TMI Blog2022 (7) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... n summoned during the course of an investigation - Sections 161 and 162 of the Act, concerning inadmissible evidence in the trial of an offence, unless it is used only for the purpose of contradiction as stipulated in Section 145 of the 1872 Act - constitutional validity of vires of Section 50 of the PMLA regarding whether a police officer is in a position to compel a person to render a confession giving incriminating statement against himself under threat of legal sanction and arrest? - procedure established by law has to be in the form of a statute or delegated legislation and pass the muster of the constitutional protections, violative of Article 21 of the Constitution of India or not - non-supplying of the ECIR to the accused is in gross violation of Article 21 of the Constitution or not - onerous bail conditions under Section 45 of the Act - burden of proof under Section 24 of the PMLA - constitutionality of Sections 17 and 18 concerning absence of safeguards in lieu of searches and seizures - section 5(1) concerning attachment independent of the existence of a predicate offence - reversal of presumption of innocence at the stage of bail as an accused by Section 45(1) of the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtual and is required to be given expansive meaning to include inquiry procedure followed by the Authorities of ED, the Adjudicating Authority, and the Special Court. (iii) The expression investigation in Clause (na) of Section 2(1) of the 2002 Act does not limit itself to the matter of investigation concerning the offence under the Act and is interchangeable with the function of inquiry to be undertaken by the Authorities under the Act. (iv) The Explanation inserted to Clause (u) of Section 2(1) of the 2002 Act does not travel beyond the main provision predicating tracking and reaching upto the property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. (v) (a) Section 3 of the 2002 Act has a wider reach and captures every process and activity, direct or indirect, in dealing with the proceeds of crime and is not limited to the happening of the final act of integration of tainted property in the formal economy. The Explanation inserted to Section 3 by way of amendment of 2019 does not expand the purport of Section 3 but is only clarificatory in nature. It clarifies the word and preceding the expression project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided in Section 17 and Rules framed thereunder. Moreover, the pre-condition in the proviso to Rule 3(2) of the 2005 Rules cannot be read into Section 17 after its amendment. The Central Government may take necessary corrective steps to obviate confusion caused in that regard. (ix) The challenge to deletion of proviso to sub-section (1) of Section 18 of the 2002 Act also stands rejected. There are similar safeguards provided in Section 18. We hold that the amended provision does not suffer from the vice of arbitrariness. (x) The challenge to the constitutional validity of Section 19 of the 2002 Act is also rejected. There are stringent safeguards provided in Section 19. The provision does not suffer from the vice of arbitrariness. (xi) Section 24 of the 2002 Act has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act and cannot be regarded as manifestly arbitrary or unconstitutional. (xii) (a) The proviso in Clause (a) of sub-section (1) of Section 44 of the 2002 Act is to be regarded as directory in nature and this provision is also read down to mean that the Special Court may exercise judicial discretion on case-to-case basis. (b) W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suffer from any vice of arbitrariness. (xvii) The inclusion or exclusion of any particular offence in the Schedule to the 2002 Act is a matter of legislative policy; and the nature or class of any predicate offence has no bearing on the validity of the Schedule or any prescription thereunder. (xviii) (a) In view of special mechanism envisaged by the 2002 Act, ECIR cannot be equated with an FIR under the 1973 Code. ECIR is an internal document of the ED and the fact that FIR in respect of scheduled offence has not been recorded does not come in the way of the Authorities referred to in Section 48 to commence inquiry/investigation for initiating civil action of provisional attachment of property being proceeds of crime. (b) Supply of a copy of ECIR in every case to the person concerned is not mandatory, it is enough if ED at the time of arrest, discloses the grounds of such arrest. (c) However, when the arrested person is produced before the Special Court, it is open to the Special Court to look into the relevant records presented by the authorised representative of ED for answering the issue of need for his/her continued detention in connection with the offence of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-7023 OF 2021, 8429 OF 2021, TRANSFER PETITION (CRIMINAL) NO. 150 OF 2016, 151-157 OF 2016, 435 OF 2021, WRIT PETITION (CRIMINAL) NO. 152 OF 2016, 202 OF 2017, 26 OF 2018, 33 OF 2018, 75 OF 2018, 117 OF 2018, 173 OF 2018, 175 OF 2018, 184 OF 2018, 226 OF 2018, 251 OF 2018, 333 OF 2018, 336 OF 2018, 9 OF 2019, 16 OF 2019, 49 OF 2019, 118 OF 2019, 119 OF 2019, 122 OF 2019, 127 OF 2019, 139 OF 2019, 147 OF 2019, 173 OF 2019, 205 OF 2019, 212 OF 2019, 217 OF 2019, 239 OF 2019, 244 OF 2019, 253 OF 2019, 261 OF 2019, 263 OF 2019, 266 OF 2019, 267 OF 2019, 272 OF 2019, 273 OF 2019, 283 OF 2019, 285 OF 2019, 286 OF 2019, 287 OF 2019, 288 OF 2019, 289 OF 2019, 298 OF 2019, 299 OF 2019, 300 OF 2019, 303 OF 2019, 305 OF 2019, 306 OF 2019, 308 OF 2019, 309 OF 2019, 313 OF 2019, 326 OF 2019, 346 OF 2019, 365 OF 2019, 367 OF 2019, 5 OF 2020, 9 OF 2020, 28 OF 2020, 35 OF 2020, 36 OF 2020, 39 OF 2020, 49 OF 2020, 52 OF 2020, 60 OF 2020, 61 OF 2020, 89 OF 2020, 90 OF 2020, 91 OF 2020, 93 OF 2020, 124 OF 2020, 137 OF 2020, 