TMI Blog2017 (7) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... object and purpose of the PMLA. We are not inclined to pass any orders of restraint as sought by the petitioner in the present application. In case the authorities under the PMLA invoke their power under Section 19 of the said Act, they shall comply with the requirements of Section 19 of the Act and also adhere to the guidelines laid down in Sections 41 and 41A of the Code as explained herein above. - W.P. (CRL) 852/2017 - - - Dated:- 8-5-2017 - MR. VIPIN SANGHI MS. DEEPA SHARMA JJ. Petitioner Through: Mr. Kirti Uppal, Sr. Adv. with Mr. Sidhant Asthana, Sahiba Pantel, Peeyush Ranjan, Sidharth Chopra, Adv Respondents Through: Mr. Vinod Diwakar, CGSC Mr. Anup Singh Rauthan, Asstt. Director (IO) VIPIN SANGHI, J. (ORAL) Crl.M.A.7706/2017 (u/s 482 Cr.P.C. on behalf of the petitioner) 1. Issue notice. Mr. Vinod Diwakar, Central Government Standing Counsel accepts notice on behalf of the respondents. 2. This application has been preferred by the petitioner to seek an order of restraint against the respondents from taking any coercive steps against the petitioner during the course of proceedings under Section 50(2) and Section 50(3) of the Prevent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to seek bail during pendency of the writ petitions. In course of its discussion, the Division Bench, inter alia, observed that it is mandatory for the respondents to follow the procedure prescribed under the Code of Criminal Procedure in the absence of any inconsistent provision under the PMLA concerning investigation, arrest and or other proceedings. Prima facie we are of the view that it was mandatory for the respondents to comply with the provision of Sections 155, 177(1) and 172 of the Code of Criminal Procedure in case the offence is non-cognizable. However, should this court reach a conclusion that the offence under PMLA is held to be cognizable, the respondents were bound to follow and comply with Sections 154, 157 of the Code of Criminal Procedure . The Court held that in the absence of procedure having been followed, the right of the petitioners under Article 21 of the Constitution stood violated. The Division Bench allowed the bail applications of the petitioners before it, upon compliance of several terms and conditions. We are also informed that the Special Leave Petition preferred before the Supreme Court against the order passed in Gurucharan Singh (supra) stands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution is not available at this stage to the petitioner. 9. We have heard learned counsels on both sides and given our thoughtful consideration to the matter. We have examined the provisions of the PMLA as also the order passed by the Division Bench in Gurucharan Singh (supra). The petitioner by way of this application is seeking a relief in the nature of anticipatory bail. At the outset, we may notice that under the PMLA, there is no specific provision dealing with the grant of anticipatory bail. It is for this reason, that the petitioner has moved the present application in these proceedings, rather than preferring an independent proceeding to seek anticipatory or pre-arrest bail. We may now proceed to notice the statutory scheme envisaged under the PMLA to appreciate and deal with the submissions of the parties. . 10. The PMLA, inter alia, creates the offence of money laundering (see Section 3); prescribes the punishment for the said offence (see Section 4); creates and empowers the authorities for the purpose of the Act (see Section 49 read with Section 2(c), 2(j) and 2(k)), inter alia, to carry out investigation to collect evidence (see Section 2(na)); to summo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Pertinently, notwithstanding anything contained in the Code or any other provisions of the PMLA, the offence under the PMLA shall not be investigated by a police officer (see Section 45(1A), unless specifically authorized by the Central Government generally or by a special order, and subject to the conditions that may be prescribed (see Section 45(1A). Investigation includes all the proceedings under the Act conducted by the Director or by an authority authorised by the Central Government for collection of evidence (see Section 2(na)). Thus, investigation is tasked to the Director or an authority authorised by the Central Government, who (unless specifically authorised) cannot be a police officer. A range of officers including officers of police are empowered and required to assist the authorities in the enforcement of this Act (see Section 54). The fact that the authorities for the purposes of the Act are not police officers is evident from the aforesaid provisions, which provide that the investigation to collect evidence under the Act shall be conducted by authorities under the Act, and not by a police officer, and inter alia, police officers are empowered and requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a Central Excise Officer under the Act has power to submit a charge-sheet under Section 173 of the Code of Criminal Procedure. Under Section 190 of the Code of Criminal Procedure a Magistrate can take cognizance of any offence either (a) upon receiving a complaint of facts which constitute such offence, or (b) upon a report in writing of such facts made by any police officer, or (c) upon information received from any person other than a police officer, or upon his own knowledge or suspicion, that such offence has been committed. A police officer for purposes of clause (b) above can in our opinion only be a police officer properly so-called as the scheme of the Code of Criminal Procedure shows and it seems therefore that a Central Excise Officer will have to make a complaint under clause (a) above if he wants the Magistrate to take cognizance of an offence, for example, under Section 9 of the Act. Thus though under sub-section (2) of Section 21 