In a recent development, a three-judge panel of the Supreme Court has deferred the case concerning the validity of provisions in the Prevention of Money Laundering Act (PMLA) to another bench within the Court. The bench, consisting of Justices Sanjay Kishan Kaul, Sanjiv Khanna, and Bela M Trivedi, cited time constraints as a primary reason for the decision.

The Central government's request for additional time to structure its arguments, coupled with the imminent retirement of Justice Kaul on December 25, contributed to the bench's incapacity to promptly formulate a judgment. The Solicitor General, Tushar Mehta requested a postponement, making it impractical for the current bench to draft an order. The amendment application was approved, providing a four-week period for filing a counter-affidavit, with an additional four weeks for any rejoinder.

Given the impending departure of Justice SK Kaul the Chief Justice of India was directed to reconstitute the bench, and appropriate orders were instructed to be obtained from the him. This decision followed two consecutive days of hearings where petitioners challenged the legitimacy of provisions within the PMLA.

Justice Kaul expressed reluctance, stating, "What can I do? I am doing this with a little heavy heart," before proceeding to dictate the order.

The individuals presenting their case seek a review of the Court's previous ruling in the case of Vijay Madanlal Choudhary v. Union of India, where the validity of the PMLA was affirmed.

Despite the Court's prior refusal to postpone hearings, a plea was made in light of the ongoing review by the Financial Action Task Force (FATF) of the nation's laws pertaining to anti-money laundering and terrorism financing.

During the recent hearing, the Court verbalized its opinion that the Enforcement Directorate (ED) cannot use the PMLA for cases related to tax evasion, arguing that offenses under the Income Tax Act are not categorized as scheduled offenses under the PMLA.

Earlier in the week, the Central government requested additional time to prepare for the case, citing amendments introduced by the petitioners that broadened the scope of the challenge to encompass the entirety of the PMLA. The Solicitor General, Tushar Mehta, reiterated this concern, requesting permission to commence arguments in December due to the expanded scope of the challenge.

In response, the Court acknowledged the urgency, stating, "We cannot drag this. (But on) 5th the SG is before a Constitution Bench. We will require some deliberation." However, senior counsel Abhishek Manu Singhvi accused the Central government of employing a 'distressing' tactic to evade the hearing.

Senior Advocate Kapil Sibal suggested that if the matter were referred to a larger bench, a detailed judgment would not be necessary from the current three-judge bench. The Court disagreed, emphasizing the need for thorough consideration and substantive reasons if a referral to a larger bench is considered.

Despite granting permission for the petitioners' amendment application, the Court decided to transfer the matter to another bench, influenced by the Central government's request for additional time and the imminent retirement of Justice Kaul.

Justice Trivedi highlighted the need for careful consideration, stating, "We cannot look at it cursorily. It requires deliberation." In response to concerns about progress made in hearings, Justice Khanna objected, emphasizing the need for time to pen down their decision. The Court observed that withdrawing the application to amend pleadings might prejudice the petitioners and granted permission for the amendment application.