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

In a significant judgment, the Supreme Court on Wednesday (August 28) held that a statement given by an accused, while under custody in a case under the Prevention of Money Laundering Act(PMLA), to investigating officers of the Enforcement Directorate (ED) incriminating oneself in another money laundering case would be inadmissible in evidence.

The Court held that such a statement given by an accused under custody cannot be treated as admissible under Section 50 of the Prevention of Money Laundering Act.

A bench comprising Justices BR Gavai and KV Viswanathan made this significant pronouncement while granting bail to an accused in a money laundering case. The bench noted while the accused was under custody in connection with one Enforcement Case Information Report (ECIR), his statements were recorded by the ED officers in connection with the present ECIR.

The bench considered the following question - when a person is in judicial custody/custody in another case investigated by the same investigating agency, whether the statements recorded for a new case in which arrest is not yet shown and which is claimed to have incriminating materials against the maker would be admissible under S.50 PMLA.

The bench noted that the 3-bench judgment of the Supreme Court in Vijay Madanlal Choudhary v. Union of India (2022) held that statements recorded by ED officers under Section 50 of the PMLA are admissible in evidence. At the same time, the Vijay Madanlal Choudhary judgment added that whether the protection of Section 25 of the Indian Evidence Act 1872 - which makes confessions to police inadmissible in evidence- is available to an accused facing prosecution for offences under the PMLA has to be decided on a case-to-case basis.

Justice Viswanathan, while pronouncing the judgment, said that the bench has developed upon this principle and has also referred to Justice VR Krishna Iyer's judgment in the Nandini Satapathy case regarding the state of mind of a person under custody.

The bench observed that the judgment in Vijay Madanlal Choudhary mandated them to ask themselves a query - is a reasonable inference legitimately possible that due to the vulnerable position in which the appellant was placed and the dominating position in which the investigating agency was situated due to the arrest in the other proceeding, whether they existed a conducive atmosphere to obtain a confession. "We certainly feel think so. The question is not whether it actually happened, the question is could it have been possible," the bench answered the query.

The judgment authored by Justice Viswanathan, after discussing the precedents and recognising the danger in allowing such statements admissible, held :

"We have no hesitation in holding that when an accused is under custody under PMLA, irrespective of the case for which he is under custody, any statement under Section 50 to the same investigating agency is inadmissible against the maker. The reason being 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 would be extremely unsafe to render such a statement admissible against the maker as such a course of action would be contrary to all canons of fair play and justice."

The Court further held that a person in judicial custody, not being a free person, cannot be summoned by the ED. The ED has to obtain the permission of the Court which has remanded him to custody in the other case to record the statement of the accused in custody.

On the facts of the case, the Court held that the statement of the accused was hit by Article 20(3) of the Constitution since he had given the statement whilst in judicial custody pursuant to another proceeding instituted by the same investigating agency.

"It would be a travesty of justice to render the statement admissible against the appellant," the Court held. The Court said that the accused cannot be told that while giving the statement, he was wearing the hat of the other case and not the present case.

The Court held that the statement of the appellant under Section 50 of the PMLA cannot be read upon in the present ECIR even though the appellant was in custody in another ECIR.

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

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

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