the Central Excise Officer under the Act has the powers of an officer incharge of a police station when investigating a cognizable case, that is for the purpose of his inquiry under sub-section (1) of Section 21 . All tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of the Code of Criminal Procedure, 1898 relating respectively to searches and arrests made under that Code. Section 19 lays down that every person arrested under the Act shall be forwarded without delay to the nearest Central Excise Officer empowered to send persons so arrested to a Magistrate, or, if there is no such Central Excise Officer within a reasonable distance, to the officer incharge of the nearest police station. These sections clearly show that the powers of arrest and search conferred on Central Excise Officers are really in support of their main function of levy and collection of duty on excisable goods . (emphasis supplied) 18. The situation is no different under the PMLA. The PMLA is a special Act, the object whereof is to prevent money laundering and to confiscate properties derived from or involved in money laundering. The authorities under the Act are empowered to work the Act and while doing so, inter alia, to carry out investigation i.e. to summon persons and require them to give evidence and produce records; to record their statements; to attach properties involved in money laundering; to carry out search and seizure of properties; to search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffence. The Supreme Court proceeded to examine the provisions of the NDPS Act and concluded that: 20. These provisions found in Chapter V of the Act show that there is nothing in the Act to indicate that all the powers under Chapter XII of the Code, including the power to file a report under Section 173 of the Code have been expressly conferred on officers who are invested with the powers of an officer-in-charge of a police station under Section 53, for the purpose of investigation of offences under the Act . (emphasis supplied) The Supreme Court further observed that in respect of the NDPS Act: 21. The Act was enacted for the control and regulation of operations relating to narcotic drugs and psychotropic substances. Under Sections 41, 42, 43, 44 and 49 of the Act certain powers of arrest, search and seizure have been conferred on certain officers of different departments. If the arrest or seizure is made pursuant to a warrant issued under Section 41(1), the person arrested or the article seized has to be forwarded to the Magistrate with despatch. If the arrest or seizure is made under Section 41(2), 42, 43 or 44 the person arrested or the article seized has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The decision in Raj Kumar Karwal (supra) was subsequently followed in Ram Singh v. Central Bureau of Narcotics, (2011) 11 SCC 347. 23. Chapter XII of the Code deals with the aspect of Information to police and their powers to investigate . The provisions of Chapter XII of the Code, in our view, would have no application to an investigation done under the provisions of the PMLA, since Chapter XII deals with the powers and duties of the police to register a cognizable case and carry out investigation in respect of the cognizable offence i.e. in respect of an offence of which the police is empowered, authorised and duty bound to act, without any requirement of obtaining any orders of the concerned Magistrate. The expression cognizable offence is defined in the Code in section 2(c) to mean an offence for which a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant; . (emphasis supplied) 24. Since the submission of the petitioner is that the offence under Section 3 of the Act is non-cognizable , we may take note of a part of the legislative history of section 45 of the Act. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t investigation (under Section 156), and arrest the accused without a warrant, and; even file a report u/s 173 of the Code before the concerned Magistrate. However, the Act provides that u/s 19 a Director or Deputy Director or Assistant Director or any other officer authorized may arrest an offender under the Act. It also provides in Section 44 that 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 authorized by the Central Government. The Act, as we have noticed above, vests extensive powers of investigation under the Act, upon the authorities under the Act, who are not police officers. Thus, there were serious inconsistencies resulting on account of the labeling of the offence u/s 3 of the PMLA as a cognizable offence . It is for this reason that section 45 of the PMLA was amended, inter alia, by deleting clause (a) of section 45(1), and introducing sub section (1A) in Section 45 which provided that Notwithstanding anything contained in the Code of Criminal Procedure, 1973, or any other provision of this Act, no police officer shall investigate into an offence under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the competent court). It is for this reason that in respect of certain offences, the police is empowered and duty bound to take cognizance on its own, (i.e. register the case; carry out investigation; if necessary arrest the accused, and; file a final report before the concerned Magistrate). 31. On the other hand, the PMLA deals with one and only one offence i.e. of money laundering as defined in section 3 of the Act. The information received by the authorities under the Act in respect of an offence u/s 3 of the Act is actionable by the authorities under the Act, i.e. it is for the authorities under the Act to take notice of the offence, and not the police. The exclusion of clause (a) from section 45(1) of the PMLA as it earlier stood, only has the effect of divesting the jurisdiction of the police to take cognizance of the offence of money laundering. However, the offence is still actionable by the authorities under the Act. 32. Whereas the PMLA is a substantive law, the Code is merely a procedural law. Insofar as the PMLA creates and sets down the statutory scheme, inter alia, for the opening/ registration of the case; its investigation; the officers by whom the case woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplaint only after completion of investigation by the authorized authority, which shall be the basis of taking cognizance. 