TMI Blog2017 (7) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... at this stage, that those in public life are expected to be open to probity. Higher the position in life (or polity), higher the obligation (moral, if not legal) to be accountable. Endeavours to stall investigation into their affairs by the law enforcement agencies, particularly on technical grounds, have the potency of giving the impression that there is something to hide. There is nothing shown to the court from which it could be inferred that the issuance of summons by the respondents to the petitioners for investigation into the ECIR, in exercise of statutory powers, has caused, or has the effect of causing, any prejudice to any of them. - W.P.(CRL) 856/2016 & Crl.M.A. Nos. 4702/2016, 4704/2016, 10527/2016, 12181/2016, W.P.(CRL) 2044/2016 & Crl.MA. Nos.10657-58/2016, W.P.(CRL) 2862/2016 & Crl.M.A. Nos. 15292/2016. 18677/2016, W.P.(CRL) 245/2016 and Crl.M.A.1336/2016 - - - Dated:- 3-7-2017 - R. K. Gauba, J. For the Petitioners : Mr. Dayan Krishnan, Sr. Advocate with Mr. Mayank Jain, Mr. Madhur Jain and Mr. Parmatma Singh, Advocates For the Respondents : Mr. Sanjay Jain, ASG with Mr. Amit Mahajan, CGSC, Mr. Kunal Dutt, Ms. Karnika Singh and Mr. Vignaraj Pasayat, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was in session till 06.04.2016 in spite of which, through the summons issued by the respondents, it was being insisted that the petitioners appeared on 17.03.2016. 5. The first petition invoking the jurisdiction of this court under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.) prayed for the grant of the following reliefs: i) pass a writ/order/direction in the nature of certiorari thereby issuing direction to quash and set aside all proceedings and actions taken pursuant to the Enforcement Case Information Report bearing number ECIR/HQ/02/HIU/2015 as the same are without jurisdiction and authority of law; ii) pending hearing and adjudication of the subject writ petition, stay all and every proceedings initiated by respondent no.1 in pursuance of the Enforcement Case Information Report bearing number ECIR/HQ/02/HIU/ 2015; iii) pending hearing and final disposal restrain the respondents from taking any coercive action against the petitioners; iv) issue such other orders/directions as this Hon ble Court deed fit under the circumstances of the case 6. Going by the averments in the counter a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sub section (2) and (3) of Section 50 of the PML Act, 2002 in ECIR case no. ECIR/HQ/02/HIU/2015 against the petitioner by the respondent; and b) direct the respondent not to take any coercive action against the petitioner; c) declare that the officers of the Enforcement Directorate are police officers; and d) read down the provisions contained in section 50(2) and (3) of PMLA to the effect that the statements recorded therein may not be used as an evidence to incriminate the person giving the statement; and e) pass such other order or orders as this Hon ble Court may deem fit and proper in the facts and circumstances of the case. 8. The petitioner (Shri Picheswar Gadde) of the fourth above captioned petition (the fourth petition or case) claims to be a businessman of repute being also involved in the running of various educational institutions. From the averments made by him, it appears that he concededly was joint owner (with his wife) of the parcel of land described as farm house No.3-E, Dera Mandi, Mehrauli, New Delhi-110074 which was sold by him (and his wife) in August, 2011 to M/s. Maple Destination Dreambuild Pvt. Ltd., an entity of the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hadra Singh, members of his family and others to inquire into certain unexplained income from assets suspected to be disproportionate and allegedly acquired during his tenure as a Union Minister in 2009 to 2012. Sh. Vikramaditya Singh, by his pleadings, refers to a public Interest Litigation (PIL) initiated by a Non-Governmental Organization (NGO) Common Cause , it being Writ Petition (Civil) No.7240/2013 as the background of such action. 12. On the basis of facts and materials gathered during such preliminary enquiry, First Information Report (FIR) No.RC-AC-1-2015-A0004 was registered on 23.09.2015 by CBI, ACB, New Delhi for investigation into offences punishable under Section 13(2) read with Section 13(1)(e) of POC Act. Since the facts on the basis of which CBI had taken up investigation from the perspective of offences punishable under POC Act also appeared to be indicative of commission of the offence of money laundering punishable under PMLA, the matter was referred by the former agency to the Headquarter Investigation Unit (HIU) of the Directorate of Enforcement of the Department of Revenue in the Ministry of Finance, Govt. of India, New Delhi where, pursuant to the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby he (Shri Virbhadra Singh) is stated to have entrusted unto the said Anand Chauhan, an LIC agent, the responsibility of management of Shrikhand Orchard at Village Damrali, Rampur Bushar and for proceeds from the sale of apples to be invested in LIC policies. It is stated that the investigation conducted thus far has revealed that the said MOU prepared on four sheets of paper (stamp papers one non-judicial and the other three judicial, all of 2008) was ante-dated. The entry at serial no.1284 dated 11.06.2008 in the register of the stamp vendor respecting one of the said four stamp papers in the name of Anand Chauhan was forged. Similarly, the entry nos. 1283 and 1284 in the register of the stamp vendor would reveal corresponding sale of original stamp papers to have been made to one Laiq Ram, a resident of Kotkhai, Shimla who utilized the same for obtaining agricultural loans. (e) The petitioner Shri Chunni Lal Chauhan, has been working for gain as a commission agent at Parwanoo Mandi, Himachal Pradesh. The income from sale of apples of Shri Virbhadra Singh's Shrikhand orchard, Damrali in the year 2013, as declared in the revised returns filed by him is sought to be subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elve LIC policies were out of laundered money. Five of the LIC policies were prematurely surrendered, and the proceeds deposited in the account of Vikramaditya Singh. According to the respondents, the evidence gathered shows that the unaccounted money in the accounts of Vikramaditya Singh found its way into an immovable property and various bank accounts. (i) A Provisional Attachment order No.1/16 dated 23.03.2016 was issued under second proviso of Section 5(1) of PMLA attaching movable and immovable assets valued at ₹ 7,93,21,984/- of Shri Virbhadra Singh and his family members. This included a immovable property at Greater Kailash in name of Smt. Pratibha Singh. The Adjudicating Authority, PMLA has confirmed the said attachment. (j) An amount of ₹ 90 lakhs from out of ₹ 2.4 crores alleged loan given to Shri Virbhadra Singh was utilized by Shri Vikramaditya Singh to purchase a farm house at Dera Mandi, New Delhi in the name of his company M/s. Maple Destinations Dreambuild Pvt. Ltd. for the purchase of the said farm house. Another ₹ 30 lakhs was paid by two Cheques of ₹ 15 lakh each given by a firm M/s. Jai Durga Impex which has statedly been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LA against the petitioners and certain others, on the reference made for such action on the basis primarily of above-noted facts, circumstances and materials. The said Provisional Attachment Order was challenged by Shri Virbhadra Singh and Smt. Pratibha Singh by Writ Petition (Civil) No.4228/2016. Similarly, Shri Vikramaditya Singh and Ms. Aparajita Kumari have also assailed the adjudication proceedings resulting in provisional attachment by W.P.