Article by Vijay Pal Dalmia, Advocate Supreme Court of India & High Court Mobile: +91 9810081079 Email: vpdalmia@vaishlaw.com and Maryam Quadri LL.B. 3rd Year (3 Year Course), Faculty of Law, Delhi University, India Maryamquadri0204@gmail.com It has been held in catena of judgements that Enforcement Directorate officials do not fall within the category of police officers. For example, in the case of Directorate of Enforcement v. Deepak Mahajan (http.// Jjajharkhand.in/wp/wp-content/judicial_updates_files/07_Criminal_Law/ 04_arrest_and_custody/Directorate_Of_Enforcement_vs_ Deepak_Mahajan_on_31_January, 1994.PDF), the Hon'ble Supreme Court held that @ itis true that there are a series of decisions holding the view that an Officer of Enforcement or a Customs Officer is not a police officer though such officers are vested with the powers of arrest and other analogous powers. In Vakamulla Chandrashekhar vs Enforcement Directorate & Anr., the Delhi High Court clearly laid down that- @ = The authorities for the purposes of PMLA referred to and appointed under Sections 48 and 49 of the said Act are not police officers. Firstly, this position is clear from the provisions of the Act itself. @ — Arange of officers - including "officers of police” are "empowered and required to assist the authorities in the enforcement of this Act” (see Section 54 of PMLA) @ = If the authorities under the Act - who are authorised to carry out investigation under the Act, were considered by the Parliament to be police officers, there was no need to empower and oblige the officers of police to assist the authorities under the Act in the implementation of the Act. Thus, it is apparent that the officials of ED are not police officers. Secondly, for the purpose of confessional statements made to such ED officials, they would still be considered to not be police officers and therefore, the confession would be admissible in evidence. The Hon'ble Supreme Court held in the case of Assistant Collector of Central Excise, Rajamundry vs. Duncan Agro Industries Ltd. and Ors (https://indiankanoon.org/doc/695110/)that, @ It must be remembered that there is no ban in regard to the confession made to any person other than a police officer, except when such confession was made while he is in police custody. @ = The inculpatory - statement made by any person under Section 108 is to non-police personnel and hence it has no tinge of inadmissibility in evidence if it was made when the person concerned was not then in police custody. @ Nonetheless the caution contained in law is that such a statement should be scrutinized by the court in the same manner as confession made by an accused person to any non-police personnel. @ = The court has to be satisfied in such cases, that any inculpatory statement made by an accused person to a gazetted officer must also pass the tests prescribed in Section 24 of the Evidence Act. @ = If such a statement is impaired by any of the vitiating premises enumerated in Section 24, that statement becomes useless in any criminal proceedings. The above judgement was pronounced in respect of Custom officials, however as stated earlier, the terms of section 108 of Customs Act and Section 50 of PMLA are analogous and therefore, the decisions of the court may be applied to PMLA as well. Further, the Hon'ble Supreme Court in the case of Francis Stanly vs. Intelligence Officer, Narcotic Control Bureau, Thiruvananthapuram (https://indiankanoon.org/doc/ 1703848/ )(in respect of Narcotic Drugs and Psychotropic Substances Act, 1985) held that:- @ = The confession was made by the accused not before an ordinary police officer, but before an officer under the NDPS Act who is an officer of the Department of Revenue Intelligence and such a confession is not hit by Section 25 of the Evidence Act. @ Such a confession must be subject to closer scrutiny than a confession made to private citizens or officials who do not have investigating powers under Act. Hence the alleged confession made by the appellant must be subjected to closer scrutiny than would otherwise be required. Thus, confession or statements made by a person before an official of ED is admissible under the Evidence Act in view of the above mentioned decisions, particularly for the reason that ED officials are not Police Offices as contemplated under the Indian Evidence Act, 1872 but such a confession is subject to a close scrutiny and must pass the tests given under Section 24 of Evidence Act so as to render it voluntary and free.