered cases

Balancing Act: A number of legal commentaries interrogate on the need for striking a balance between national security concerns and free speech. Works by various scholars could be considered when studying how courts have understood and interpret the Section 124A.

PMLA and Democratic Values

The Challenges: The question basically puts before the public by the scholars is the legal usage of Enforcement Directorate by the Ruling government. It is basically a bone of contention with the existence of this law from the very beginning. The PMLA is under the radar of Opposition Parties as they blame it to be a weapon of Ruling party against curbing the Opposition by framing their MPs and MLAs under PMLA for which their members will suffer a long-term imprisonment just after the arrest by ED and will not get bail for at least 6 months. 

Balancing Approaches: A look at how democracies like the US or European countries handle similar situations could give useful pointers. Research papers comparing legal frameworks and judicial precedents related to national security and free speech in these contexts can strengthen the analysis in this regard.

This review is a basis to critically evaluate Section 124A and its Punishment. With emphasis on existing legal scholarship, changing content moderation landscape, the research will contribute to discussions on protecting freedom of speech in the world’s biggest democracy.

The paper deals with how the sedition was implemented in Indian soli by British government, the usage of sedition by the Indian government after 1947 etc. The implementation of PMLA in 2002 and it came into force in 2005 after which we will analyse the way various governments used in in the Indian democracy.

METHOD:

A multifaceted method will be used in this research to deeply examine section 124A of Indian Penal Code, 1860 and The Prevention of Money Laundering Act, 2002 in terms of its purpose of usage and way of application in India.

1. Doctrinal Legal Analysis:

This approach involves evaluating legal materials to understand the legal framework around free speech and sedition along with PMLA and arrests.

Data Collection Techniques:

Primary Legal Materials: The main data for this method will consist of number of arrests and conversion rate under Sedition and PMLA. Likewise, relevant case law decisions particularly Supreme Court pronouncements construing Section 124A would be gathered along with laws related to PMLA and the powers of Enforcement Directorate.

Secondary sources: Scholarly articles and commentaries on the Sedition and PMLA as well as legal aspects such as freedom of speech and Smooth working of democracy in India after enforcement of PMLA will be collected via established law journals and credible websites.

2. Data Analysis:

In order to enhance the analysis, quantitative data sources can be included if they are availed.

Data Collection Techniques:

Collecting reports on the number of blocking orders issued under Section 124A and surveys about public discourse is made available.

Research Instrument: For instance, statistical soft wares or data analysing tools could be used depending on type of data collected in case it happens that research is being dealt with qualitative data concerning programming languages issue.

Overall Research Approach:

This research will primarily be qualitative, relying on in-depth analysis of legal materials, the documentary, and the surrounding discourse.

If relevant quantitative data becomes available, it can be incorporated to provide additional insights.

Throughout this research process a critical and objective approach will be maintained with an aim of identifying any possible contradictions between the existing legal framework and Freedom of Speech, Free and smooth working of the Democracy.

SEDITION LAW:

  1. History of Sedition:
  • Sedition law came into effect in India in 17th century when it was drafted by Thomas Macaulay (He is also credited for drafting the Indian penal code 1860) in 1837.
  • It came into force with the belief that the good opinion of the government shou be enforced on the people of India under the British control and the bad opinion re harmful and degradation to the British government of India and the monarchy. 
  • Sedition was inserted in the IPC 1860 under the section 124A of it in the year 1870 when it was amended by sir James Stephen during the need for specific section to deal with the offence of Rebellions against the government. 
  1. Current Situation of Sedition:
  • Section 124A of the IPC, 1860 defines Sedition as “an offence committed when any person by word spoken or written, or by sign, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards the government established by law in India. 
  • Disaffection talks about all kinds of Disloyalty and feeling of enmity. 
  • The supreme court in the Balwant Singh vs State of Punjab 1995 held that the real speech of the speaker should be taken into consideration before marking it as seditious.
  • The offence is non-bailable in nature under section 124A of the IPC with the punishment ranging from Imprisonment up to 3 years or life term and fines may be added. Any person charged under sedition will not be applicable for any government job. They will not be allowed to issue passport of their own and they should produce themselves before the court whenever required.
  1. Significance of Sedition:
  • The constitution guarantees freedom of speech and expression to the citizen of India under article 19 which is not absolute and can be reasonably restricted by the government of India through legal legislation. The reasonable restriction is given in the article 19(2) of the constitution.
  • Sedition provides the government the chance of tackling the anti-national, separatist and terrorist elements within the country in order to maintain unity and integrity of the union of India.
  •  The sedition provides the government the power to control the negative elements which aims to overthrow the established government by law through their hate speech or acts etc. The government established by law is an essential condition for marinating the stability in the country/state.
  1. Issues related to Sedition:
  • The Sedition law was used in the past times before 1947 with the aim to imprison the citizens who citizen the British authority or government. Many leaders of the Indian freedom movement such as Lokmanya tilak, Mahatma Gandhi, Jawaharlal Nehra, Bhagat Singh were convicted and imprisoned under this law. The law portrays the colonial era mindset and its evil reflections.
  • The constituent assembly never wanted to add sedition in the constitution of India as they fear that it will curtail the fundamental right if the citizen of free speech and it can also be misused by the parties in power as a weapon to suppress the legitimate and constitutional guarantees such as right to protest
  • It may lead to autocracy if misused by the ruling government to imprison opposition leader who are protesting against the unfair works of the established government and their policies by stating opposition’s action as anti-national.