(Civil) No.3008/2016. Both the said writ petitions are pending in this court and interim orders granting some protection have been issued. 17. It may be added that, as per the submissions of the respondents, another Provisional Attachment order No.1/2017 was passed by the competent authority on 31.03.2017 under Section 5(1) PMLA in respect of the farm house at Dera Mandi at Mehrauli. The legality and validity of the said provisional attachment order has been challenged by another W.P.(Civil) No. 3909/2017 which is also pending in this court. 18. When the petitions at hand came up for hearing, questions were raised initially as to the overlap of the contentions urged and the prayers made in the above-mentioed three other pending writ p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crime including its concealment, possession, acquisition or use and projecting or claiming) it as untainted property shall be guilty of offence of money-laundering. 22. The offence of money-laundering, defined in Section 3 quoted above, if proved to have been committed leads to punishment which is provided by Section 4, the trial for such purposes to be held in the court of Sessions which is designated, in terms of Section 43 PMLA, as a Special Court, the procedure thereof being regulated generally by the Code of Criminal Procedure, 1973 (Cr.P.C.), as per Section 46, with certain improvements or modifications in terms of Sections 44 and 45 PMLA, the remedies in the nature of appeal and revision being guided by Section 47. As would be discussed at length later, the conjoint effect of Sections 44 and 45 PMLA is that the Special Court is empowered to take cognizance of the offence under Section 3 PMLA without the accused being committed to the said court for trial but this is conditional upon a complaint in writing being made for such action by the Director (of Enforcement) or any other officer of the Central or State Government specially authorized in this behalf, such author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners to above effect primarily arise from amendment of the Prevention of Money-Laundering Act, 2002 by the Prevention of Money-Laundering (Amendment) Act, 2005 (Act 20 of 2005), particularly of the provision contained in Section 45. Prior to the said amendment Section 45 (1)(a) declared that every offence punishable under the law (PMLA) shall be cognizable . The amendment of 2005 brought in force w.e.f. 01.07.2005 deleted the siad clause of Section 45(1) declaring the offence, inter alia, of money laundering, to be cognizable. The prime submission of the petitioners is that this amendment was clearly indicative of the intention of the legislature to take away the power of arrest and consequently to make the offence of money-laundering non-cognizable . 25. Arguing that the intention of the proceedings taken out by the respondents is void-ab-initio, it having been done without following the due procedure of law founded, as it were, on a document (ECIR) not contemplated by the statute, the curtailment of the rights and liberty of the petitioners being impermissible except through due process established by law and in line with the spirit of Article 21 of the Constitution of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edural law (Cr.P.C.) lays down extensive and elaborate provisions covering almost the entire spectrum of the action required to be taken right from the stage of reporting of a crime through the process of investigation leading to trial, if the offender and the evidence supporting the accusations against him have been found, till the stage of his guilt (or innocence) being determined with consequences, inter alia, in the form of punishment, flowing therefrom besides, of course, the remedies in the nature of revision or appeal and post-conviction processes. Having regard to the nature of offences specified in the general law (IPC), the procedural law (Cr.P.C.) is designed generally with the thought that the crime would ordinarily be reported to, and taken note of by, the police which, given the nature of offence would embark upon investigation - either within its own jurisdiction under the law or with appropriate authorization by the competent criminal court. Further, keeping in view their nature and effect on the individual victim or the society at large or, to put it simply, bearing in mind the gravity, the offences are also categorized so as to regulate the power of (or amenabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 204 Cr.P.C. against the persons mentioned in the police report, or against others, if the evidence submitted by the police justifies such action to be taken. The Magistrate may approve the report and cancel or close the case. Or, the magistrate may record reasons for not being satisfied with the investigation carried out and issue necessary directions including for further investigation. [see Chandra Babu v. State (2015) 8 SCC 774; Moti Lal Songara v. Prem Prakash (2013) 9 SCC 199; Dharmatma Singh v. Harminder Singh (2011) 6 SCC 102; Uma Shankar Singh v. State of Bihar(2010) 9 SCC 479; Minu Kumari v. State of Bihar (2006) 4 SCC 359; Gangadhar Janardan Mhatre v. State of Maharashtra (2004) 7 SCC 768; Jagdish Ram v. State of Rajasthan (2004) 4 SCC 432; State of Orissa v. Habibullah Khan (2003) 12 SCC 129; State of Maharashtra v. Sharadchandra Vinayak Dongre (1995) 1 SCC 42; H.S. Bains v State (1980) 4 SCC 631; Abhinandan Jha v. Dinesh Mishra (1967) 3 SCR 668 : AIR 1968 SC 117] 29. But, the above is the procedure, generally speaking, in relation to the cognizable offences (say, those provided in IPC) where there are no restrictions to taking of cognizance, including su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings (as envisaged, generally speaking, in the provisions contained in Sections 195 to Section 199 Cr.P.C.) are in