Decoding The Enquiries Under Prevention Of Money Laundering Act, Customs Act Vis-A-Vis The Personal Liberty: (PART 1)

Many cases allege harrying, pertaining to the enquiries made by the Directorate General, be it under Prevention of Money Laundering Act 2002 PMLA, Customs Act 1962 etc. These enquires are nothing but a part of the regulatory regimes, to which certain measures will clear the atmosphere of doubt amongst the persons who are summoned. It is often mooted that when the summons are being received by a person be it under Section 108 of the Customs Act or under the provisions of PMLA Act by the enforcement agencies like the Department of Revenue Intelligence (hereinafter as 'DRI') or Enforcement Directorate (hereinafter as 'ED'), what is the evidentiary value of the statements and what is the status of the person being summoned. Certain safeguards and steps would not only regulate the pre-cognizance stage but also the post cognizance stage too, all aiming at the preserving the personal liberty, within the domain of framework of investigating agencies.

An effort should be made to ease the enquiry (pre cognizance stage) i.e. to permit the persons summoned to have an advocate with certain conditions at the time of their interrogation by the respective agencies, to the likes of ED and DRI. There are bunch of judgment delivered by Hon'ble Supreme Court and various High Courts in relation to the aforesaid concept. The first lot start with the judgments of the Hon'ble Supreme Court of 'Vijay Sajnani Vs Union of India' (MANU/SC/1312/2012) whereby the Hon'ble Supreme Court observed as 'we allow the criminal miscellaneous petition as well as the writ petition and direct that the Petitioners' advocate should be allowed to be present during the interrogation of the Petitioners. He/they should be made to sit at a distance beyond hearing range, but within visible distance and the lawyer must be prepared to be present whenever the Petitioners are called upon to attend such interrogation.' The next judgment follows is of 'Rajendra Arora & Ors. Vs Union of India & Ors.' (Writ Petition No. 389/2010) whereby it was observed as 'As far as recording of the statements of petitioners is concerned, the same is to be conducted in the presence of learned advocate, who will be allowed to stand within visible distance but outside the bounds of hearing', also 'the department has also assured that the recording of statements and examination of the goods will be videographed.' The last word stands with the judgment of 'Birendra Kumar Pandey & Ors. Vs Union of India & Ors.' (Writ petition (Crl.) 28 of 2012) whereby the Hon'ble Supreme Court categorically observed as 'accordingly we allow the Criminal misc. Petition and direct that the petitioner's advocate should be allowed to be present during the interrogation of the petitioners but that he should be made to sit at a distance beyond hearing range, but within visible range and the lawyer must be prepared to be present whenever the petitioners are called upon to attend such interrogation.' The possible contention which can be argued from the aforesaid ratio of the Hon'ble Supreme Court is that a person summoned under the Provisions of Customs Act can be accompanied by an Advocate with certain distance.

So as to regulate the framework from the side of the agency as well as the person summoned, thereby easing his state of mind and most importantly, preserving the liberty of an Individual without causing any prejudice to the realm of investigating agencies.

The next line of judgments dealing with the aforesaid points starts with the judgment of Hon'ble Delhi High Court in 'Sangeet Agarwal Vs Director General DRI & Ors.' (MANU/DE/6012/2017) whereby the Hon'ble Delhi High Court in similarly observed vide para 8 as 'In the circumstances, the petition is allowed and the respondent is directed that as and when the petitioner is called upon under Section 108 of the Customs Act, 1962 by the customs authorities, he shall be interrogated in the presence of his Advocate who shall be available at a visible distance but beyond the hearing range. The lawyer shall not interfere in such interrogation.' The next line follows of the Hon'ble Gujarat High Court in the case of 'Jignesh Kishore Bhai Vs State of Gujarat' (2017) CIRLJ 1760 whereby it was observed vide para 39, it was observed as 'In view of the aforesaid, I hold that although the applicant cannot claim the relief, as a matter of right, yet as of abundant caution and prudence, I am inclined to permit the counsel for the choice of the applicant to remain present within visible distance, but beyond the hearing range.' and in para 40 as 'the advocate concerned should be made to sit at a distance beyond the hearing range, but within a visible distance and the lawyer must be prepared to be present whenever the applicant is called upon to attend such interrogation.'

There are many judgments of Hon'ble Bombay High Court granting similar order in terms of the aforesaid as in the case of 'Vijen Girishchandar Jhaveri Vs Directorate of Revenue Intelligence' (Writ Petition No. 3353/2019) observed vide para 5 as 'We do not find any reason refusing to grant similar relief to the petitioner. As far as video-graph is concerned in Rajendra Arora Vs. Union of India & Ors (Writ Petition (Civil) No. 389 of 2010), the Department itself has assured that the recording of the statement and examination of the goods will be video-graphed. In such circumstances, we are inclined to grant relief prayed by the petitioner and we direct that the petitioner would be interrogated presence of an Advocate at a visible but not audible distance during investigation of the subject crime and the proceeding is directed to be video-graphed in terms of the order passed by the Apex Court in case of Rajinder Arora (supra).' Apart from the aforesaid judgment of the Hon'ble Bombay High Court there are lines of further judgment also dealing with the similar prayer.

The aforesaid measures assume it utmost importance as there is no express provision under the Customs Act barring the presence of an advocate at the time of interrogation and most importantly, the summons so served for interrogation under Section 108 clearly entails as [Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860)], so with the summons served under PMLA Act as (Every proceeding under Sub Section 2 and Sub Section 3 of Section 50 of PMLA Act, 2002 shall deemed to be a judicial proceeding within the meaning of Section 193 and 228 of Indian Penal Code). What can be possible said is that the interrogating authorities aforesaid have full trappings of a Court, which sees no foundation to bar the presence of an advocate.

The next safeguard which is more useful than to preserve the personal liberty of an individual rather to make the system more transparent is to seek the visual recording of the interrogation of the person summoned before the interrogating authorities. The Hon'ble Supreme Court has an occasion to deal with the aforesaid in the case of 'Rajendra Arora' (supra) whereby the Hon'ble Supreme Court observed verbatim as "the department has also assured that the recording of the statements and examination of the goods will be videographed". The Hon'ble Bombay High Court on the same lines in catena of judgments for reference in the case of 'Raju Ram Purohit Vs Union of India' (Criminal Writ Petition No. 349/2018) categorically passed an order as in Para 7 (v) as 'in view of the statement which is recorded by the Hon'ble Apex court in its order dated 7/12/2010 in Rajendra Arora and Ors vs. UOI and Ors in Writ Petition (Civil) No(s) 389 of 2010, we direct that Department shall videograph recording of the statement and examination of the Petitioner as well as goods. The same shall be at the cost of the Petitioner. Needless to state that the accused would not be entitled to copy thereof, unless so ordered by this Court.'

In the end, what can be possible tried and worked it out that with little measures as enunciated above, the enquiries by the agencies like of 'ED' and 'DRI' can be made more simple, transparent and friendly preserving the liberty of an individual and arriving at a better solution to the thread of investigations countered. All of which not causing prejudice to the investigating agencies, within their legal domain.

Author is a practicing Lawyer at Rajasthan High Court

[The opinions expressed in this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of LiveLaw and LiveLaw does not assume any responsibility or liability for the same]