140 OF 2020, 142 OF 2020, 145 OF 2020, 169 OF 2020, 184 OF 2020, 221 OF 2020, 223 OF 2020, 228 OF 2020, 239 OF 2020, 240 OF 2020, 259 OF 2020, 267 OF 2020, 285 OF 2020, 286 OF 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Adv., Mr. Mahesh Agarwal, Adv., Mr. Arijit Singh Khurana, Adv., Mr. Arshdeep Singh Khurana, Adv., Mr. Prateek K. Chadha, Adv., Mr. Ayush S., Adv., Mr. Adit S. Pujari, Adv., Mr. Amit Bhandari, Adv., Mr. Akshat Gupta, Adv., Ms. Madhavi Agrawal, Adv., Mr. Vaibhav Niti, Adv., Ms. Ambika Mathur, Adv., Mr. Shreedhar Kale, Adv, Mr. Raghav Tankha, Adv, Mr. Harsh Mittal, Adv, Mrs. Shally Bhasin, AOR, Mr. Abhishek Manu Singhvi, Sr. Adv, Mr. Balaji Subramanian, Adv., Ms. Ishani Banerjee, Adv., Mr. SCV Vimal Pani, Adv., Ms. L Maheswari, Adv., Mr. Balaji Subramaniam, Adv., Mr. A. Lakshminarayanan, AOR, Mr. Ramesh, Adv., Mr. Sidharth Luthra,Sr. Adv., Mr. Tarun Dua, AOR, Mr. Anant Garg, Adv., Mr. Asif Ahmad, Adv., Mr. Adityaa Raju, Adv., Mr. Mukul Rohatgi, Sr. Adv., Mr. Sidharth Luthra, Sr. Adv., Mr. Suhaan Mukerji, Adv., Mr. Shri Singh, Adv., Mr. Aditya Dewan, Adv., Mr. Vishal Prasad, Adv., Ms. Chitralekha Das, Adv., Mr. Nikhil Parikshith, Adv., Mr. Asif Ahmad, Adv., Mr. Sanjivani Pattjoshi, Adv., Mr. Bharat Monga, Adv., Mr. Pankaj Singhal, Adv., Mr. Adityaa Raju, Adv., Mr. Dewang Singh Chauhan, Adv., Mr. Abhishek Manchanda, Adv., Mr. Kushagra Raghuvanshi, Adv., Mr. Chirag Madan, Adv., Ms. Shu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v., Mr. Kanu Agrawal, Adv., Mr. Arvind Kumar Sharma, AOR, Mr. Tushar Mehta, SG, Mr. Suryaprakash V. Raju, ASG, Mr. K.M. Nataraj, Adv., Ms. Zoheb Hussain, Adv., Mr. Kanu Agrawal, Adv., Ms. Sairica Raju, Adv., Mr. Deepanshu Dutta, Adv, Mr. Sughosh Subramanyajm, Adv., Ms. Shradha Deshmukh, Adv., Ms. Neela Kedar Gokhale, Adv., Mr. Ritwiz Rishabh, Adv., Mr. Sharath Nambiar, Adv., Mr. Arvind Kumar Sharma, AOR, Mr. Mukesh Kumar Maroria, AOR, Mr. Pranay Ranjan, Adv., Mr. Raj Bahadur Yadav, AOR, Mr. Tushar Mehta, Ld.SG, Mr. S.V. Raju, ASG, Mr. K.M. Nataraj, ASG, Mr. Anshuman Singh, Adv., Mr. Ankit Bhatia, Adv., Mr. Arpit Goel, Adv., Mr. G.S. Makker, AOR, Mr. M.K.Maroria, AOR, Ms. Sairica Raju, Adv., Ms. Annam Venkatesh, Adv., Mr. Kanu Agrawal, Adv., Mr. Zoheb Hussain,Adv., Mr. Rajat N. Adv., Mr. Harsh Paul Singh, Adv., Mr. Vivek Gurnani, Adv., Mr. Shoaib Alvi, Adv., Mr. Om Prakash Shukla, Adv., Mr. Sanjay Kumar Tyagi, Adv., Ms. Deepabali Dutta, Adv., Ms. Shradha Deshmukha, Adv., Mr. Anvit Bhatia, Adv., Mr. Arvind Kumar Sharma, AOR, Mr. Tushar Mehta, SG, Mr. S V Raju, ASG, Mr. Kanu Agarwal, Adv., Mr. Zoheb Hossain, Adv., Mr. Mukesh Kumar Maroria, AOR, Ms. Deepabali Dutta, Adv., Mr. S.V.Raju, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Adv., Mr. Shohit Chaudhry, AOR, Mr. Vikramjit Banerjee, ASG, Mr. Mukul Singh, Adv., Mr. D.L. Chidnanad, Adv., Mr. Amit Sharma, Adv., Ms. Rukhimini Bobde, Adv., Mr. A.K. Sharma, AOR, Mr. Pramod K. Dubey, Sr. Adv., Mr. Vivek Jain, AOR, Mr. Hemant Shah, Adv., Ms. Suchitra Kumbhat, Adv., Mr. Pramod Kumar Dubey, Sr. Adv., Mr. Hemant Shah, Adv., Mr. Prithveesh MK, Adv., Mr. Gurpreet S. Parwanda, Adv., Mr. Nishanth Patil, AOR, Ms. Malvika Kala, Adv., Mr. Adarsh Aggarwal, Adv., Mr. Ajay Aggarwal, Adv., Mr. Rajan Narain, AOR, Mr. Tushar Mehta, SG, Mr. Suryaprakash V.Raju, ASG, Ms. Sairica Raju, Adv., Mr. Zoheb Hussain, Adv., Mr. Kanu Agrawal, Adv., Mr. Sughosh Subramanyam, Adv., Mr. Raj Bahadur Yadav, Adv., Mr. Tushar Mehta, SG, Mr. Mayank Pandey, Adv., Mr. Kanu Agarwal, Adv., Mr. Mukesh Kumar Maroria, AOR, Mr. Tushar Mehta, SG, Mr. SV Raju,ASG, Mr. Aman Lekhi, ASG, Mr. Zoheb Hossain, Adv., Mr. Kanu Agarwal, Adv., Ms. Deepabali Datta, Adv., Mr. M.K. Maroria, AOR, Mr. Tushar Mehta, SG, Mr. SV Raju, ASG, Mr. Zoheb Hossain, Adv., Mr. Kanu Agrawal, Adv., Ms. Sairica S Raju, Adv., Mr. Sughosh Subramanyam, Adv., Mr. Raj Bahadur Yadav, AOR, Mr. Amit K Desai, Sr. Adv., Mr. S. HariHaran, Adv., Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh Hooda, AOR, Ms. Preeti Singh, AOR, Dr. G.K.Sarkar, Adv., Mrs. Malbika Sarkar, Adv., Mr. Avadh Bihari Kaushik, AOR, Mr. Devanshu Yadav, Adv., Dr. G.K. Sarkar, Adv., Mrs. Malbika Sarkar, Adv., Mr. Prashant Srivatav, Adv., Mr. Ayush Choudhary, Adv., Mr. Devanshu Yadav, Adv., Mr. Ayush Choudhary, Adv., Mr. Devanshu Yadav, Adv., Mr. Sameer Pandey, Adv., Mr. Gautam Awasthi, AOR, Mr. Gautam Awasthi, AOR, Mr. Ayush Choudhary, Adv., Mr. Devanshu Yadav, Adv., Mr. Sameer Pandey, Adv., Mr. Mukul Rohatgi, Sr.Adv., Mr. Omar Ahmed, Adv., Mr. Malak Manish Bhatt, AOR, Ms. Neeha Nagpal, Adv., Mr. Vishendra Tomar, Adv., Mr. Aditya Gupta, Adv., Mr. Jaspal Singh, Adv., Ms. Neeha Nagpal, Adv., Mr. Malak Manish Bhatt, AOR, Mr. Vijay Aggarwal, Adv., Mr. Mudit Jain, Adv., Mr. Yugant Sharma, Adv., Ms. Astha Sharma, AOR, Ms. Mantika Haryani, Adv., Mr. Ajit Sharma, AOR, Mr. Prithvees MK, Adv., Mr. Nishanth Patil, AOR, Ms. Shubhika Saluja, Adv., Ms. Malvika Kala, Adv., Mr. Kapil Sibal, Sr. Adv., Mr. Vivek Jain, AOR, Mr. Zulfiquar Memom, Adv., Mr. Mrinal Bharti, Adv., Mr. Parvez Memom, Adv., Mr. Chirag Naik, Adv., Ms. Vaijayanti Sharma, Adv., Mr. Nirvikar Singh, Adv., Mr. Manish Shekhari, Adv., Mr. Palas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dv., Mr. Vaibhav Suri, Adv., Mr. Prabhav Ralli, Adv., Ms. Urja Pandey, Adv., Mr. Amit Gupta, Adv., Mr. Akhilesh Dubey, Adv., Mr. Dharmesh Joshi, Adv., Mr. Uttam Dubey, Adv., Mr. Hari Sankar Mahaptra, Adv., Mr. Bhavini Sribastava, Adv., M/S. Mitter Mitter Co., AOR, Mr. Neeraj Kumar Sharma, AOR, Mr. Gursharan S. Virk, Adv., Mr. Nakul Mohta, Adv., Ms. Misha Rohatgi, AOR, Mr. Devansh Shrivastava, Adv., Mr. Johnson Subba, Adv., Mr. Bharat Moga, Adv., Mr. Deepak Prakash, AOR, Mr. Abhishek A. Rastogi, Adv., Mr. Pratushpava Saha, Adv., Mr. Mahir Chablani, Adv., Mr. Rohit Ghosh, Adv., Ms. Kanika Sharma, Adv., M/S. Khaitan Co., AOR, Mr. M. T. George, AOR, Ms. Susy, Adv., Mr. Johns George, Adv., Ms. Rashi Bansal, AOR, Mr. Shekhar G Devasa, Adv., Mr. Manish