position, by examining the complainant and his witnesses, if any, in terms of Section 200 Cr.P.C. - except in certain specified category of cases, illustratively complaint lodged by a public servant acting or purporting to act in discharge of his official duty. The Magistrate, having taken cognizance on a complaint, and having proceeded to examine the complainant and such of his witnesses as are immediately present under Section 200 Cr.P.C., is generally deemed to have embarked upon a pre-summoning enquiry which is similar to the investigative process by the police post-registration of FIR in cognizance offences. The Magistrate, if he finds sufficient evidence to have come on record during pre-summoning inquiry, may proceed to issue process under Section 204 Cr.P.C. to call upon the accused to face the trial. In contrast, if the facts and circumstances or nature of the case so requires, he may postpone the issue of process and carry out further inquiry (pre-summoning) which would be under Section 202 Cr.P.C. In certain fact-situations, such further inquiry under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CREF Finance Ltd. Vs. Shree Shanthi Homes (P) Ltd., (2005) 7 SCC 467, the taking of cognizance is not to be confused with issuance of process . The cognizance is taken of the offence and not of the offender. 35. The focus of discussion here is not on taking cognizance but on cognizable character of an offence. 36. It is commonly understood that if an offence is classified in law as cognizable , it means a police officer has a right to arrest the person responsible for such offence without the need of obtaining a warrant. As the following discussion would demonstrate this common understanding or, shall we say, assumption is based on the conjoint reading of the definition of the expression cognizable offence and the provision in the Code of Criminal Procedure, 1973 relating to powers of police to make arrest, as they stood till a few years ago. 37. The general procedural law (Cr.P.C.) defines the expressions cognizable offence , and non-cognizable offence , as indeed the cases involving such offences, by Section 2(c) and Section 2(l) as under: (c) cognizable offence means an offence for which, and cognizable case means a case in which, a police officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is declared, in no uncertain terms, not only by such references in various provisions of Cr.P.C., including under Section 2 (c) quoted above, but primarily by Section 4 which reads thus: 4. Trial of offences under the Indian Penal Code and other laws. - (1) All offences under the Indian Penal Code (45 of 1860) shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained. (2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provision, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. 40. It is trite that the Code of Criminal Procedure, 1973 regulates the procedure for the investigation, inquiry or trial not only of the IPC offences but also of special law offences but, in the case of latter (the Special Law Offences) application of Cr.P.C. provisions is subject to specific provisions, (if any), of such special law relating to, inter alia, the procedure for investigation, inquiry, trial or otherwise dealing with offen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact-situation(s) wherein a police officer may arrest without warrant . The provision needs to be quoted in extenso (as it presently stands post-amendment brought into effect from 01.11.2010) as under: 41. When police may arrest without warrant.-(1) Any police officer may without an order from a Magistrate and without a warrant, arrest any person- (a) who commits, in the presence of a police officer, a cognizable offence; (b) against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists that he has committed a cognizable offence punishable with imprisonment for a term which may be less than seven years or which may extend to seven years whether with or without fine, if the following conditions are satisfied, namely:- (i) the police officer has reason to believe on the basis of such complaint, information, or suspicion that such person has committed the said offence; (ii) the police office is satisfied that such arrest is necessary- (a) to prevent such person from committing any further offence; or (b) for proper investigation of the offence; or (c) to prevent such person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrested and the offence or other cause for which the arrest is to be made and it appears therefrom that the person might lawfully be arrested without a warrant by the officer who issued the requisition. (2) Subject to the provisions of Section 42, no person concerned in a non-cognizable offence or against whom a complaint has been made or credible information has been received or reasonable suspicion exists of his having so concerned, shall be arrested except under a warrant or order of a Magistrate. 43. It is clear from bare reading of the various clauses of Section 41 quoted above that, even under the general law, a police officer has no blanket power or jurisdiction to arrest a person only because such offence (here, the IPC offence) is classified by the First Schedule to Cr.P.C. as a cognizable offence. The situations covered by clauses (c) to (i) of Section 41(1) are not of routine nature and, therefore, would not assist in the present discussion. The first clause (a) of Section 41(1) also deals with a special circumstance where cognizable offence is committed in the presence of a police officer . Thus, the remaining two clauses of Section 41(1) provide better guid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 154 Cr.P.C. and embark upon investigation. This may be illustrated by reference to all such IPC offences included in the first part of the First Schedule to Cr.P.C. as attract punishment which may be imprisonment for a term less than seven years but may have been specified by the fourth column as cognizable, they including, for example, the offences punishable under Sections 129 IPC (Public Servant negligently suffering prisoner to escape); Section 133 IPC (Abetment of assault by soldier, sailor or airman on his superior officer when in execution of his office); Section 148 IPC (Rioting, armed with deadly weapon); Section 160 IPC (Punishment for committing affray); Section 212 IPC (Harbouring an offender); Section 279 IPC (Rash driving or riding on a public way); Section 304-A IPC (causing death by rash or negligent act); Section 324 IPC (voluntarily causing hurt by dangerous weapons or means). The list can be endless. 