14. As noticed above, the word investigation as defined in Section 2(na) has been inserted by virtue of Amendment Act 20 of 2005. According to the definition the word investigation includes all the proceedings under the Act conducted by the Director or by an authority authorized by the Central Government under the Act for the collection of evidence. 15. The provision contained in Sections 44 and 45 of the Act prohibits taking of cognizance except on a complaint made by the appropriate authority who can file a complaint only after completion of investigation. In my considered opinion, therefore, in view of nonobstante clause contained in various provisions of the Act, which has overriding effect, the provision contained in section 167(2) of the Cr.P.C. will not apply . (emphasis supplied) Thus, the provisions of Section 167(2) of the Code was held to be inapplicable to proceedings under the Act. 34. We may also take note of the judgment of a Division Bench of the Punjab Haryana High Court in Karam Singh Ors. v. Union of India, 2015 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved as follows: 39. The Special Court as notified under Section 43 is to be the Sessions Judge of various divisions and for separate revenue districts as per the notification issued by the Central Government after consultation with the Chief Justice of this Court. Thus, it is apparent that the offence under Section 3 as per the first schedule of Cr.P.C. would be a cognizable offence and a non-bailable offence and Special Court would only take cognizance of the offence upon the complaint made by the authorities under the Act in writing in view of the provisions of the Act. A reading of Section 46 would rather go on to show that it has been specifically provided that Cr.P.C. would apply to the proceedings before the Special Court for the purposes of bails or bonds. Thus, it would be apparent that it is at this stage the procedure prescribed under the Code would come into play for the limited purpose where a person has been taken into custody by the authorized officers under the Act and produced before the competent Court, who will, then proceed to decide the right of bail in accordance with the provisions of the Cr.P.C. The reference to the provisions of Section 155(2), Cr.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no provision to file a police report and a specific bar had been created by the Parliament. The relevant extract from the decision of the Supreme Court in Jeevan Kumar Raut (supra) reads as follows: 26. It is a well-settled principle of law that if a special statute lays down procedures, the ones laid down under the general statutes shall not be followed. In a situation of this nature, the respondent could carry out investigations in exercise of its authorization under Section 13(3)(iv) of TOHO. While doing so, it could exercise such powers which are otherwise vested in it. But, as it could not file a police report but a complaint petition only; sub-section (2) of Section 167 of the Code may not be applicable. 27. The provisions of the Code, thus, for all intent and purport, would apply only to an extent till conflict arises between the provisions of the Code and TOHO and as soon as the area of conflict reaches, TOHO shall prevail over the Code. Ordinarily, thus, although in terms of the Code, the respondent upon completion of investigation and upon obtaining remand of the accused from time to time, was required to file a police report, it was precluded from do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion being in conflict with Section 36A of the Act, the police report or a complaint can be filed before the Court of Session directly. When a complaint is filed, the Court of Session commences proceedings regulated by Chapter XV of the Code. Such provision inter alia contemplates that if a complaint is made in writing, the Magistrate is not required to examine the complainant and the witnesses, if a public servant acting or purporting to act in the discharge of his official duties files a complaint. The Code contemplates investigation by the police culminating with the filing of a police report and also proceedings to be initiated on the basis of a complaint by an empowered Officer in terms of Chapter XV of the Code. Therefore, when a police in terms of Code investigates into an offence including an offence under the Act, it files a report under Section 173 of the Code, whereas the investigation by an empowered officer under the Act leads to filing of a complaint in terms of Section 190 of the Code. 40. Thus, the argument that the statements of PW- 4 Constable Satpal Singh and PW-5 Shyam Kumar were neither recorded nor supplied to the appellants while filing complaint is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the issue required deeper consideration though various observations have been made in favour of the petitioners which are sought to be highlighted. Interim orders of this nature cannot be held to be a precedent or of any persuasive value since there has to be a final decision. Interim directions always go with the final decision and cannot be taken into consideration. For precedent to be binding, there has to be final decision and interim directions, issued in a pending case, would go with the final decision and cannot be taken into consideration. The said principle as to what is the ratio decidendi and the authoritative and binding element of the final judgment, laying down the precedent is to be taken into consideration