PREVENTION OF MONEY LAUNDERING ACT:

  1. Background of PMLA: 
  • The PMLA act was initiated in India with a response to India’s universal commitment (Vienna Convention) to combat the menace of money laundering. These includes: 
  1. United Nations Convention against illicit Traffic in Narcotic Drugs and Psychotropic Substance 1988
  2. Basic Statement of Principles, 1989
  3. Forty Recommendation of the Financial Action Task Force on the Money Laundering, 1990
  4. Political Declaration and Global Program of Action by UNGA, 1990 
  • It is a criminal law formed with the aim to prevent money laundering and provides for the seizure of the property derived from it.
  • The provisions of this act is applicable to all the financial institution, banks, mutual funds, insurance companies and their financial intermediaries.
  1. Recent Amendments in PMLA:
  • Although money laundering is not an independent offence but this act tries to treat it as a stand-alone crime.
  • Under Section-3 of PMLA, the person shall be accused of money laundering if in any manner that person is directly or indirectly involved in the proceeds of the crime.
  1. Concealment
  2. Possession
  3. Acquisition
  4. Use or projection as Untainted property
  • The act states that the person will be considered as involved entity in the crime if the person is getting something out of the actions related to the money laundering as this is a continuous offence in its nature.
  1. About Money Laundering under PMLA:
  • Money laundering is the process of making larger amount of money provided through criminal actions such as drug trafficking or terrorist funding which appears to have arrived/derived from the legitimate or legal source.
  • Criminal actions such as illegal arms sales, smuggling, drug trafficking, prostitution rings, organ smugglings, gold smuggling, human trafficking, bribery and computer fraud schemes produce large outputs and profits.
  • It creates incentives for money launderers to legitimize the ill-achieved profits through money laundering. The money generated through it is called “bad money” and money laundering is the process of converting “bad money” into “legitimate money”.
  • There are basically 3 stages of money laundering;
  1. Placement: It is the time when the money is put into the formal financial institution.
  2. Layering: The money at this stage is distributed (i.e. layers and spread over) through various transactions with the aim to discard the origin of money.
  3. Integration: The money in this stage is entered with the clean visibility that aims to wipe out the original associator of the money.
  4. History of Enforcement Directorate:
  • The Directorate of Enforcement or the ED is a multi-disciplinary organisation formed with the aim to tackle the economic crimes and violations if the foreign exchange laws.
  • It came into force on 1 May, 1956 when an enforcement unit was formed in the department of economic affairs for handling exchange control laws violations under Exchange Regulation Act, 1947 (FERA 1947).
  • With the advent of the LPG (Liberalisation, Privatization and Globalization) reforms in 1991 the FERA 1973 was replaced with the Foreign Exchange Management At, 1999 (FEMA).
  • As in the current scenario the number of offenders is increasing in the economic offence who are taking foreign shelter so the government of India has passed the Fugitive Economic Offenders Act, 2018 (FEOA) and ED is responsible for its proper application.   