46. In view of the above, it would be wrong, if not naive, to construe the expression cognizable offence so simplistically as to connote an offence where the police officer has a power to arrest without warrant. Whether or not the power vests in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) read with amended provision of Section 41 Cr.P.C., so as to denote an offence in connection with which a police officer may arrest a person (respecting whose complicity there is credible information or reasonable suspicion) without warrant, such authority being subject to restrictions in law. 50. Since classification of the offence - cognizable or non-cognizable - has also some connection with the investigative process, it is necessary to mention here another argument of the petitioners based on the ruling in State of Haryana and Ors. Vs. Bhajan Lal and Ors., 1992 Suppl. (1) SCC 335 wherein the court had observed that (w)here the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without order of a Magistrate as contemplated under Section 55 (2) of the Code. Similar view was taken in Om Prakash and Anr. Vs. Union of India and Anr., (2011) 14 SCC 1. The submission of the petitioners is that if the contention that the offence is non-cognizable were to be upheld, any investigation without authorization from the court of Magistrate (or Special Court) would be impermissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the above, it may be mentioned that the provisions of Prevention of Terrorism Act, 2002 (since repealed) created new offences (Sections 3, 4 and 6) which were classified by Section 49 to be cognizable and non-bailable, the forum for trial being Special Court established in terms of Section 23. Similar is the dispensation under Narcotics Drugs and Psychotropic Substances Act, 1985, Prevention of Corruption Act, 1988, Maharashtra Control of Organized Crime Act, 1999 and Protection of Children from Sexual Offences Act, 2012. Noticeably, however, the authorities vested with the power to investigate and bring the offenders to justice in all these special laws continues (or continued) to be police, the agency generally entrusted with the responsibility of investigation of crimes. By and large, the offences under these enactments have been cognizable and the cognizance by the specified court is upon report (under Section 173 Cr.P.C.) of the police officer on completion of investigation, as envisaged in Section 190(1)(b) Cr.P.C. 55. To the above list, one may add the special law known as Official Secrets Act, 1923. Though the offences created by this legislation (Sections 3, 5, 6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablished for dealing with the civil action. For trial of the offenders for the penal offences (Sections 59 to 64), the court of Magistrate of the First Class is generally the forum specified (Section 73), save for graver offences punishable under Section 59 (iii) and (iv), which are to be tried by the special courts established under Section 74. The law establishes authorities responsible for enforcement of its various provisions, they including the Food Authority, at the apex, and other functionaries like Food Safety Officer, Designated Officer, Food Analyst etc. A conjoint reading of Sections 41, 42 and 47, besides others, would show that the Food Safety Officer and the Designated Officer are generally responsible for detection of crimes under this law, the investigation required in such wake and for bringing the offenders to justice and, for such purposes, they have been vested with the requisite powers of search, seizure, summoning, investigation and prosecution. The Commissioner of Food Safety is vested with the discretion, by Section 69, to supervise and control the compounding of such offences as are not punishable with imprisonment, subject to certain restrictions. Pertine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need arises to do so, in exercise of the power regulated by Section 41 Cr.P.C. But, upon completion of investigation, the police officer would have the criminal action initiated in the court by calling upon the enforcement authorities under the special law to launch prosecution by filing a complaint before the competent court and consequently, the cognizance would be, not on the police report under Section 190(1)(b) but, on such complaint under Section 190(1)(a) Cr.P.C. 60. The Customs Act, 1962 provides a study in sharp contrast to the above mentioned special enactments but, as we shall see in due course, this law, the Customs Act, is nearest home as equivalent to the one which is the subject matter of the present proceedings, namely, the PMLA. 61. The Customs Act, 1962 was enacted to consolidate and modify the then existing law so as to sternly and expeditiously deal with smuggled goods and curb the loss to the revenue. The legislation contains detailed provisions pertaining to prohibition on importation or exportation of goods, levy of duty upon such transactions, assessment of the revenue payable, realization thereof, etc. It establishes its own machinery known as office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances. 63. In above context, reference may be made to Ramesh Chandra Mehta v. State of W.B., (1969) 2 SCR 461, wherein a Constitution bench ruled thus : 25. ... a Customs Officer is under the Act of 1962 not a police officer within the meaning of Section 25 of the Evidence Act and the statements made before him by a person who is arrested or against whom an inquiry is made are not covered by Section 25 of the Indian Evidence Act. 64. The above view was reiterated in Illias v. Collector of Customs, (1969) 2 SCR 613; State of Punjab v. Barkat Ram, (1962) 3 SCR 338; and Om Prakash v. Union of India, (2011) 14 SCC 1. 65. Thus, similar to the provisions of PMLA, the scheme of the Customs Act, 1962, while creating penal offences, establishes its own machinery for investigation and prosecution. The officers of the customs are empowered by the law to arrest the persons respecting whose complicity there is reason to believe. It is on the complaint of the empowered officer that the court takes cognizance. Some of the offences are classified as cognizable, the others being non-cognizable. Obviously, therefore, there would be no power of arrest vesting in customs officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived from such offences. The Basic Statement of Principles, enunciated in 1989, outlined basic policies and procedures that banks should follow in order to assist the law enforcement agencies in tackling the problem of money-laundering. In the wake of obligations emanating, inter alia, from the adoption of the recommendations of Financial Action Task Force established at the summit of seven major industrial nations, held in Paris from 14th to 16th July 1989, followed by the adoption of the Political Declaration and Global Programme of Action by the United Nations General Assembly through its Resolution No.S-17/2 of 23rd February 1990 and the Declaration made in June 