ED Cannot Start With Statement Of Co-Accused To Establish Case, It's Not Substantive Evidence: Supreme Court

“Being a co-accused with the appellant, his statement against the appellant assuming there is anything incriminating against the present appellant will not have the character of substantive evidence. The prosecution cannot start with such a statement to establish its case. We hold that, in such a situation, the law laid down under Section 30 of the Evidence Act by this Court while dealing with the confession of the co-accused will continue to apply.,” observed the Bench of Justices BR Gavai and KV Viswanathan.

Reliance was placed on Kashmira Singh vs. State of Madhya Pradesh, [1952] SCR 526, wherein the Top Court had observed:

“…. The proper way to approach a case of this kind is, first, to marshal the evidence against the accused excluding the confession altogether from consideration and see whether, if it is believed, a conviction could safely be based on it. If it is capable of belief independently of the confession, then of course it is not necessary to call the confession in aid.”

The Division Bench was hearing bail plea of an accused named Prem Prakash in a money laundering case. The accused was not named in the present Enforcement Case Information Report (ECIR). After perusing the statement of a co-accused, the Court said that the Investigating Agency will have to first marshal the other evidence. Following this, the statement can be looked at for the purpose of lending assurance.

“Independently, the statement of Afshar Ali does not prima facie indicate anything about the role of the appellant in the forgery of sale deed and other documents or being involved in the offence of money laundering.,” the Court said.

The statements of other co-accused persons, involved in the case, relied by the ED to implicate the present accused, did not convince the Court. The Court prima facie observed that there is hardly any evidence to implicate the accused under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA).

“In this scenario, we hold that the appellant has satisfied the twin conditions under Section 45. Inasmuch as from the material on record, this Court is satisfied that there are reasonable grounds for believing that the appellant is not guilty of the offence of Money Laundering as alleged under Sections 3 and 4 of the PMLA and the Court is further satisfied that the appellant is not likely to commit any offence, if enlarged on bail.,” the Court concluded.

Apart from this, the Court had also held that a statement given by an accused, while under custody in a money laundering case (under PMLA) to investigating officers of the Enforcement Directorate (ED), incriminating oneself in another PMLA case, would be inadmissible in evidence.

“The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind. It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice.”

The bench noted that while the accused was under judicial custody in connection with one ECIR, his statements were recorded by the ED officers in connection with the present ECIR. However, it held that a person in judicial custody being not a free person cannot be summoned and it is only after the permission of the Court that his statement can be recorded. 

To bolster these observations, the Court relied on the words 'procedure established by law' provided in Article 21 of the Indian Constitution and said that the procedure has to be reasonable and valid. 

"In view of the above and keeping the salutary principle of Article 21 in mind, we hold that since the words 'procedure established by law' occurring in Article 21 has to be a reasonable and valid procedure, the statement of the appellant under Section 50 cannot be read upon in ECIR No. 5 of 2023 even though the appellant was at that point in custody in ECIR No. 4 of 2022."

Also from the judgment- Even In PMLA, Bail Is The Rule & Jail Is The Exception : Supreme Court

Statement To ED By Accused Under PMLA Custody Incriminating Oneself In Another PMLA Case Inadmissible: Supreme Court

If ED Chooses To Oppose Bail, Then It Must Show Foundational Facts Of Money Laundering Are Prima Facie Established : Supreme Court

Case Title : Prem Prakash v. Union of India through the Directorate of Enforcement|SLP(Crl) No. 5416/2024

Citation : 2024 LiveLaw (SC) 617

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