Tiwari, Adv., Mr. Shashi Bhushan Nagar, Adv., Mr. Prashanth R. Dixit, Adv., Ms. Thashmitha K.M. Adv., Mr. Ramesh Jadhav, Adv., Ms. Satvisa Pattanayak, Adv., M/S. Devasa Co., AOR, M/S. Ap J Chambers, AOR, Mr. Namit Saxena, AOR, Mr. Awnish Maithani, Adv., Ms. Arushi Dhawan, Adv., Mr. M.K. Subramanian, Adv., Mr. Vinodh Kanna B., AOR, Mr. Vinodh Kanna B., AOR, Mr. Ritesh Patil, Adv., Mr. Shamik Shirishbhai Sanjanwala, AOR, Ms. Diksha Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an, AOR, Mr. Swetab Kumar, Adv., Mr. Sukhada Kakade, Adv., Mr. Vishal Mahajan, AAG Mr. Anil Kumar, Adv., Mr.Suraj Kumar, Adv., Dr. Monika Gusain, AOR, Mr. Dinesh Kumar Sabharwal,Adv Mr. Sameer Bhatnagar,Adv Mr. Syed Mehdi Imam, AOR, Mr. V. Vasudevan, Adv., Mr. Aswathi M.K., AOR, Mr. Birj Kant Mishra, Adv., Mr. Hitesh Kumar Sharma, Adv., Mr. S.K. Rajora, Adv., Mr. Akhileshwar Jha, Adv., Ms. Maneesha Kongovi, Adv., Mr. R. Sudhinder, Adv., Ms. Prerana Amitabh, Adv., Mr. Shivabhushan Hatti, Adv., Mr. Shashank Dixit, Adv., Mr. R Gopalakrishan, AOR, Mr. V. Vasudev, Adv., Mr. Awasthi M.K., AOR, Mr. Malak Manish Bhatt, AOR, Mr. Gautam Khazanchi, Adv., Ms. Neeha Nagpal, Adv., Mr. Anshuman Sinha, Adv., Mr. Vijay K. Pande, Adv., Ms. Jaikriti S Jadeja, AOR, Ms. Pragya Sharma, Adv., Mr. Vinay Prakash, Adv., Mr. Amit, Adv., Mr. Maneesh Saxena, Adv., Mr. Vipin Kumar Saxena, Adv., Ms. Kajal Rani, Adv., Ms. Natasha Dalmia, AOR, Mr. Anand Varma, AOR, Mr. Parmatma Singh, AOR, Mr. Mayank Jain, Adv., Mr. Madhur Jain, Adv., Mr. A. Selvin Raja, AOR, Mr. Tanveer Ahmed Mir, Adv Mr. Arjun Singh Bhati, AOR, Mr. Dhruv Gupta, Adv., Mr. Vaibhav Suri, Adv., Mr. Prabhav Ralli, Adv., Ms. Urja Pandey, Adv., Mr. Abh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanu Agarwal, Adv., Mr. N. Hariharan, Sr. Adv., Mr. S. Hariharan, Adv., Mr. Ankur Chawla, Adv., Mr. Arshdeep Singh Khurana, Adv., Mr. Naveen Malhotra, Adv., Mr. S. Mahesh Sahasranaman, Adv., Mr. Gopalkrishna Shenoy, Adv., Ms. Jaikriti S. Jadeja, AOR, Ms. Prapti Allagh, Adv., Mr. V.K.Biju, AOR, Ms. Ria Sachthey, Adv., Mr. Chetanya Singh, Adv., Mr. Amlendu Kumar Akhilesh Kumar Jha, Adv., Mr. Abhay Pratap Singh, Adv., Mr. Shaji George, Adv., Ms. Vijay Laxmi, Adv., Mr. T. G. Narayanan Nair, AOR, Ms. Shweta Garg, AOR, Mr. G. Prakash, AOR, Mr. Tushar Mehta, SG Ms. Aishwarya Bhati, ASG Mr. Sanjay Jain, ASG Mr. Rajat Nair, Adv., Ms. Shradha Deshmukh , Adv., Mr. Vansaja Shukla, Adv., Mr. Arvind Kumar Sharma, AOR, Mr. D.Kumanan, AOR, Mr. Narender Kumar Verma, AOR, Mr. Pranav Sachdeva, AOR, Mr. K. Paari Vendhan, AOR, Ms. Uma Devi. M, AOR, JUDGMENT A.M. KHANWILKAR, J. Table of Contents Particulars Paragraph No(s). Preface 1(a)-(d) Submissions of the Private Parties Mr. Kapil Sibal, Senior Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Burden of proof 91-103 Special Courts 104-114 Bail 115-149 Section 50 of the 2002 Act 150-173 Section 63 of the 2002 Act 174 Schedule of the 2002 Act 175 175A ECIR vis- -vis FIR 176-179 ED Manual 180-181 Appellate Tribunal 182 Punishment under Section 4 of the 2002 Act 183-186 Conclusion 187(i)-(xx) Order 1-7 PREFACE 1. In the present batch of petition(s)/appeal(s)/case(s), we are called upon to deal with the pleas concerning validity and interpretation of certain provisions of the Prevention of Money-Laundering Act, 2002, For short, PMLA or the 2002 Act and the proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial leave petitions; and there are few transfer petitions filed under Article 139A(1) of the Constitution of India. (d) Instead of dealing with facts and issues in each case, we will be confining ourselves to examining the challenge to the relevant provisions of PMLA, being question of law raised by parties. SUBMISSIONS OF THE PRIVATE PARTIES 2. Mr. Kapil Sibal, learned senior counsel appearing for the private parties/petitioners in the concerned matter(s) submitted that the procedure followed by the ED in registering the Enforcement Case Information Report, For short, ECIR is opaque, arbitrary and violative of the constitutional rights of an accused. It was submitted that the procedure being followed under the PMLA is draconian as it violates the basic tenets of the criminal justice system and the rights enshrined in Part III of the Constitution of India, in particular Articles 14, 20 and 21 thereof. (i) A question was raised as to whether there can be a procedure in law, where penal proceedings can be started against an individual, without informing him of the charges? It was contended that as per present situation, the ED can arrest an individual on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such ECIR, the ED can summon accused persons and seek details of financial transactions. The accused is summoned under Section 50 of the PMLA to make such statements which are treated as admissible in evidence. Throughout the process, the accused might well be unaware of the allegations against him. It is clear that Cr.P.C. has separate provisions for summoning of the accused under Section 41A and for witnesses under Section 160. The same distinction is absent under the PMLA. Further, Chapter XII of the Cr.P.C. is not being followed by the ED and, as such, there are no governing principles of investigation, no legal criteria and guiding principles which are required to be followed. As such, the initiation of investigation by the ED, which can potentially curtail the liberty of the individual, would suffer from the vice of Article 14 of the Constitution of India 2 . (iv) Mr. Sibal, while referring to the definition of money-laundering under Section 3 of the PMLA, submitted that the ED must satisfy itself that the proceeds of crime have been projected as untainted property for the registration of an ECIR or the application of the PMLA. It has been vehemently argued that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand Shah, Supra at Footnote No.3 (Para 11). (vi) The safeguard provided by Section 173 of