1998 by the United Nations in the Special Session on Countering World Drug Problem Together, on the basis of report of the Standing Committee submitted on 4th March 1999, the Parliament enacted the Prevention of Money-Laundering Act, 2002 with the avowed objective to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. The law (PMLA) has been amended several times, lastly by the Finance Act, 2016 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis for such action being material in the possession of such authority. The Director, or the Deputy Director, having recorded such belief in writing is empowered, by Section 5(1), to direct provisional attachment of the suspect asset (money or property) which, it must be added, is subject to appropriate further proceedings before the Adjudicating Authority constituted under Section 6, it being a high powered body consisting of the Chairperson and two Members, the detailed provisions conferring upon such Authority all trappings of an independent Tribunal, the orders passed thereby being amenable to appeal before the Appellate Tribunal established under Section 25. 72. The special legislation (PMLA) seeks to focus, generally speaking, on proceeds of crime and, particularly, on certain specified offences each being referred in the law as scheduled offence , an expression defined in Section 2(y), taking one to the Schedule appended to the enactment. The Schedule is divided broadly into three parts, the first (Part A) including certain offences under Indian Penal Code and certain offences under special laws like Narcotic Drugs and Psychotropic Substances Act, 1985, Explosi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is important to note that the enforcement officers are conferred by Section 19 PMLA with the power of arrest. 76. This provision must be quoted verbatim as under: 19. Power to arrest.-(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. (2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 157 Cr.P.C. has already been submitted, in terms of the special law, the Adjudicating Authority, though the repository of both reports (of provisional attachment and arrest) deals eventually only with the civil action, the authorization for detention in custody being granted by the judicial magistrate, under Section 19(3), for which purposes, a general reading of the law would confirm, Section 167 Cr.P.C. would apply. 78. The trial for the offences created by PMLA is held in the court of sessions designated as Special Court in terms of Section 43. It is necessary to take note of Section 44 in this regard, which reads thus: 44. Offences triable by Special Courts.-(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) an offence punishable under Section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed: Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall continue to try such scheduled offence; or (b) a Special Court may, upon a complaint made by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 43(2), Section 44(1)(d), Section 44(2), Section 45(1)(1a)(2) and Section 47. 80. What merits particular note is the fact that the Special Court which is empowered to take cognizance of the offence of money-laundering under Section 4 or any scheduled offence connected thereto acts, in terms of Section 44(1)(b), upon a complaint by the competent authority (specified under Section 45), the judicial act of taking cognizance thus being under Section 190(1)(a). 81. It is apposite to add here that Section 45 (1-A) of PMLA declares in clear terms that notwithstanding anything contained in the Code of Criminal Procedure or any other provisions of PMLA no police officer shall investigate into an offence under this Act unless specially authorized (to do so) , the special authorization vis-a-vis the police officer by the Central Government and subject to such conditions as may be prescribed. The PMLA, by Section 2(1)(na), defines the term investigation as including all the proceedings under this Act conducted by the Director or by an authority authorised by the Central Government under this Act for the collection of evidence. Noticeably, there is no reference to investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed. (2) The limitation on granting of bail specified in sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. 84. It was pointed out by the learned counsel for the petitioners that though the heading of Section 45 does seem to indicate the offences under this law are cognizable , there is no provision on the statute book declaring any offence of PMLA to be cognizable. It is further pointed out that Section 45(1-A) makes it clear that police officers do not have the authority in law to investigate into PMLA offences (unless there is special authorization to such effect) and that the power of arrest in terms of Section 19 is restricted to the enforcement officers, the cognizance required to be taken by the Special Court being contingent upon a complaint in writing being made by such functionaries only. It was also pointed out that prior to the amendment of 2005, there was a clear stip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revention of Money-Laundering (Amendment) Act, 2005 (Act No.20 of 2005), the clause contained in Section 45(1)(a) quoted above was deleted. The clause (b) of Section 45(1), thus, merged with the remaining phraseology employed in the existing provision so as to become Section 45(1), now a provision intended to regulate primarily the issue of release on bail and the mode of taking cognizance, the pre-requisite being a complaint in writing by the Director or other authorized officer. The existing sub-Section (2) of Section 45 quoted above, by this amendment, was accordingly modified so as to remove reference to clause (b) of sub-Section (1). A new sub-Section (1-A) was inserted which contains the general restrictions against a police officer investigating into an offence under PMLA. 88. The submissions of the petitioners are that the legislature took a conscious decision of omitting Section 45(1)(a) and the only intendment thereof could be that the offences under PMLA are to be treated as non-cognizable. It was argued that the heading of the provision contained in Section 45 is not part of the legislation and cannot control its interpretation. It was submitted that the introductory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 299, way back explained the rules of interpretation with reference to marginal heads thus: 1. If the language of the sections is clear and is actually inconsistent with the headings, the headings must give way. 2. If the language of the section is clear, but, although more general, is not inconsistent with the headings, the sections must be read subject to the headings. 