Allegations In 2018 And 2020 Cases Different; Mere ECIR Registration Doesn't Make A Person An Accused: ED To Delhi HC on DK Shivakumar's Plea

The Enforcement Directorate has opposed before the Delhi High Court a plea moved by Karnataka Congress Chief D.K. Shivakumar challenging the investigation initiated by the probe agency against him in a money laundering case.

Seeking dismissal of the plea, ED in its counter affidavit has said that the plea is premature and that no fundamental rights of the Congress leader have been violated to warrant interference under Article 226 at the stage of summons.

"The powers conferred on the Enforcement Officers for the purpose of complete and effective investigation include the power to summon and examine "any person". The law declares that every such person who is summoned to state the truth. At the time of such investigation process, the person summoned is not an accused. Mere recording of ECIR by giving a file number does not make a person an accused," the ED said.

Shivakumar has challenged the proceedings initiated by ED in the year 2020, arguing that the agency is "re-investigating the same offence" which it had already investigated in a previous case registered by it in 2018. His prayer is that the entire investigation along with continued probe, including issuance of summons in the 2020 case, be quashed.

ED in response dated November 22 has submitted that both the ECIRs  relate to two different scheduled offences and different set of facts, with certain overlapping of facts, The same cannot be termed as re-investigation, it has argued.

The agency has further submitted that the quantum of the proceeds of crime involved and the allegations made are different in both the cases. While the first case was registered on the basis of a complaint of Income Tax department, second ECIR relates to disproportionate assets - initiated after a preliminary enquiry was done by CBI, the ED said.

The ED has argued that both the cases "depict different mode of generation of the crime proceeds" and that Shivakumar cannot claim that he has already been investigated of the same offence.

"The same facts may give rise to different prosecutions and punishment and in such an event the protection afforded by Article 20 (2) is not available. It is settled law that a person can be prosecuted and punished more than once even on substantially same facts provided the ingredients of both the offences are totally different and they did not form the same offence," the central agency has argued.

The ED has also contended that it is well settled that at the stage of investigation, it is premature to take the plea of double jeopardy. It has also contended that it is wholly impermissible in a petition challenging the constitutional validity of certain provisions of special act, to pass the interim orders in the nature of final anticipatory bail order under Section 48 CrPC.

Shivakumar in the petition has also challenged the constitutional validity of Section 13 of the Prevention of Money Laundering (Amendment) Act, 2009, by virtue of which the schedule of the Act was amended and Section 13 of the Prevention of Corruption Act was included under the anti-money laundering law.

The ED in response has argued that the entire schedule of the PMLA including insertion of PC Act, which was subject matter of challenge before the Supreme Court in the Vijay Madanlal Choudhary & Ors. vs. Union of India & Ors. has been upheld and approved by the apex court and therefore, it is not open to challenge again.

Seeking dismissal of the plea, the ED has told the court that the petition is highly premature and that it is well-settled that the courts do not interdict the powers of investigating agencies conferred upon them by the statutes.

The matter was listed today before a division bench headed by Justice Mukta Gupta. Both the parties have been asked to file written submissions in the matter.

The bench also framed two broad issues to be adjudicated in the matter which are as follows:

- Whether in view of TT Anthony v. State of Kerala, a second ECIR or Investigation can be initiated when offence is already investigated by ED in the previous investigation and a complaint is filed?

- Whether Section 3 of PMLA can be invoked where the scheduled offence is section 13(1)(e) of PC Act as the disproportionate assets are already in possession of the accused or any other person…..?

The matter has now been fixed for hearing on December 2.

The case dates back to August 2017 when certain seizures were made by the Income Tax Department at the premises of Shivakumar. ED had then lodged an ECIR in 2018 on the basis of the prosecution complaint filed by Income Tax Department. 

The agency alleged that there was a criminal conspiracy between different individuals for concealing and projecting the unaccounted and illegal money as untainted property.

Shivakumar was then summoned and later arrested in September 2019. He was thereafter granted bail by Delhi High Court on October 23, 2019.

In the meanwhile, Karnataka Government granted sanction to the CBI to inquire into the violations of the provisions of the Prevention of the Corruption Act by Shivakumar and other individuals.

The CBI then lodged an FIR in October 2020 alleging that for the period between April 1, 2013 to April 30, 2018, Shivakumar could not satisfactorily explain the possession of assets "disproportionate" to his known sources of income.

Thereafter, ED lodged another ECIR in 2020 for probing the laundering of proceeds of crime in relation to the scheduled offence being Section 13 of Prevention of Corruption Act.

It is Shivakumar's case that the entire aspect of disproportionate assets allegedly acquired by the him when he was MLA in Karnataka was thoroughly investigated by the ED in the 2018 ECIR.

Title: DK Shivakumar v. ED