PMLA Provides No Procedure On Summoning, So CrPC Will Apply : Sibal Tells Supreme Court In Abhishek Banerjee's Case

During the hearing of TMC MP Abhishek Banerjee's plea against ED summons in a school jobs scam case, Senior Advocate Kapil Sibal urged before the Supreme Court on July 31 that the Prevention of Money Laundering Act provides “power” to summon an accused, but does not prescribe the “procedure” for summoning.

“Power to summon is there, but procedure to summon is absent”, he said.

The matter was before a bench of Justices Bela M Trivedi and Satish Chandra Sharma, which re-listed it for August 1.

During the hearing, Sibal submitted that the larger issue as to whether provisions of the Code of Criminal Procedure apply to PMLA proceedings also arises in the case and the same is pending adjudication before a three-judge bench of the court.

Highlighting that the said matter is coming up on August 6, he suggested that the bench may await the outcome of the three-judge bench case, as it would squarely cover the issue arising in the present case.

Unpersuaded, the bench opined that the issue in the two cases were different. “Here, the short issue is whether you are required to respond to summons under Section 50 or not”, said Justice Trivedi. As such, Sibal proceeded to make his submissions.

Referring to Section 65 PMLA, the senior counsel averred that if there is an express inconsistency between the PMLA and CrPC provisions, PMLA has an overriding effect. However, if the PMLA is silent on any subject (such as summoning), the CrPC provisions will apply.

Secondly, he contended that Article 21 of the Constitution guarantees the right to personal liberty, which can be curtailed only in accordance with “procedure established by law”. Emphasizing that PMLA does not prescribe a procedure for summoning, Sibal said that summoning by ED is not in accordance with a “procedure established by law”.

Thereafter, Sibal took the court through certain provisions of the PMLA, including Sections 18, 19, 50, 65, 71 and Chapter 5, to contend that "procedure to summon" was absent in the statute. As he was referring to power to arrest under Section 19, Justice Trivedi commented that no arrest has yet been made in the present case. However, Sibal countered that the ED officials are calling Banerjee and saying he is an accused.

Sibal also alleged that ED does not operate in a defined territorial jurisdiction. If the predicate offence has occurred in Kolkata, it registers an ECIR in Delhi so that entire case can be shifted to Delhi, he claimed.

“This is beautiful…charming! Enormous power they have”, Sibal commented. He added that the whole purpose of the Act is to identify a territorial area and then officers can be authorized through a notification to conduct inquiry and investigation in that territory.

The senior counsel also expressed disapproval of ED's argument that PMLA is a special statute, saying that it only allows the agency to act as per its own whims and fancies.

It was further his question that ED officials initially interrogated Banerjee in Kolkata, so what was the need now to summon him to Delhi. Sibal submitted that although the case falls within the territorial jurisdiction of Kolkata, ED officials summoned the petitioner to New Delhi. In this context, reference was made to the order passed by the Supreme Court in May 2022 directing the ED to interrogate Banerjee at Kolkata and asking the State Police to ensure assistance.

Towards the end, Sibal raised issues regarding the Supreme Court's findings in Vijay Madanlal Choudhary v. Union of India. Among other things, it was contended that the difference between “proceeds of crime” and “money laundering” has been eliminated due to the enactment of the Finance Act, 2019 which added the explanation to Section 3 (Offence of Money Laundering).

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