3. If the language of the sections is doubtful or ambiguous, the meaning which is consistent with the headings must be adopted. 92. In Bhinka Ors. vs. Charan Singh, 1959 Supp (2) SCR 798, a bench of three Hon'ble Judges of the Supreme Court quoted, with approval, Maxwell on Interpretation of Statutes, (10th Edition, page 50), as under: The headings prefixed to sections or sets of sections in some modern statutes are regarded as preambles to those sections. They cannot control the plain words of the statute but they may explain ambiguous words. (emphasis supplied) 93. The court in Bhinka Ors. (supra) observed that if there is any doubt in the interpretation of the words in the section, the heading certainly helps us to resolve that doubt . In K.P. Varghese vs. Income Tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssist, if the need arises, to understand the true import of the statutory clause. Relevance of deletion 96. The petitioners argument, however, also revolves around the fact that clause (a) of Section 45(1) was deleted by the Parliament while amending the law in 2005. One may recall it is the said clause which declared the offence under PMLA to be cognizable . In the submission of the learned counsel for petitioners, the omission is indicative of the intention. Reliance is placed on Bhagat Ram Sharma vs. Union of India Ors., 1988 (Supp) SCC 30; D.R. Fraser Co. Ltd. vs. The Minister of National Revenue, 1948 SCC OnLine PC 65; and Commissioner of Central Excise, Trichy vs. Dalmia Cement (Bharat) Ltd., (2006) 126 DLT 597 (DB). 97. In Bhagat Ram Sharma (supra) it was observed that when the legislature enacts an amending law deleting the existing provision, substituting it by a new provision it has the effect of repeal of the existing provision , the withdrawal of the existing provision being also called an amendment. In Dalmia Cement (Bharat) Ltd., (supra), a division bench of this Court quoted, with approval, the observations of the Privy Council in the case of D.R. Fras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en any police officer in India can arrest an offender without warrant. At the same time, under Section 19 of the Act, only a Director or a Deputy Director or an Assistant Director or any other officer authorised, may arrest an offender. Clearly, there was a conflict between these two provisions. Under Section 45(1)(b) of the Act, the Special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint made in writing by the Director or any other officer authorised by the Central Government. So, what would happen to an arrest made by any police officer in the case of a cognizable offence? Which is the court that will try the offence? Clearly, there were inconsistencies in these provisions. They have now been removed. We have now enabled only the Director or an officer authorised by him to investigate offences. Of course, we would, by rule, set up a threshold; and, below that threshold, we would allow State police officers also to take action. The second anomaly that we found was that the expression investigation officer and the word investigation occur in a number of sections but they were not defined in the Act. Consequently, one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Ors. vs. Martin Lottery Agencies Limited, (2009) 12 SCC 209, to submit that speech of the Hon'ble Ministers in the Houses of Parliament may be taken to be a valid tool for interpretation of the statute. 102. In A.K. Gopalan vs. State of Madras, 1950 SCR 88, it was observed thus:- 112. A speech made in the course of the debate on a Bill could at best be indicative of the subjective intent of the Speaker, but it could not reflect the inarticulate mental processes lying behind the majority vote which carried the Bill. Nor is it reasonable to assume that the minds of all those legislators were in accord. (emphasis supplied) 103. In State of Travancore-Cochin v. Bombay Co. Ltd. [AIR 1952 SC 366], the court ruled: 16. ... the use made by the learned Judges below of the speeches made by the members of the Constituent Assembly in the course of the debates on the Draft Constitution is unwarranted. That this form of extrinsic aid to the interpretation of statutes is not admissible has been generally accepted in England, and the same rule has been observed in the construction of Indian statutes (emphasis supplied) 104. In State of Mysore vs. R.V. Bidap, (197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Debates in statutory interpretation, assailing an Act on the ground of insufficiency of Parliamentary Debates is an unheard of and unsustainable proposition in law. (emphasis supplied) 108. Another Constitution Bench in Supreme Court Advocates-on-Record Assn. v. Union of India, (2016) 5 SCC 1, has reiterated the consistent view of the court observing that Parliamentary Debates ought not to be relied upon to interpret the provisions of the Constitution or the statute if there is no ambiguity in the language used , since such provisions ought to be interpreted independently , the court not to be unduly influenced by the speeches made , and that confirmation of the interpretation may be sought from the Parliamentary Debates but not vice versa . 109. Thus, it would not be correct to say that the speeches made in the legislature at the time of consideration and passage of an enactment reflect the legislative intent. Such speeches are at best indicator of what may have been the intent behind the introduction of the Bill in the legislature that eventually became a law. If the language of the legislation is clear and unambiguous, the external tool of reference to debate in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zable in relation to the offences under PMLA, in the marginal head of Section 45 cannot be wished away. It is part of the law as originally enacted and remains unamended. Of course, the marginal head cannot control the meaning of the main provisions. It is only a broad indicator of the content of each section. After the amendment, there is no clause appearing in Section 45 or, for that matter, in any other provision of PMLA, declaring the classification (cognizable or non-cognizable) of the offences created by the special statute. In this view, the continued use of the expression cognizable in the heading of Section 45, which cannot be unintended, will have to be comprehended and construed in the light of overall scheme of the law. Precedents 114. This court is not the first one called upon to interpret the provisions of PMLA. There have been cases where the courts have addressed such or similar arguments in the context of the same legislation and, therefore, one has the advantage of judicial view taken in such previous cases. 