PMLA Prevails Over CrPC Regarding Procedure For Summoning Persons : Supreme Court

The provisions of the Prevention of Money Laundering Act (PMLA), 2002, will prevail over the Code of Criminal Procedure, 1973 (CrPC) in relation to the summoning of a person, held the Supreme Court in the judgment dismissing the appeals of Trinamool Congress MP Abhishek Banerjee and his wife Rujira Banerjee challenging the summons issued by the Enforcement Directorate for their appearance in Delhi in connection with a coal scam case.

The main argument raised by the petitioners was that they can't be summoned to New Delhi which is beyond the territorial limits of the place of offence and that the ED can summon them only at Kolkata and not at New Delhi.

It was argued that Section 50 of the PMLA merely indicates the substantive power of ED to summon but does not provide the procedure for exercise of such power. Hence, the procedure for summons should be as per the CrPC, they argued, while highlighting that as per the proviso to Section 160 CrPC, a woman cannot be summoned beyond her place of residence.

A bench comprising Justices Bela M Trivedi and Satish Chandra Sharma, while rejecting the petitioners' arguments, noted that Section 71 of the PMLA gives PMLA overriding effect over other laws. According to Section 65 PMLA, 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. References were made to Sections 4(2) and 5 as well.

"Thus, having regard to the conjoint reading of Section 71 and Section 65 of the PMLA as also Section 4(2) and Section 5 of the Code, there remains no shadow of doubt that 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," the Court observed.

Reliance was also placed on the observations in the judgment in Vijay Madanlal Choudhary v. Union of India (2022) that the provisions of Chapter XII of the CrPC (which includes S.160) do not apply in all respects to deal with information derived relating to commission of money-laundering offence.

The Court also noted that there are glaring inconsistencies between S.50 PMLA and S.160 CrPC such as :

1. S.50 PMLA is gender-neutral whereas S.160 is not.

2. S.160 CrPC is regarding "investigation" while S.50 PMLA deals with "inquiry".

3. Statements recorded under S.50 PMLA are not hit by Article 20(3) of the Constitution whereas the statements recorded under S.160 CrPC cannot be used in evidence except for the limited purpose stated in the proviso to Section 162 of the Code.

"In view of such glaring inconsistencies between Section 50 PMLA and Section 160/161 Cr.P.C, the provisions of Section 50 PMLA would prevail in terms of Section 71 read with Section 65 thereof," the Court observed.

The Court further noted that there is a specific procedure prescribed under the PMLA Rules, 2005 regarding summoning of persons.

"Thus, there being specific procedure prescribed under the Statutory Rules of 2005 for summoning the person under sub-sections (2) and (3) of Section 50 of the Act, the same would prevail over any other procedure prescribed under the Code, particularly the procedure contemplated in Section 160/161, as also the procedure for production of documents contemplated in Section 91 of the Code, in view of the overriding effect given to the PMLA over the other Acts including the Cr.P.C. under Section 71 r/w Section 65 of the PMLA."

Since the Constitutional validity of Section 50 PMLA was upheld in the Vijay Madanlal, the Court did not entertain the arguments raised by the petitioners that the procedure was in violation of Articles 20 and 21.

Violation of summons would criminal offence

The Court noted that as per the sub-section (3) of Section 50, all the persons summoned are bound to attend in person or through authorized agents as the officer may direct and are bound to state the truth upon any subject respecting which they are examined or make statements, and to produce the documents as may be required. As per sub-section (4) thereof every proceeding under sub-sections (2) and (3) is deemed to be a Judicial proceeding within the meaning of Section 193 and Section 228 of the IPC.As per sub-section (4) of Section 63, a person who intentionally disobeys any direction issued under Section 50 is liable to be proceeded against under Section 174 of the IPC.

The Court therefore found no illegality in the notice issued by the Court of Chief Judicial Magistrate, Patiala House Courts, New Delhi against Rujira under Section 63 PMLA r/w Section 174 IPC.

Case Title: ABHISHEK BANERJEE AND ANR. Versus DIRECTORATE OF ENFORCEMENT, Crl.A. No. 2221-2222/2023 (and connected case)

Citation : 2024 LiveLaw (SC) 674