the Cr.P.C., it is argued, was present in the original enactment of 2002 (PMLA). The same has now supposedly been whittled down by various amendments over the years. It has been submitted that by way of amendments in 2009, proviso have been added to Sections 5 and 17, which have diluted certain safeguards. Further, it is submitted that the safeguard under Section 17(1) has been totally done away with in the amendment made in 2019. To further this argument, it has been suggested that the filing of chargesheet in respect of a predicate offence was impliedly there in Section 19 of the PMLA, since there is a requirement which cannot be fulfilled sans an investigation, to record reasons to believe that any person has been guilty of an offence punishable under this Act . In respect of Section 50, it is urged that though there is no threshold mentioned in the Act, yet the persons concerned should be summoned only after the registration of the ECIR. It is, thus, submitted that any attempt to prosecute under the PMLA without prima facie recordings would be inconsistent with the Act itself and vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r retention of the seized property or record under sub-section (3) and net income, if any, shall cease to have effect. However, vide amendment in 2013, the words trial for any scheduled offence were replaced with the words trial of an offence under this Act . It is urged that for the property to qualify as proceeds of crime, it must be connected in some way with the activity related to the scheduled offence. Meaning thereby that if there is no scheduled offence, there can be no property derived directly or indirectly; thus, an irrefutable conclusion that a scheduled offence is a pre-requisite for generation of proceeds of crime. (xi) It is further argued that an Explanation has been added to Section 44(1)(d) of the PMLA by way of Finance (No. 2) Act, 2019, which posits that a trial under the PMLA can proceed independent of the trial of scheduled offence. It is submitted that the Explanation is being given a mischievous interpretation when it ought to be read plainly and simply. It is stated that the Explanation relates only to the Special Court and not the trial of the scheduled offence. It is submitted that a Special Court can never convict a person under the PMLA wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one is invested with the same powers i.e., the powers for prevention and detection of crime, one will be a police officer. Then, the PMLA is distinguished from the 1962 Act, Sea Customs Act, 1878, For short, 1878 Act or the Sea Customs Act , Central Excise Act, 1944, For short, 1944 Act or the Central Excise Act and the CGST Act. The dissenting opinion of Subba Rao, J. in Barkat Ram, Supra at Footnote No.24 is also relied upon. Thereafter, it is stated that PMLA, being a purely penal statute, one needs to look at the Statement of Objects and Reasons of the 1999 Bill and the Financial Action Task Force, For short, FATF an inter-governmental body, which is the global money laundering and terrorist financing watchdog recommendations. (xiv) Reliance was also placed on Raja Ram Jaiswal vs. State of Bihar AIR 1964 SC 828. Further, it has been stated that even in Tofan Singh vs. State of Tamil Nadu 2020 SCC OnLine SC 882 (Para 88) (also at Footnote No.24), the case of Raja Ram Jaiswal, Supra at Footnote No.30 has been relied upon and it is concluded that when a person is vested with the powers of investigation, he is said to be a police officer, as he prevents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified under Section 48. An additional point has been raised that the difference between a complaint under the PMLA and a chargesheet under the Cr.P.C. is only a nomenclature norm and they are essentially the same thing. Thus, basing the determination of whether one is a police officer or not, on the nomenclature, is not proper. (xvi) In respect of interpretation and constitutionality of Section 50 of the PMLA, our attention is drawn to Section 50(2) which pertains to recording of statement of a person summoned during the course of an investigation. In that, Section 50(3) posits that such person needs to state the truth. Further, he has to sign such statement and suffer the consequences for incorrect version under Section 63(2)(b); and the threat of penalty under Section 63(2) or arrest under Section 19. (xvii) It is urged that in comparison to the constitutional law, the Cr.P.C. and the 1872 Act, the provisions under the PMLA are draconian and, thus, violative of Articles 20(3) and 21 of the Constitution. Our attention is drawn to Section 160 of the Cr.P.C. when person is summoned as a witness or under Section 41A as an accused or a suspect. In either case, the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note No.30 where a substantial link between Section 25 of the 1872 Act, police officer and confession has been settled. Therefore, the present situation where prosecution can be mounted under Section 63 for failing to give such confessions is said to be contrary to procedure established by law interlinked with the right to a fair trial under Article 21. Reliance has also been placed on Selvi Ors. vs. State of Karnataka, (2010) 7 SCC 263 (paras 87-89), the 180th Law Commission Report and Section 313 of the Cr.P.C. as being subsidiaries of right against self-incrimination and right to silence, not being read against him. (xx) Learned counsel then delineated on the preconditions for protection of Article 20(3). First, the person standing in the character of an accused, as laid down in State of Bombay vs. Kathi Kalu Oghad, AIR 1961 SC 1808, has been referred to. In this regard, it is submitted that the term may be given a wide connotation and an inclusion in the FIR, ECIR, chargesheet or complaint is not necessary and can be availed even by suspects at the time of interrogation. It is urged that both the