115. The matter involved in Gautam Kundu Vs. Directorate of Enforcement, (2015) 16 SCC 1, arose out of judgment of the High Court of Calcutta dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected the other argument based on the assumption that the offence is non-cognizable holding the special law confers the jurisdiction upon the Special Court to take cognizance which by itself cannot take away the powers of the authorities to investigate and arrest. The petitioners had also argued in that case that the authorities under PMLA were not scrupulously following the prescription of Chapter XII of the Code of Criminal Procedure (relating to the information to the police and their powers to investigate) which was causing prejudice. The learned division bench noted that the special law prescribed its own procedure. It noted, inter alia, the various provisions of PMLA and the rules framed thereunder, particularly the Prevention of Money-Laundering (the forms and manner of forwarding a copy of order of arrest of a person alongwith the Material to the Adjudicating Authority and its period of Retention) Rules, 2005. The contentions were rejected with observations that the law has prescribed a complete procedure giving ample power to the authorities prescribing the methodology of its exercise and thereby putting in position sufficient safeguards . 118. The case of Mukesh Kuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rosecution under PMLA were separate stages and the case was still at the initial stage of investigation, the petitioners being obliged under the law to appear in compliance with the summons. 120. The decision in Chhagan Chandrakant Bhujbal Vs. Union of India, 2016 SCC Online Bom 9938, was rendered by a division bench of the High Court of Bombay on a petition seeking issuance of writ of Habeas Corpus against the backdrop of investigation undertaken for offence of money-laundering. The petitioner had been arrested in the said case, the prime contentions raised by him being that the action taken was impermissible since the offence punishable under Section 4 PMLA is a non-cognizable offence, the arrest could not be effected without permission of the competent court, the other grounds concerning grievances that the arrest had been effected by an officer who was not duly authorised and who had not followed the procedural safeguards. The learned division bench dismissed the petition holding, inter alia, that PMLA is a complete Code which overrides the general law while rejecting the contention that by the amendment of 2005, the offence of money-laundering had been rendered non-cognizab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orms an authoritative element termed as ratio decidendi. An interim order which does not finally and conclusively decide an issue cannot be a precedent. Any reasons assigned in support of such non-final interim order containing prima facie findings are only tentative. Any interim directions issued on the basis of such prima facie findings are temporary arrangements to preserve the status quo till the matter is finally decided, to ensure that the matter does not become either infructuous or a fait accompli before the final hearing... Whether PMLA offences are cognizable? 123. It is clear from the above discussion that this court has to find from the overall scheme and plain meaning of the language employed in the law as to whether the offences under PMLA are cognizable or not and if so, to what effect. 124. It must be recapitulated here that the scheme of PMLA, as may be gathered from the plain meaning of the language of the various provisions of the statute, is to create a machinery for investigation and enforcement outside the general system of investigation of crimes by police agencies. The police officers are explicitly kept out, unless there is a specific authorisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the authorization to the Director or other specified officers to take up the investigation or exercise any of the powers thereby conferred requires prior approval from the court in each case. 126. In view of the above, it must be concluded that notwithstanding the deletion of clause (a) of the then existing sub-section (1) of Section 45 PMLA, by the amendment of 2005, the offences under PMLA continue to be cognizable in the sense that a person respecting whom there is a reason to believe to be guilty for such offence may be arrested by the officer empowered by the law in terms of Section 19 without the need of obtaining warrant of arrest from the court. Thus, the use of the expression cognizable in relation to PMLA offences would be different from the one applied for general law offences (say, IPC offences) and consequently, the definition of the expressions cognizable offence and cognizable case as appearing in Section 2(c) Cr. P.C. would have to be read and applied mutatis mutandis with suitable modification - that is to say, by substituting the words a police officer and instead referring to the officers mentioned in Section 19 PMLA. SAFEGUARDS 127. As in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, and in accordance with, due procedure of law. The obligations under the relevant provisions of law as enacted by the legislature or as declared by the Constitutional courts regulate the conduct not only of police but also other investigative agencies under special legislations. This undoubtedly holds good qua the investigating machinery under PMLA as well. Nothing said heretofore or hereinafter in this judgment, therefore, is to be construed as in any manner diluting the rights of every person guaranteed under the law of the land to the fair procedure in the matter of investigation or arrest. 130. The Code of Criminal Procedure does not define the expression accused . The term is generally understood to connote a person suspected of having infringed the law for which he is liable to be convicted and subjected to punishment. In contrast to a person who stands convicted (upon his guilt having been proved), a person referred to as an accused is one against whom accusations have been made, the effort of the proceedings taken out being to prove and substantiate the same. It is this endeavour which is undertaken in two stages, the first being of investigation and the second, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act, 1878 which was later repealed and replaced by the Customs Act, 1962. Under some provisions similar to those of the Customs Act, certain statements had been recorded by the Customs officer which were sought to be tendered in evidence in the court, their admissibility having been questioned on the ground the officer of customs was a police officer within the meaning of Section 25 of the Evidence Act, rendering such statement to be unavailable. The contentions were rejected with the observations that the Customs officer was not a police officer nor was he empowered to do or had undertaken investigation into an offence, the purpose of inquiry embarked upon by him being to prevent smuggling and at the stage of collecting evidence in the course of such probe he was not accusing the person of any offence. It is on this reasoning that the statement recorded by such officer of the Customs was held to be admissible on the ground that the law permitted him to examine any person who is suspected or believed to be concerned in such activity. Reference has already been made to the cases reported as Illias (supra); State of Punjab v. Barkat Ram (supra); and Om Prakash v. Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n tax evasion at the cost of public exchequer. Applying the just, fair and reasonable test‟ we hold that there is no merit in the stand of appellant before us. 136. In Central Bureau of Investigation Vs. State of Rajasthan and Ors., (1996) 9 SCC 735, the prime contentions were that the offence under FERA which was subject matter of investigation was non-cognizable and there was a need for formal permission under Section 155(2) Cr.P.C. to be obtained from the court of Magistrate. This contention and request having been rejected by the Chief Judicial Magistrate, a view upheld by the High Court in the challenge brought before it, was reiterated before the Supreme Court. While dismissing the appeal, the court ruled thus: 28. FERA is a special legislation relating to regulation of foreign exchange. FERA is also a Central legislation enacted at a later point of time than the DSPE Act which was enacted in 1946. In our view, Sections 4 and 5 of the Code of Criminal Procedure will not come in aid of the investigation of the offences under FERA by a member of police force like an officer of DSPE in accordance of the Criminal Procedure Code. Sections 4 and 5 of the Code of Cri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code of Criminal Procedure particularly under Section 167 (2) or under Section 173 Cr.P.C were not applicable and that, under the provisions of the said special laws it cannot be said that either the Officer of Enforcement or the Customs Officer is not empowered with the power of investigation though not with the power of filing a final report as in the case of a police officer . 138. The case of Nandini Satpathy (supra) referred to in the decision of Poolbandi (supra) is locus classicus in which the expression any person as appearing in Section 161 Cr. P.C. came to be construed, in the context, inter alia, of the guarantee under Article 20(3) against self-incrimination. The procedural law, by Section 160 Cr. P.C., empowers a police officer making an investigation, to require the attendance of any such person as appears to be acquainted with the facts and circumstances of the case making it obligatory for such person to attend upon being so required. Section 161 Cr. P.C. which falls in the Chapter XII of Cr. P.C. relating to the powers of police to investigate reads, to the extent relevant here, as under: 161. Examination of witnesses by police - (1) Any police officer m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of seeking remand of a person arrested (under Section 167) with filing of a formal report on completion of investigation (under Section 173) are irrelevant in the case of investigation by empowered officers under PMLA. Same is the case of provisions contained in Section 162 Cr.P.C. or Section 25 of the Evidence Act generally prohibiting use as evidence of statements made by an accused (or a suspect) to the police. 141. The Enforcement officers empowered by PMLA to make investigation into the offences under the said law are not to be equated with police officers. The law confers upon them requisite powers to carry out investigation and collect evidence. The said power includes the power to issue summons to any person whose attendance is considered necessary and compelling his attendance, whether to give evidence or to produce any records and to examine him on oath , in terms of Section 50(2) and (3), or to put any person under arrest (without warrant) upon satisfaction as to his complicity. These powers necessary for investigation do not render the authorities under PMLA same as police. The general guidelines governing the arrest procedure, as envisaged in the Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st record reasons in writing for forming belief about such person being guilty of an offence under PMLA. [Section 19(1)] (v) The fundamental right guaranteed by Article 22(1) is ensured as the person arrested under PMLA investigation is entitled in law to be informed of the grounds for such arrest . [Section 19(1)] (vi) The arresting officer is obliged by the law to report the fact to the superior independent statutory authority (Adjudicating Authority) by making over to it, in confidence, copy of the material, the recorded reasons and connected proceedings, such authority, in turn, being obliged by law to retain the said record in its safe custody, the procedure and period prescribed by the Rules being such as to ensure transparency and accountability. [Section 19(2) read with corresponding Rules] (vii) The fundamental right guaranteed by Article 22(2) is ensured since the arresting officer is obliged by the law not to detain the arrestee for more than twenty-four hours, that being the period within which he must be taken before the jurisdictional Judicial Magistrate. [Section 19(3)] (viii) The proceedings before the Judicial Magistrate upon the arrestee being produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C. recorded by the police, and in other pronouncements concerning similar powers of officers of the Customs Department, as noted earlier, provide a complete answer to the apprehensions that have been expressed. 144. There is no requirement in law that an officer empowered by PMLA may not take up investigation of a PMLA offence or may not arrest any person as permitted by its provisions without obtaining authorization from the court. Such inhibitions cannot be read into the law by the court. 145. The prime argument of the petitioners is of political vendetta. This argument is not supported by any material. These proceedings are not the appropriate forum for the court to examine such plea which, in the interest of the petitioners themselves, must be left for it to be pressed, if they were so advised and if they have material to substantiate the same, at some appropriate stage in future. Suffice it to observe in this context, and at this stage, that those in public life are expected to be open to probity. Higher the position in life (or polity), higher the obligation (moral, if not legal) to be accountable. Endeavours to stall investigation into their affairs by the law enforce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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