Not Necessary For PMLA Special Court To Record Reasons For Cognizance Of ED's Complaint: Delhi High Court

The Delhi High Court has recently held that it is not necessary for the Special Court under PMLA to record its reasons for taking cognizance of Enforcement Directorate (ED) complaint, unlike a private complaint under CrPC or BNSS.

Justice Chandra Dhari Singh observed that an initial complaint can be filed by ED under Section 44 of the PMLA, even if the investigation is not fully completed.

This, as per the Court, can be done especially in light of the Explanation-II introduced in the provision in 2019 which permits ED to file of a supplementary complaint.

Explanation II of Section 44(1)(b) of PMLA states that any complaint includes any additional complaint that may be filed for further investigation.

The Court said that the addition of the explanation in question clarifies the legislature's intent to enable ongoing investigative processes while simultaneously advancing the trial of available evidence.

“In light of the aforesaid observations, this Court is of the view that an initial complaint can be filed under Section 44 of the PMLA, even if the investigation is not fully completed, especially in light of the Explanation-II, introduced in the year 2019, which permits the filing of a supplementary complaint,” the Court said.

Justice Singh made the observations while dismissing a plea moved by an accused- Sanjay Aggarwal, challenging a trial court order which rejected his application seeking dropping of PMLA proceedings against him on the ground that no cognizance was taken by the concerned Court.

It was his case that cognizance is only taken once the magistrate applies their mind to the alleged offence. He contended that neither his name was in the FIR nor an order of cognizance was passed by the Court concerned which rendered the further proceedings invalid.

It was submitted that the ED filed a complaint without concluding its investigation, violating Section 44(1)(b) of the PMLA which mandates that complaints be only filed post-investigation.

He also argued that the amendment brought in to Section 44(1)(b) allowing supplementary complaints is not retrospective and the same does not permit filing the initial complaint prematurely.

On the other hand, ED argued that cognizance of the offence was taken by the Trial Court in December, 2015, when the complaint was filed. As per ED, this could be inferred from the trial court's actions to register and proceed with the case without needing a formal order.

Rejecting the plea, the Court observed: “…. it is pertinent to state here that it is not necessary for the Special Court under the PMLA to record its reasons for the cognizance since the said complaint is filed by an investigating agency unlike the private complaint under Section 190 of the CrPC (now Section 210 of the BNSS).”

The Court rejected Aggarwal's contention and said that trial court had duly taken cognizance of the alleged offence and also registered the complaint upon prima facie satisfaction that there existed sufficient grounds to proceed under the PMLA.

It also rejected the contention that the cognizance was taken illegally and the Explanation – II introduced in the year 2019 by way of an amendment is not applicable.

“Upon the perusal of Explanation-II to Section 44(1)(b) of the PMLA, it is revealed that it has been explicitly stated that the ED has the right to include any subsequent complaint in order to conduct further investigation into an alleged offence against the accused persons. This is to bring forth additional evidence, oral or documentary against any accused person for which a complaint has been already filed, whether named in the original complaint or not,” the Court said.

Title: SANJAY AGGARWAL v. ED

Citation: 2024 LiveLaw (Del) 1260

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