position of law stands clarified in Nandini Satpathy, Supra at Footnote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se than Section 67 of the Narcotic Drugs and Psychotropic Substance Act, 1985, For short, NDPS Act . Further, the NDPS Act is the underlying reason for the PMLA and this Court in Tofan Singh, Supra at Footnote No.31 (also at Footnote No.24), in no uncertain terms, has given protection in respect of confessional statement even in the NDPS Act. The much harder and harsher punishment of death in the NDPS Act is also contrasted against the PMLA. It is also submitted that constitutional safeguards cannot be undermined by the usage of the term judicial proceedings . The term has been defined in Section 2(i) of the Cr.P.C. which includes any proceeding in the course of which evidence is or may be legally taken on oath , Assistant Collector of Central Excise, Guntur vs. Ramdev Tobacco Company, (1991) 2 SCC 119 (para 6). Section 50(1) has been distinguished for being in respect of only Section 13 of the PMLA. It is also submitted that the enforcement authority is not deemed to be a civil Court; it can be easily concluded that an investigation done by the enforcement authority is not a judicial proceeding and Section 50 of the PMLA falls foul of the constitutional safeguards. (xxiii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigated, protected under the garb of the Cr.P.C., the non-application of such safeguards under the PMLA is wholly unjustified., State of West Bengal Ors. vs. Committee for Protection of Democratic Rights, West Bengal Ors., (2010) 3 SCC 571 (Para 68) The procedure as envisaged under the PMLA, especially under Section 17, vests the executive with the supervisory power in an investigation. The same is anathema to the rule of law and the magisterial supervision of an investigation is an integral part and is a necessity for ensuring free and fair investigation., Sakiri Vasu vs. State of Uttar Pradesh Ors., (2008) 2 SCC 409 (paras 15-17) (i) It is further submitted that not supplying of the ECIR to the accused is in gross violation of Article 21 of the Constitution, the ECIR being equivalent to an FIR instituted by the ED. It contains the grounds of arrest, details of the offences; and as such, without the knowledge of the ingredients of such a document the ability of the accused to defend himself at the stage of bail cannot be fully realized. It may also hamper the ability to prepare for the trial at a later stage, Youth Bar Association of India (supra at Footnote No.11); A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f discretion by the ED. Magisterial oversight has been revoked; also, supervision envisaged under Section 17 is that of the executive which is against the rule of law and right of fair trial, Sakiri Vasu (supra at Footnote No.57) (paras 15-17). It is also stated that under the current scheme, an accused will be subject to two different procedures which is under the predicate offence and under the PMLA. To illustrate, Sections 410 and 411 of the IPC are scheduled offences overlapping with Sections 3 and 4 of the PMLA. However, the safeguards provided are nowhere uniform. The same is unreasonable and manifestly arbitrary, Subramanian Swamy vs. Director, Central Bureau of Investigation Anr., (2014) 8 SCC 682 (paras 49, 70). It is also to be noted that the PMLA does not expressly exclude the application of Chapter XII of the Cr.P.C. and as such, ambiguity must be interpreted in a way that protects fundamental rights of the people, Tofan Singh (supra at Footnote Nos. 24 and 31) (para 4.10). (iii) The next leg of the argument is to the effect that subsequent amendment cannot revive Section 45, which was struck down as unconstitutional by the decision in Nikesh Tarachand Shah, Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricted only to parts of these Acts and not to the whole of them. However, the same is not the case under the PMLA, as it is applicable to all predicate offences. Such an approach ignores crucial distinctions such as nature, gravity and punishment of different offences in the Schedule of PMLA and treats unequals as equals. This is in violation of Article 14 of the Constitution of India. Reliance is also placed on United States vs. Anthony Salerno, 107 S.Ct. 2095 (1987), where restrictive bail provisions are permitted in pre-trial detention because of the presence of detailed procedural safeguards. Still, it is argued, that such restrictive bail provisions cannot oust the ability of Constitutional Court to grant bail on the ground of violation of Part III of the Constitution, Union of India vs. K.A. Najeeb, (2021) 3 SCC 713 : 2021 SCC Online SC 50 (para 18). Further, it has been held that Magistrate must ensure that frivolous prosecution is weeded out. Provisions such as Sections 21, 22, 23 and 45 of the PMLA reverse the burden and curtail the jurisdiction of the trial Court arbitrarily in violation of the findings of this Court, Krishna Lal Chawla Ors. vs. State of Uttar Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and provides no guidance as to when a presumption is to be invoked. The learned counsel also points the discrepancy that the word authority appearing in Section 24, which also appears in Section 48, is distinctive in nature and that Section 24 absurdly allows an investigator to presume the commission of an offence. This is clearly arbitrary and de hors logic. In light of the same, the constitutional vires of the section are challenged or a reading down to fulfil the constitutional mandate is pressed for. (iii) The next point of attack for Dr. Singhvi, learned senior counsel is the constitutionality of Sections 17 and 18. The absence of safeguards in lieu of searches and seizures is canvassed. It has been pointed out that such searches or seizures can take place even without an FIR having been registered or a complaint being filed before a competent Court. Foremost, the