Applying Section 41A CrPC Will Defeat PMLA's Objective : Solicitor General Tells Supreme Court

The Court was hearing Solicitor General Tushar Mehta's response to the argument of the petitioners that all Cr. P. C. provisions, as contained in its Chapter 12, including registration of FIR, giving a copy of the same to the accused, intimation to magistrate etc, would apply to PMLA offences. It has been his case that in case of an investigation by police officers under Cr. P. C., the Court takes cognisance on a police report filing under section 173[2] while in case of investigation by "authorities" under PMLA, the Court takes cognisance upon a complaint made by an authority; that the PMLA is a complete Code to the extent it provides for the investigative process till the stage of filing of the complaint. PMLA Section 44, under which the Special Court is empowered to take cognisance of the offence of money-laundering under Section 4 or any scheduled offence connected thereto, in terms of Section 44(1)(b), upon a complaint by the competent authority (specified under Section 45), was indicated as the judicial act of taking cognisance as under Cr. P. C. Section 190(1)(a). It was the SG's case that under the scheme of the PMLA, the recording of the Enforcement Case Information Report (ECIR) is the start of the investigative process; that the said recording is not to be equated with the registration of FIR; that ECIR is a term given for the purpose of administrative convenience for identification of each case and does not have any statutory sanction as in the case of FIR.

It was the SG's case that the fundamental misconception on which the argument of the Petitioners is premised is the Petitioners' understanding that the method, mode and manner of investigation of all criminal offences in the country is to be carried out only and only as per the provisions of the Cr. P. C. It was submitted that while Cr. P. C. represents a constitutional compliant substantive but generic procedural law with regard to criminal offences, the Cr. P. C. is not the only mode in which criminal offences in the country can be investigated/tried except the offences under the IPC. It was submitted that the same is clear from the Cr. P. C. itself in its sections 4 and 5.

It is submitted that this legislative intent reflected in Section 4 and 5 of the Cr. P. C. is clearly manifested in the PMLA in sections 65 and 71 of the PMLA. It was submitted that the Cr. P. C. is merely one of the means of investigation of criminal offences as is clear from a bare perusal of Section 5 Cr. P. C. It is, therefore, open for the Legislature, while enacting substantive penal provisions, to provide for a procedure that may differ from the procedure provided under the Cr. P. C. Admittedly, such procedure ought to entail sufficient constitutional safeguards; however, it would be open to make requisite departures from the procedure provided in the Cr. P. C. if the nature of the offence being dealt with so justifies. It was submitted that the Cr. P. C. itself envisages this departure by enacting Section 5 which itself puts restrictions on applicability of Cr. P. C. if special procedure is provided. It was submitted that further, a special criminal law procedure is wrongly portrayed by the Petitioners that procedure of all offences shall have to be Cr. P. C. compliant. It was submitted that such special procedure only ought to be constitutionally compliant and not necessarily Cr. P. C. compliant as sought to be canvassed by the Petitioners. It was submitted that the constitutional protections of non-arbitrariness [Article 14, Article 20, Article 21) (which is fair and reasonable procedure and other constitutional principles enshrined under Part III)] will form the basis of testing the validity of any special procedure prescribed by law. It was submitted that such procedure cannot be tested on the anvil of the procedure enshrined in Cr. P. C. It was submitted that the Cr. P. C. has a detailed procedure for registration, investigation, arrest by "Police officers" and subsequent trial for both, cognisable and non-cognisable offences. It was submitted that the legislature has, in order to specifically tackle a particular malaise/crime and considering the peculiar nature of the mischief of money laundering, has established a separate procedure under the enactment. The PMLA, a complete Code, when read in juxtaposition of the Cr. P. C., would override provisions of the Cr. P. C., to the extent the PMLA provides for a separate procedure, either directly or by implication. It was submitted that however, where the provisions of the Cr. P. C. cannot be ousted, either by

a. direct displacement by PMLA provisions or

b. by necessary implication by giving meaning to PMLA provisions as a whole,

the provisions of the Cr.P.C., to that extent alone and only when they are not inconsistent, directly or impliedly, apply to the investigation under PMLA.

On Thursday, as the SG continued to emphasise the 'Complete Code' doctrine and the Cr. P. C.'s exclusion by necessary implication by citing judicial precedents, Justice A. M. Khanwilkar observed, "The legislature has spelt out its mind in 4 and 5 (of the Cr. P. C.) or, for that matter, even in 65 and 71 (of the PMLA). What is additionally mentioned in the PMLA must be followed, but what is mentioned in Cr. P. C. may not necessarily be followed. The law is very clear, there is no need to multiply authorities on this point. Let us focus the time on the exercise to see which activity in the Cr. P. C. is not specifically mentioned in the PMLA"

As against section 159 (Power to hold investigation or preliminary inquiry), it was submitted that the power to hold investigation/inquiry by ED officials is stipulated under Chapter V of PMLA. There exists no jurisdictional magistrate under the PMLA.

As against section 160 Cr. P. C. (Police officer's power to require attendance of witnesses), section 50 of PMLA (Powers of authorities regarding summons, production of documents and to give evidence, etc) was indicated. Further, it was submitted that the PMLA investigations are nationwide in character and cannot be limited to Cr. P. C. concepts of police station and their territorial jurisdiction. "The exception in the S. 50 of the PMLA makes a specific departure and declines to provide any specific reprieve to special category. Further, the power of S. 50 is also exercised on a far wider plane than S. 160 as the same is exercised even for regulatory or prevention functions of authorised officers", it was advanced. As regards section 161 – Examination of witnesses by police, 162 – Statements to police not to be signed: Use of statements in evidence, and 163 – No inducement to be offered, the same argument as above was advanced on the basis of section 50 PMLA.

As regards Cr. P. C. section 164 – Recording of confessions and statements, it was submitted that the statement recorded u/s 50 of PMLA is admissible as evidence in Court of Law as the officers of the ED are not police officers.

As regards Cr. P. C. section 167 (Procedure when investigation cannot be completed in twenty-four hours), the SG has, however, submitted, "Provision like Section 167, provision for remand and other provision for conduct of trial etc contained in Cr. P. C. will apply as there are no pari materia provisions in PML Act that occupy the place and, therefore, such generic provisions of Cr. P. C. would apply since they are not inconsistent with the special provisions of PMLA. D. K. Basu guidelines for arrest will apply. 167 does apply- Every time the person is arrested, we produce him before the court and his remand is taken."

As regards Cr. P. C. section 169- Release of accused when evidence deficient, Justice Khanwilkar remarked, "The difference between police case and complaint case would be that here, at the complaint stage itself, you file whatever evidence you have and your statement is recorded. That is the complete procedure. Now there is no further investigation thereafter, you have already investigated it. There is no question of filing a complaint thereafter"