© 2018, Vaish Associates Advocates, All rights reserved Advocates, 1st & 11th Floors, Mohan Dev Building 13, Tolstoy Marg New Delhi-110001 (India). The content of this article is intended to provide a general guide to the subject matter. Specialist professional advice should be sought about your specific circumstances. The views expressed in this article are solely of the authors of this article. Fema / RBI Investigation Under PMLA and their scope Investigation Under PMLA and their scope Sakshi Jain 26 Oct 2021 13,776 Views 1 comment Print Fema / RBI | Articles Money- laundering can be defined as a process by which a person makes huge income out of the illicitly obtained money and he has placed it into a chain of transactions to hide its origin. Section 3 of Prevention of Money laundering Act, 2002 defines offences of Money- laundering. This article is small attempt to examine the power of Investigation by proper officer, issuance of summon and its scope, relevancy of statement etc. Further, whether the statement recorded before ED (Enforcement Directorate) is admissible before Court of law or not? 1. WHAT IS A SUMMON? Section 50 of Prevention of Money-laundering Act, 2002, provides the scope for power of officers regarding their power to summon, production of documents and to give evidence. A Summon is issued by the authority for production of documents, or to give evidence, for the purpose of conducting an investigation under the Prevention of Money Laundering Act, 2002. The director, Additional Director, Joint Director and Deputy or Assistant Director have the power to summon any person whose attendance he considers necessary to produce any records during the investigation or to hand over the evidence. Once the summons is issued, the person is required to attend the ongoing investigation, to give evidence and to produce records, which were in his possession, for necessary examination and verification for the purpose of investigation under PMLA. 2. THE DIRECTOR HAS THE SAME POWER AS ARE VESTED IN A CIVIL COURT In the case of G. Radhakrishnan v Assistant Director (2014) SCC online Mad 3980, it had been seen that, under section 50(1) of PMLA, the power which are vested with a civil court under Code of Civil Procedure, 1973, while trying a suit in respect of the matters like discovery and inspection, or, enforcing the attendance of any person and production of records and receiving evidence, issuing commissions of examination of witnesses and documents and any other matter, which may be prescribed have been conferred on the authority exercisingpower under Section 50 of PMLA. In addition, every proceeding under sub-section (2) and (3) of Section 50 of PMLA is deemed to be a judicial proceeding. In the case of B. Narayanaswamy v Deputy Director and Others (2019) SCC online Mad 32868, it was held that, every proceeding under sub-section(2) and (3) of Section 50 of PMLA, 2002 shall be deemed to be a judicial proceeding within the meaning of Section 193 and Section 228 of IPC, 1860. Section 193 of IPC provides, Punishment for giving false evidence. In addition, Section 228 of IPC says, Intentional insult or interruption to public servant sitting in a judicial proceeding. Also, Section 50(5) of PMLA provides, on behalf of the Central Government, any officer (director, additional director, joint director and deputy director) may impound and keep any records in his custody for any period, as he thinks fit. Provided that- A deputy director shall not take any records without recording his reasons for doing so, or, Shall not keep any such records in his custody for a period exceeding three months, without receiving the previous approval of the Joint director. 3. POWER TO INVESTIGATE DOES NOT MEAN POWER TO HARASS Till the filing of a prosecution complaint under section 44 of PMLA, no person can be treated as an accused of the offence of money-laundering. It was held that, in case of B. Narayanaswamy v Deputy and others (supra), under section 50(2) and 50(3) of the act, the persons summoned, unless found to have been involved in the offence of money laundering, they cannot be treated as an accused at the stage of enquiry. It was also contended that, The Investigating Officer cannot harass the person physically, mentally and verbally even at the stage of enquiry. The person cannot be treated as an accused, for the purpose of extracting a statement against his will. 4. INVESTIGATION IS ONLY DONE FOR THE PURPOSE OF COLLECTING EVIDENCE Section 2(na) of PMLA, defines:- “Investigation” includes all the proceedings under this act conducted by the director or by an authority authorized by the Central Government under this Act for the collection of evidence. Hence, Investigation is only for the purpose of collecting the evidence with regard to proceeds of crime in hands of the persons suspected and their involvement under Section 3 of PMLA. It was seen in the case of, Dalmia Cement (Bharat) Limited v Assistant Director of Enforcement Directorate Writ Petition Nos. 36838 of 2014. 5. STATEMENT RECORDED BEFORE ED IS ADMISSIBLE It was seen in the case of, Chief Enforcement Officer v D. Uttamchand Jain CRL.A.