legislative history of these two Sections is pointed out. It is shown that originally the search and seizure was to be conducted after the filing of a chargesheet or complaint in the predicate offence. Thereafter, the protection was diluted by the 2009 amendment, wherein it was provided that the search and sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to either the scheduled offence or the proceeds of crime. It is at the mere satisfaction of the officer. In this way, it is submitted, attachment of property of any person can be made, with no fetters. Our attention is also drawn to the use of word any for person and property and its distinction from the term proceeds of crime , having a direct nexus with the ambit of the main Section. It is argued that it is not to be mixed with any offence but only scheduled offences. The ED is alleged to employ this language in attaching property purchased much before the commission of scheduled offences, to the extent not having any nexus. It is submitted that there has to be a link between the second proviso to the proceeds of crime and scheduled offence being investigated under a specific ECIR before the ED.83, Dwarka Prasad vs. Dwarka Das Saraf, (1976) 1 SCC 128, Also see: Satnam Singh Ors. vs. Punjab Haryana High Court and Ors., (1997) 3 SCC 353 (vi) Submissions with respect to Section 8 of the PMLA maintain that Section 8(4) allows the ED to take possession of the attached property at the stage of confirmation of provisional attachment made by the Adjudicating Authority. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(1)(zb), the expression value is defined as fair market value on the date of acquisition and not fair market value on date of attachment. Arguably, property bought years ago is thereby undervalued by the ED. Attachment of immovable property and eviction in case of unregistered leases is also challenged. To challenge this disproportionate imposition and restrictions, reliance is placed on Shayara Bano, Supra at Footnote No.80 (paras 101-102) and Anuradha Bhasin vs. Union of India Ors. 2020 (3) SCC 637. (viii) It is then urged by the learned counsel that Section 45(1) of the PMLA, reverses the presumption of innocence at the stage of bail as an accused. According to him, the accused at this stage can never show that he is not guilty. It is also maintained that these are disproportionate and excessive conditions for a bail. Reference is also made to Nikesh Tarachand Shah, Supra at Footnote No.3 to the limited extent that the 2018 amendment has not removed invalidity, pointed out in the aforesaid judgment of this Court. It is also stated that regardless of the amendment, the twin condition is in violation of Article 21 of the Constitution by virtue of the nature of the offenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect link between the proceeds of crime and Section 3 offence was also highlighted. It was submitted that the Special Court cannot continue with the trial for Section 3 offence once acquittal in the predicate offence takes place. Section 44 unmistakably provides for the Special Court trial of money-laundering. It was pointed out that it is normal that if one is acquitted for the predicate offence, the money-laundering procedure could still go on. This is contrary to the definition under Section 3, which states that money-laundering is inextricably linked to the predicate offence. (i) It was also pointed out that the usual practice is of filing an ECIR on the same day or right after the FIR has been filed by replicating it almost verbatim. Canvassing for proper procedure and investigation before filing of the ECIR and initiation of the process under the PMLA, reference was also made to other Acts, such as Smugglers and Foreign Exchange Manipulators Act, 1976, For short, SAFEMA , FERA or Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, For short, COFEPOSA and the 1962 Act, being Acts which would not subsist alone or by themselves without the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by this Court are related to retrospectivity. Firstly - whether authorities can proceed against an accused when commission of the predicate offence predates the addition of the said offences to the Schedule of the PMLA? Secondly - whether the authorities can proceed against the properties obtained or projected prior to the commission of an offence under this Act? Thirdly - whether authorities can proceed when the predicate offence and the projecting predate the commencement of this Act? Fourthly - whether jurisdiction subsists under the Act when no cognizance has been taken, the accused has been discharged or acquitted or the offence compounded? Lastly, learned counsel also challenges the rigors of the twin conditions for being incongruent with general bail provisions under Sections 437 and 439 of the Cr.P.C. as being ultra vires. (i) Learned counsel refers to one of the cases in this batch, wherein the properties sought to be acquired by the ED were obtained by the petitioner prior to 2009, while the commission of offence was in 2013 and Section 13 of the PC Act was inserted into the PMLA Schedule for the first time in 2009. This, it is maintained cannot fit into the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such proceeds of crime only subsequent to the inclusion of the predicate offence to the Schedule of the PMLA. Another point that has been highlighted is that the projecting, if done prior to the date of inclusion of the offence to the Schedule, the same cannot be continuing and as such, is stated to be stillborn for the purposes of the PMLA. (iii) It is urged that for the purposes of bail, it is settled law that offences punishable for less than seven years allows a person to be set free on bail. As such, the liberty as enunciated by Article 21 of the Constitution cannot be defeated by such an Act. Thus, Section 45(2) of the PMLA is contrary to general principles of bail and