Abhishek Banerjee & Anr. vs Directorate of Enforcement

Held: Present ECIR is recorded at the Headquaters Investigation Unit, which is not restricted to any territorial jurisdiction – Further, as per the specific case of the ED in the complaint, filed against the accused persons before the Special Court, PMLA New Delhi, Rs.168 Crores were allegedly received by the Inspector from the co-accused to be delivered to his political bosses, and the said Rs. 168 Crores were transferred through vouchers to Delhi and Overseas, which clearly established adequate nexus of the offence and the offenders with the territory of Delhi – Thus, no illegality in the summons issued by the ED summoning the appellants to its Office at Delhi, which also has the territorial jurisdiction, a part of the offence having been allegedly committed by the accused persons as alleged in the complaint – Also appellant No. 1 being a Member of Parliament has also an official residence at Delhi – In view thereof, no substance in the challenge made by the appellants to the Summons issued to the appellants u/s. 50 – Furthermore, though the appellant No. 2 before the High Court had challenged the order taking cognizance of the complaint and the order summoning her before the Court, she did not even bother to produce the said Orders before this Court – Since the said complaint is pending before the Court of Chief Judicial Magistrate, no opinion/expressed on the merits of the said complaint – No illegality found in the said orders passed by the concerned court and that the said complaint to be proceeded further by the said court in accordance with law. [Paras 20-22]

Prevention of Money Laundering Act, 2002 – Object and scope of:

Held: Provisions of PMLA are not only to investigate into the offence of money laundering but more importantly to prevent money laundering and to provide for confiscation of property derived from or involved in money laundering and the matters connected therewith and incidental thereto – PMLA is a self-contained Code and the dispensations envisaged thereunder, must prevail in terms of s. 71 thereof, which predicates that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force, which includes provisions of the Cr.P.C – s. 65 predicates that the provisions of the Cr.P.C. shall apply insofar as they are not inconsistent with the provisions of the PMLA in respect of arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under the Act – Thus, having regard to the conjoint reading of s. 71 and s. 65 of the PMLA as also s. 4(2) and s. 5 CrPC, the provisions of PMLA will have the effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force, including the provisions of the Cr.P.C. [Para 13] Prevention of Money Laundering Act, 2002 – Power to investigate under – Application of the provisions of Chapter XII CrPC:

Held: Dispensation regarding Prevention of Money Laundering, Attachment of Proceeds of Crime, and Inquiry/Investigation of offence of Money Laundering including issuing summons, recording of statements, calling upon persons for production of documents etc. upto filing of the Complaint in respect of offence u/s. 3 of PMLA is fully governed by the provisions of the said Act itself – Jurisdictional police who is governed by the regime of Chapter XII CrPC, cannot register the offence of money laundering, nor can investigate into it, in view of the special procedure prescribed under the PMLA with regard to the registration of offence and inquiry/investigation thereof, and that the special procedure must prevail in terms of s. 71 PMLA – Submission that the sweep of s. 160 Cr.P.C would extend to summoning any person irrespective of whether that person is an accused of that offence or a mere witness, cannot be accepted since the provisions of Chapter XII CrPC (under which s. 160 falls) do not apply in all respects to deal with information derived relating to the commission of money laundering offence much less investigation thereof. [Paras 14, 15] Prevention of Money Laundering Act, 2002 – s. 50 – Power of authorities regarding summons, production of documents and to give evidence – Code of Criminal Procedure, 1973 – s.160/161 – Police officer’s power to require attendance of witnesses and examination of witnesses by police – Glaring inconsistencies between s. 50 PMLA and s. 160/161 Cr.P.C: Held: Apart from the fact that s. 50 is a gender neutral, as it does not make any distinction between a man and a woman, there are glaring inconsistencies between the provisions contained in s. 50 PMLA and s.160/161 Cr.P.C – Chapter XII Cr.P.C pertains to the “Information to the Police and their Powers to Investigate” wherein s.160 empowers the Police Officer making an investigation under the said Chapter to require any person to attend within the limits of his own or adjoining station who, from the information given or otherwise appears to be acquainted with the facts and circumstances of the case – Whereas, the process envisaged by s. 50 PMLA is in the nature of an inquiry against the proceeds of crime and is not “Investigation” in strict sense of the term for initiating prosecution; and the authorities referred to in s. 48 PMLA are not the Police Officers – Statements recorded by the authorities u/s. 50 PMLA are not hit by Art. 20(3) or Art. 21 of the Constitution, rather such statements recorded by the authority in the course of inquiry are deemed to be the Judicial proceedings in terms of s. 50(4), and are admissible in evidence, whereas the statements made by any person to a Police Officer in the course of an investigation under Chapter XII CrPC could not be used for any purpose, except for the purpose stated in the proviso to s. 162 CrPC – In view of such glaring inconsistencies between s. 50 PMLA and s. 160/161 Cr.P.C, the provisions of s. 50 PMLA would prevail in terms of s. 71 read with s. 65 thereof. [Para 16] Prevention of Money Laundering Act, 2002 – s. 50 – Power of authorities regarding summons, production of documents and to give evidence – Procedure prescribed u/r. 11 of the Rules, 2005 – Following of, by the Summoning Officer – Requirement: Held: R. 11 of the Rules 2005, requires the Summoning Officer to follow the procedure as prescribed therein, i.e., to issue Summons in Form V appended to the said Rules – Prescribed Form V requires Summoning Officer to mention not only the Name, Designation and Address of the Summoning Officer but also the details of the persons summoned as also the documents sought therein – Foot note of Form V also mentions that the proceedings shall be deemed to be judicial proceedings, and if the person summoned fails to give evidence as mentioned in the Schedule, he would be liable to penal proceedings under the Act – Thus, there being specific procedure prescribed under the Statutory Rules of 2005 for summoning the person under sub-sections (2) and (3) of s. 50 of the Act, the same would prevail over any other procedure prescribed under the Code, particularly the procedure contemplated in s. 160/161 CrPC, as also the procedure for production of documents contemplated in s.

91 of the Code, in view of the overriding effect given to the PMLA over the other Acts including the Cr.P.C. u/s. 71 r/w s. 65 of the PMLA – Prevention of Money-Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention) Rules, 2005. [Para 17] Prevention of Money Laundering Act, 2002 – s. 50 – Power of authorities regarding summons, production of documents and to give evidence – At the stage of issue of summons, protection u/Art. 20(3) of the Constitution, if can be claimed by the person:

Held: s. 50 enables the authorized Authority to issue summon to any person whose attendance he considers necessary for giving evidence or to produce any records during the course of the proceedings under the Act, and that the persons so summoned is bound to attend in person or through authorized agent, and to state truth upon the subject concerning which he is being examined or is expected to make statement and produce documents as may be required by virtue of sub-section (3) of s. 50 – At the stage of issue of summons, the person cannot claim protection u/Art. 20(3) of the Constitution, the same being not “testimonial compulsion” – At the stage of recording of statement of a person for the purpose of inquiring into the relevant facts in connection with the property being proceeds of crime, is not an investigation for prosecution as such – Summons can be issued even to witnesses in the inquiry so conducted by the authorized officers – Consequences of Art. 20(3) or s. 25 of the Evidence Act may come into play only if the involvement of such person is revealed and his or her statements is recorded after a formal arrest by the ED official. [Para 19]