and not the interim orders. Reference can be made to the observations made by the Apex Court in State of Assam v. Barak Upatyaka D.U. Karmachari Sanstha (2009) 5 SCC 694 : (AIR 2009 SC 2249, Para 10). Relevant observations of the judgment read as under: 21. A precedent is a judicial decision containing a principle, which forms an authoritative element termed as ratio decidendi. An interim order which does not finally and conclusively decide an issue ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ran Singh (supra) is not a final judgment. The same is only an interlocutory order. The relevant extract from the decision in Gurucharan Singh (supra) quoted above itself shows that the Division Bench recorded only a prima facie view while observing that it is mandatory for the respondents to follow the procedure prescribed under the Code of Criminal Procedure in the absence of any inconsistent provision under the PMLA concerning investigation, arrest and or other proceedings. Prima facie we are of the view that it was mandatory for the respondents to comply with the provision of Sections 155, 177(1) and 172 of the Code of Criminal Procedure in case the offence is non-cognizable. However, should this court reach a conclusion that the offence under PMLA is held to be cognizable, the respondents were bound to follow and comply with Sections 154, 157 of the Code of Criminal Procedure . The same does not, therefore, constitute a binding precedent for the reasons recorded in para 62 of Karam Singh (supra) which we have quoted herein above. The fact that the Special Leave Petition against the decision in Gurucharan Singh (supra) has been dismissed in limine, would not make a dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not violative of Article 21 of the Constitution of India (see Kartar Singh v. State of Punjab, (1994) 3 SCC 569). At the same time, a person may seek protective orders by invoking the writ jurisdiction of the concerned High Court. (see Hema Mishra v. State of Uttar Pradesh Ors., (2014) 4 SCC 453. 46. Section 19 of the PMLA reads as follows: 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 Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and casts scars forever, we feel differently. We believe that no arrest should be made only because the offence is non-bailable and cognizable and therefore, lawful for the police officers to do so. The existence of the power to arrest is one thing, the justification for the exercise of it is quite another. Apart from the power to arrest, the police officers must be able to justify the reasons thereof. No arrest can be made in a routine manner on a mere allegation of commission of an offence made against a person. It would be prudent and wise for a police officer that no arrest is made without a reasonable satisfaction reached after some investigation as to the genuineness of the allegation. Despite this legal position, the legislature did not find any improvement. Numbers of arrest have not decreased. ............... . 49. In view of the fact that the offence under Section 498A and Section 4 of the Dowry Prohibition Act provide for maximum punishment of a term which may extend to 7 years and fine, the Supreme Court focussed its attention on Section 41(1)(b) of the Code which reads as follows: 41. When police may arrest without warrant.- (1) Any police officer may with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrested, his presence in the court whenever required cannot be ensured. These are the conclusions, which one may reach based on facts. 7.2. The law mandates the police officer to state the facts and record the reasons in writing which led him to come to a conclusion covered by any of the provisions aforesaid, while making such arrest. The law further requires the police officers to record the reasons in writing for not making the arrest. 7.3. In pith and core, the police officer before arrest must put a question to himself, why arrest? Is it really required? What purpose it will serve? What object it will achieve? It is only after these questions are addressed and one or the other conditions as enumerated above is satisfied, the power of arrest needs to be exercised. In fine, before arrest first the police officers should have reason to believe on the basis of information and material that the accused has committed the offence. Apart from this, the police officer has to be satisfied further that the arrest is necessary for one or the more purposes envisaged by sub-clauses (a) to (e) of clause (1) of Section 41 CrPC. 51. The Supreme Court also took notice of Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reversed and the number of cases which come to the Court for grant of anticipatory bail will substantially reduce. We would like to emphasise that the practice of mechanically reproducing in the case diary all or most of the reasons contained in Section 41 CrPC for effecting arrest be discouraged and discontinued. 52. In paragraph 11, the Supreme Court issued several directions in respect of the manner in which police officers may proceed for arrest of an accused in case under Section 498A IPC. However, in para 12 of the decision, the Supreme Court clarified that the directions shall not only apply to cases under Section 498A IPC or Section 4 of the Dowry Prohibition Act, but also such cases where offence is punishable with imprisonment for a term which may be for less than 7 years or which may extend to seven years whether with or without fine. 53. The decision in Arnesh Kumar (supra) was rendered in the context of the provisions of the Code, where the arrest is made by police officers without a warrant. The dissimilarity between exercise of power of arrest by the police officer and the arrest made under the PMLA, is that the designated/authorized officers authorised to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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