the Constitution of India. It is also pointed out that Section 437 of the Cr.P.C. imposing similar conditions as Section 45(2) restricts it to offences punishable with either life imprisonment or death. Under no condition can it be said that the bail conditions under the PMLA, imposing maximum seven years, are reasonable. Without prejudice to the aforementioned argument, it was stated that Section 45(2) could only be applicable to bail applications before the Special Court and the special powers under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Section 3 of the PMLA have been given a very expansive meaning, whereby people who do not have knowledge or have not participated, being totally unrelated third parties, are also being roped in to the investigations. The culpability has to be maintained. Wrong interpretation is given to proceeds of crime to be any property even obtained or derived indirectly. Persons who have not committed the scheduled offence deriving certain indirect benefits, even without knowledge, based on Section 24 presumption are held to be guilty of laundering money. (ii) Further, the question of retrospectivity has also been addressed, whereby after the 2019 amendment, money-laundering is now said to be a continuing offence connected with the proceeds of crime. It is urged that the ED contends that prosecution or attachment can take place irrespective of whether the alleged offence was committed even prior to enactment in 2002, irrespective of the addition of the predicate offence in the PMLA Schedule. It is submitted that there are various amendments which are substantive in nature, being given retrospective effect, such as Sections 2(1)(u), 3, 8, 24, 44, etc. It has also been brought to our noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in violation of the due process. No safeguards provided under the Cr.P.C. and the 1872 Act are extended to person proceeded for PMLA offence. It is stated that the stage at which a person is guaranteed the constitutional right under Article 20(3), cannot be made malleable through legislation. It is stated that even though the PMLA is a complaint-based procedure, by way of Section 50, one cannot ignore the pre-complaint stage. As such, Section 50 must be rendered unconstitutional. Further, it is argued that the ED practice is a perverse incentive structure for constitutional infringement where an accused is trapped and sweeping interrogations are conducted aimed at justifying the summons issued. In respect of Section 44(1)(d), it is stated that the right to a fair trial is taken away and this provision irreversibly prejudices the accused in the trial adjudicating the predicate offence., Nahar Singh Yadav Anr. vs. Union of India Ors., (2011) 1 SCC 307 (ii) Further, the Explanation to Section 44(1)(d) requires the two trials to be conducted before the Special Court, but as separate trials, is said to render the requirement of a fair trial impossible. To bolster this groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s based on a statutory provision of the Cr.P.C., has been found by this Court to be necessary and to be adhered scrupulously by the CBI, Vineet Narain Ors. vs. Union of India Anr., (1998) 1 SCC 226; Also see: Shashikant vs. Central Bureau of Investigation Ors., (2007) 1 SCC 630; Central Bureau of Investigation vs.. Ashok Kumar Aggarwal, (2014) 14 SCC 295; and State of Jharkhand through SP, Central Bureau of Investigation vs. Lalu Prasad Yadav alias Lalu Prasad, (2017) 8 SCC 1. Similarly, other authorities, such as the Central Vigilance Commission, Income Tax authorities, authorities under the 1962 Act, police authorities, jail authorities, are all governed by manual published by them. Thus, it is only the ED which follows a distinct approach of non-disclosure. (iv) It has also been argued that the Schedule of the PMLA renders several bailable offences as non-bailable when this Court has repeatedly held that bail is the rule and jail is the exception, State of Rajasthan, Jaipur vs. Balchand alia Baliay, (1977) 4 SCC 308; Also see: Sanjay Chandra vs. Central Bureau of Investigation, (2012) 1 SCC 40; State of Kerela vs. Raneef, (2011) 1 SCC 784 (para 15).. Predicate offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 of the Constitution of India. He submitted that under the current scheme of the Act, a scheduled offence requires a prior FIR. A person so named in the FIR would stand in the character of an accused person, and as such, he cannot be compelled to incriminate himself or produce documents incriminating himself under Section 50(3) of the PMLA. The next leg of the argument is to the extent that Section 63(2)(c), which mandatorily penalises person for disobedience of Section 50, cannot be applicable to an accused person given the constitutional protections of Articles 20(3) and 21, whereby he has the right to exercise his fundamental right to silence. We are also shown the analogous provisions similar to Section 50(3) and 50(4) of the PMLA in other statutes, such as Section 171A of the 1878 Act, inserted by Section 12 of the Sea Customs (Amendment) Act, 1955; Section 108 of the 1962 Act; Section 14 of the Central Excises and Salt Act, 1944, For short, CESA 1944 Act and Section 40 of the FERA. Learned counsel further argued and distinguished custom officers and other above referred officers from the ED officers to the effect that they only recover duty and do not investigate crimes l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra at Footnote Nos.24 and 31). (ii) Further, it was urged that Section 2(1)(na) of the PMLA defines investigation . As such, proceedings under Section 50 is clearly a part of investigation for the collection of evidence. The summons under Section 50(2) is to give evidence or produce records during the course of investigation under the Act, thus, protected by Article 20(3). Section 50(4) of the PMLA also stipulates that they are judicial proceedings, therefore, a person accused will be protected under Article 20(3). Section 63(2)(a) and 63(2)(c) inflict grave prejudice upon the accused, as he is liable to be further prosecuted for the failure to give information and provide documents which will incriminate him. Our attention is also drawn to the usual practice wherein persons are labelled as non-cooperative during the proceedings which are judicial in nature and used as a pretext to arrest or extend remand under the PMLA. It is a direct affront to fundamental rights and a travesty of justice. 