ECIR Not Equal To FIR, Not Necessary To Supply It To Accused; Disclosure Of Grounds Of Arrest Sufficient : Supreme Court

The Supreme Court observed there is no need to formally register an Enforcement Case Information Report (ECIR) before initiating penal action or prosecution against the person involved with process or activity connected with proceeds of crime under the Prevention of Money Laundering Act, 2002.

"Suffice it to observe that ECIR cannot be equated with an FIR which is mandatorily required to be recorded and supplied to the accused as per the provisions of 1973 Code", the Court observed.

The bench comprising Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar observed that ECIR is an 'internal document created by the department' and that the supply of ECIR in every case to person concerned is not mandatory. Revealing a copy of an ECIR, if made mandatory, may defeat the purpose sought to be achieved by the 2002 Act including frustrating the attachment of property (proceeds of crime), the court added. The court also observed that it is enough if ED at the time of arrest, discloses the grounds of such arrest.

The court was considering the submission that, though under the Cr.P.C., every FIR registered by an officer under Section 154 thereof is to be forwarded to the jurisdictional Magistrate, this procedure is not being followed in ECIR cases. It was contended that as per present situation, the ED can arrest an individual on the basis of an ECIR without informing him of its contents, which is per se arbitrary and violative of the constitutional rights of an accused. The right of an accused to get a copy of the First Information Report at an early stage and also the right to know the allegations as an inherent part of Article 21, it was contended.

The bench noted that as per the procedure prescribed in CrPC, the officer in-charge of a police station is under an obligation to record the information relating to the commission of a cognizable offence, in  terms of Section 154 of the 1973 Code, but there is no corresponding provision in the 2002 Act requiring registration of offence of money-laundering. In this regard, the bench observed.

Suffice it to observe that being a special legislation providing for special mechanism regarding inquiry/investigation of offence of money-laundering, analogy cannot be drawn from the provisions of 1973 Code, in regard to registration of offence of money-laundering and more so being a complaint procedure prescribed under the 2002 Act. Further, the authorities referred to in Section 48 of the 2002 Act alone are competent to file such complaint. It is a different matter that the materials/evidence collected by the same authorities for the purpose of civil action of attachment of proceeds of crime and confiscation thereof may be used to prosecute the person involved in the process or activity connected with the proceeds of crime for offence of money-laundering. Considering the mechanism of inquiry/investigation for proceeding against the property (being proceeds of crime) under this Act by way of civil action (attachment and confiscation), there is no need to formally register an ECIR, unlike registration of an FIR by the jurisdictional police in respect of cognizable offence under the ordinary law. There is force in the stand taken by the ED that ECIR is an internal document created by the department before initiating penal action or prosecution against the person involved with process or activity connected with 522 proceeds of crime. Thus, ECIR is not a statutory document, nor there is any provision in 2002 Act requiring Authority referred to in Section 48 to record ECIR or to furnish copy thereof to the accused unlike Section 154 of the 1973 Code. The fact that such ECIR has not been recorded, does not come in the way of the authorities referred to in Section 48 of the 2002 Act to commence inquiry/investigation for initiating civil action of attachment of property being proceeds of crime by following prescribed procedure in that regard.

Another issue raised regarding ECIR was whether it is necessary to furnish copy of ECIR to the person concerned apprehending arrest or at least after his arrest? 

To hold that the supply of ECIR in every case to person concerned is not mandatory, the bench made the following observation

So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution

The ECIR may contain details of the material in possession of the Authority and recording 523 satisfaction of reason to believe that the person is guilty of moneylaundering offence, if revealed before the inquiry/investigation required to proceed against the property being proceeds of crime including to the person involved in the process or activity connected therewith, may have deleterious impact on the final outcome of the inquiry/investigation. So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution. Moreover, the arrested person before being produced before the Special Court within twenty-four hours or for that purposes of remand on each occasion, the Court is free to look into the relevant records made available by the Authority about the involvement of the arrested person in the offence of money-laundering. In any case, upon filing of the complaint before the statutory period provided in 1973 Code, after arrest, the person would get all relevant materials forming part of the complaint filed by the Authority under Section 44(1)(b) of the 2002 Act before the Special Court.

From the submissions made across the Bar, it is noticed that in some cases ED has furnished copy of ECIR to the 524 person before filing of the complaint. That does not mean that in every case same procedure must be followed. It is enough, if ED at the time of arrest, contemporaneously discloses the grounds of such arrest to such person. Suffice it to observe that ECIR cannot be equated with an FIR which is mandatorily required to be recorded and supplied to the accused as per the provisions of 1973 Code. Revealing a copy of an ECIR, if made mandatory, may defeat the purpose sought to be achieved by the 2002 Act including frustrating the attachment of property (proceeds of crime). Non-supply of ECIR, which is essentially an internal document of ED, cannot be cited as violation of constitutional right. Concededly, the person arrested, in terms of Section 19 of the 2002 Act, is contemporaneously made aware about the grounds of his arrest. This is compliant with the mandate of Article 22(1) of the Constitution. It is not unknown that at times FIR does not reveal all aspects of the offence in question. In several cases, even the names of persons actually involved in the commission of offence are not mentioned in the FIR and described as unknown accused. Even, the particulars as unfolded are not fully recorded in the FIR. Despite that, the accused named in any ordinary offence is able to apply for anticipatory bail or regular bail, in which proceeding, the police papers are normally perused by the concerned Court. On the same analogy, the argument of prejudice pressed into service by the petitioners for non-supply of ECIR deserves to be answered against the petitioners. For, the arrested person for offence of money-laundering is contemporaneously informed about the grounds of his arrest; and when produced before the Special Court, it is open to the Special Court to call upon the representative of ED to produce relevant record concerning the case of the accused before him and look into the same for answering the need for his continued detention.

In conclusion part of the judgment, the court held thus:

(a) In view of special mechanism envisaged by the 2002 Act, ECIR cannot be equated with an FIR under the 1973 Code. ECIR is an internal document of the ED and the fact that FIR in respect of scheduled offence has not been recorded does not come in the way of the Authorities referred to in Section 48 to commence inquiry/investigation for initiating "civil action" of "provisional attachment" of property being proceeds of crime.

(b) Supply of a copy of ECIR in every case to the person concerned is not mandatory, it is enough if ED at the time of arrest, discloses the grounds of such arrest.

Other reports on the judgment :

Supreme Court Upholds ED's Power Of Arrest, Attachment, Search & Seizure And "Twin-Conditions" For Bail; Says PMLA Has Stringent Safeguards

ED Authorities Are Not Police Officers; Article 20(3) Protection Available Only After Arrest & Not At Summons Stage : Supreme Court

Case details

Vijay Madanlal Choudhary vs Union of India | 2022 LiveLaw (SC) 633 | SLP (Crl) 4634 OF 2014 | 27 July 2022 | Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar

Counsel: Senior Advocates Mr. Kapil Sibal, Dr. Abhishek Manu Singhvi, Mr. Sidharth Luthra, Mr. Mukul Rohatgi, Mr. Vikram Chaudhari, Mr. Amit Desai, Mr. S. Niranjan Reddy, Ms. Menaka Guruswami, Mr. Siddharth Aggarwal, Mr. Aabad Ponda, Mr. N. Hariharan and Mr. Mahesh Jethmalani,  appearing for private parties and  Solicitor General of India Mr. Tushar Mehta, and Additional Solicitor General of India Mr. S.V. Raju, for the Union of India.

Click here to Read/Download Judgment