(MD).No.912 of 2003, that the statement given before the Enforcement Director is a piece of admissible evidence during the investigation, but if a statement is made before a police officer it is inadmissible evidence, as per Section 25 of the Indian Evidence Act,1872. In, Ripen Kumar v Department of customs 2000 (55) DRJ (DB)9, it was held that, the evidence provided by a witness is relevant during the investigation, but the witness must be permitted to be cross-examined then such a statement can be termed as evidence of the witness or can be read as evidence. 6. WHAT IF THE STATEMENT IS RECORDED AFTER ARREST? It is violative of Article 20(3) if an accused person is compelled to be a witness against himself, as the officers of ED, can easily compel individuals to give certain statement through coercion, undue influence etc. In the case of, Directorate of Enforcement v Ratul Puri (2020) SCC online Del 97, it was seen that, the statement recorded under Section 50 of PML Act, is inadmissible if it is recorded after the arrest of the accused person by compulsion. And recorded statements are to be tested during the trial. 7, WHAT IF THE STATEMENT. RECORDED BEFORE ED IS RETRACTED AFTER? In the case of, A. Tajudeen v Union of India (2015) 4 Supreme Court Cases 435, it was seen that, A. Tajudeen and his wife retractedtheir statement(s), and contended that the same has been recorded under threat and against their will and compulsion of the officers of the Enforcement Directorate. The officers of ED can easily pressurize individuals to give false statements through coercion, threat and undue influence. The Hon'ble court held that, The statement so obtained through any improper means must be rejected brevi manu. The confession made by a person which is voluntary and free from any pressure, threat etc, can only be accepted. It was seen in the case of, Chief Enforcement Officer v D. Uttamchand Jain (supra). 8. THE BURDEN OF PROOF IS ON THE PROSECUTION TO SHOW THAT STATEMENT RECORDED IS VOLUNTARY In the case of, Vinod Solanki v Union of India (2008) 16 SCC 537, it was held that, the burden is on the prosecution to show that the confession obtained is voluntary and is not obtained by threat etc. A person accused of commission of an offence is not expected to prove that the confession made by him was obtained by inducement, threat etc. It had been also seen that, the detaining authority should consider the next retraction and must record its opinion before accepting the statement. 9. THERE IS NO INFRINGEMENT OF ARTICLE 20(3) WHEN A PERSON IS SUMMONED BEFORE ED Article 20(3) of the Constitution of India provides that, ‘no person accused of any offence shall be compelled to be a witness against himself’. It was seen in the case of, Dalmia Cement (Bharat) Ltd. V Assistant Director of Enforcement Directorate (supra), that mere registration of ECIR (Enforcement Case Information Report) would not make any person an accused of the offence of money-laundering. The only purpose of the investigation is to collect evidence. Issuing summons under Section 50(2), requiring a person to appear and make a statement is not violate of Article 20(3). CONCLUSION Power given to authority under PMLA is extensive, hence an investigating officer can easily misuse his powers. Person summoned before ED can easily be compelled to give a statement which is not in his favour under coercion, threat, undue influence. An Investigation is only done for the purpose of collecting evidence and one should know that and an investigating officer cannot harass a person physically or mentally just because a person summoned is responding to the summons issued. The purpose of an investigation is to collect evidence and issuing summons, it cannot be held to be violative of Article 20(3). But once the accused person gets arrested and is compelled to give certain statement then it is violative of Article 20(3). ***** Author : Sakshi Jain | LLB Student third year pursuing BBA LLB from VIPS (affiliated to IP University). Tags: Prevention of Money Laundering Act reserve bank of india Kindly Refer to Privacy Policy & Complete Terms of Use and Disclaimer. « Previous ArticleNext Article » Share Author Bio Name: Sakshi Jain Qualification: Student- Others Company: N/A Location: New Delhi, Delhi, India Member Since: 26 Oct 2021 | Total Posts: 3 View Full Profile My Published Posts Mandatory Inquiry/ Investgation By Magistrate Before Process Issuance U/S 202 Crpc Intercacies of Money Laundering Law View More Published Posts Join Taxguru's Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects. Join Our whatsApp Group Join Our Telegram Group Review us on Google One Comment Advocate R.P.Singh says: Very informative. Reply October 26, 2021 at 9:44 pm Leave a Comment Your email address will not be published. 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