COMPARISION BETWEEN SEDITION AND PMLA:

FIELD OF COMPARISIONSEDITIONPMLA
Kind of offenceNon-BailableNon-Bailable
Type of punishmentLife ImprisonmentRigorous Imprisonment
Year of enforcement18701 July, 2005
Under which actIndian Penal Code, 1860Section-124APrevention of Money Laundering Act, 2002
Years of punishmentUp to 3 yearsTo Life ImprisonmentNot less than 3 yearsMay extend to 7 years

CASES RELATED TO SEDITION: 

  • Supreme Court on Sedition:
  • Romesh Thapar vs State of Madras, 1950: The Supreme court held that “criticism of the government exciting bad feeling and disaffection will not be considered as a valid ground for restricting the freedom of speech and expression of the press until it is done with the intent to overthrow the established government.
  • Tara Singh Gopi Chand vs The State, 1951: The Punjab and Haryana High Court held that the Section 124A of the IPC was a tool of colonial administrators to thrash the discontent within the territory of India. They declared this proviso as unconstitutional.
  • Ram Nandan vs State of Uttar Pradesh, 1959: The Allahabad High Court held the Section 124A as unconstitutional stating it as a colonial tool introduced with the purpose to exploit and supress the voice and demands of the Indian citizens during their regime.
  • Kedar Sing vs State of Bihar, 1962: The Supreme Court overruled the rulings of the High Courts and upheld the constitutional validity of the Section 124A of the IPC, 1860 with the attempt of restricting its scope.

LAWS RELATED TO ED:

  • Functions of Enforcement Directorate:
  • The Prevention of Money Laundering Act, 2002: The ED has been assigned with the task of enforcing the PMLA within the territory of India by conducting investigation to find the assents produced from crime, to attach the property and to sure the prosecution of the offenders.  
  • The Foreign Exchange Management Act, 1999: Under this the Enforcement Directorate has been assigned with the task to conduct investigation into suspected violation of foreign exchange laws, for imposing penalty on the wrongdoers.
  • The Fugitive Economic Offenders Act, 2018: The ED is asked to attach the properties of the fugitive economic offenders who escaped the Indian soli and are living in foreign land after their arrest warrant issued in India. The ED should provide the confiscation of their properties to the central government. 

SUGGESTION:

  • SUGGESTIONS REGARDING SEDITION:
  • The definition of the sedition should be narrowed to include only the matters dealing with the issues of national interest and territorial integrity of India along with the sovereignty.
  • Civil Societies should raise the awareness about the misuse of the sedition law.
  • The Higher Judiciary should take the cognizance of the actions of the administration and should supervise the powers of the police to protect the fundamental rights of the citizens. 
  • The Section-124A has the usage of fighting against the anti-national, separatist and terrorist entity within the country but the misuse over the criticism of government and arrest of critics seriously put the disaffection and dissent among the public about the law which should be properly managed with case and causation and should be looked into by judiciary through their own cognisance.
  • SUGGESTIONS FOR PMLA:
  • To prevent the misuse of “proceeds to crime” within PMLA it is important to adopt a more accurate decision. 
  • The Burden of proof in the current scenario lies on the shoulders of the accused to prove that his property is legal which should be revised and the distribution should be made equitable between the prosecution and the defence for a fairer legal process.
  •  Independent Oversight bodies should be established to reduce the overreach of law of enforcement officers under the PMLA. These bodies should review and look upon the actions of the ED for the proper footing of the legal framework and the respect of human rights.
  • The PMLA should be aligned to the international standards set by the Financial Action Task Force in order to promote international cooperation, coordination and compliance.
  • Providing for better technology and system facilities can help the better functioning and working of the PMLA to detect and prevent the money laundering within India. This involves the advancement made in the field of artificial intelligence and machine learning. 

CONCLUSION:

Both the laws (specially sedition) should be reviewed properly by the parliamentary committee in order to make them more effective and people friendly and not government friendly to supress the criticism and peaceful protest against itself in order to become an autocrat. The PMLA should be reviewed with narrowing the scope in power of ED to arrest along with the sharing in burden of proof to make legal system function more appropriately in delivering justice. In this way only the laws can be made more democratic giving its citizens proper power to practice their Fundamental rights along with some of the rights available to government to curtail these freedoms in special cases through legal and acceptable legislations as stated in the constitution of India without leaving any wider scope of dispute among the two.