10. Mr. Siddharth Aggarwal, learned senior counsel, also appeared for the private parties. His main opposition is to the retrospective application of the PMLA. Certain questions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the new predicate offence. It only means that property which is not proceeds of crime , cannot by virtue of PMLA, retrospectively characterised as such in a true sense. Further, prior to the enactment of the PMLA, there was no similar offence dealing in proceeds of crime or economic advantages derived from criminal offences. He points out that there were various enactments which dealt with the illegal fruits of criminal activity. Thus, the PMLA cannot be added to the list of disabilities in law to illegal monies in a retrospective manner. He was critical about many amendments taken place over the years and especially the fact that the true import of Section 3 is being expanded by a mere addition of an Explanation in 2019. As such the purport of the main, a much narrow provision, cannot be changed, Bihta Co-operative Development and Cane Marketing Union Ltd. Anr. vs. Bank of Bihar Ors., AIR 1967 SC 389 (paras 5 7-8]; Dattatraya Govind Mahajan Ors. vs. State of Maharashtra Anr., (1977) 2 SCC 548 (para 9); S. Sundaram Pillai Ors. vs. V.R. Pattabiraman Ors., (1985) 1 SCC 591 (paras 27 45-53); Jagan M. Seshadri vs. State of T.N., (2002) 9 SCC 639; and Hardev Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Maya Rani Punj (Smt.) vs. Commissioner of Income Tax, Delhi, (1986) 1 SCC 445 (paras 15-20)]. In case of money-laundering, it is urged that there is a clear starting point and an end point to the same, where the generation of proceeds of crime starts and ends in the integration of proceeds of crime into the financial bloodstream as untainted money. Thus, though it may take place over time but it cannot be considered as a continuing offence. Further, for the purpose of substantive interpretation, no reference can be made to the Explanation added by the 2019 amendment, since it is a mere explanation which cannot widen the ambit of the main section itself, M/s. Ajanta Merchants Pvt. Ltd. (supra at Footnote No.103) (para 37). 11. Mr. Mahesh Jethmalani, learned senior counsel was next in line to advance submissions on behalf of the private parties. He submitted that Section 44(1)(a) of the PMLA is unconstitutional and violative of Articles 14 and 21 of the Constitution. He contends that there is no nexus of the said Section with the object of the PMLA. This section does not contemplate a joint trial of the offence under Section 3 and the scheduled offence. Further, he interprets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandate disclosure of any reason for filing the application. Further, such an application can be moved at any stage of the proceedings for the inquiry or trial of a scheduled offence. Such a provision cannot be read to allow committal at a stage when the trial is over and only the judgment remains to be delivered. This tantamounts to authorising exercise of administrative fiat in respect of subject matter, which is in fact a quasi-judicial act. Similarly, even the Magistrate is not obligated to state reasons while deciding the application and as such his order, if not reasoned, will be a nullity. The interpretation of the words commit and committed is said to be misconceived under Section 44(1)(c). It is urged that the use of the word committal is inappropriate and the real intention of the present Section is a mere transfer of the case to the PMLA Special Court. As such, it is submitted that the case be sent to the Special Court which has already taken cognizance of the complaint under the PMLA and not any other Special Court. Reliance has been placed on the decision of the Delhi High Court in Directorate of Enforcement vs. Surajpal Ors. 2018 SCC OnLine Del 10472 (Paras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase) saves the conditions from the vices on which it was struck down, the vice of Article 21 persists owing to the presumption of innocence having been turned on its head. It is also said that the current provision has no compelling State interest for tackling serious crime and we must be doubly sure to allow such attack on the fundamental right of personal liberty. (iii) As for Section 24 and the burden of proof which is reversed within this Act, it is stated that Section 24(a) applies only after charges have been framed by the Special Court. Section 24(b) refers to persons not charged with the offence of money-laundering under Section 3 and it is further contended that Section 24(a) and (b) have no application to proceedings for bail. Furthermore, it is stated that presumption of innocence is a golden thread running through all criminal proceedings. This can apply only in cases of extremely serious offences on the ground of compelling State interest. It is submitted that in such a case where the maximum sentence is of seven years, such a provision is ultra vires Article 21 of the Constitution. It is argued that in special statutes like UAPA, MCOCA and the PC Act, the reverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney-laundering, but laundering of such proceeds of crime, United States of America vs. Renee Armstrong Sanders, 929 F.2d 1466 (10th Cir. 1991); United States of America vs. Paul Johnson, 440 F.3d 1286, 1293 (11th Cir. 2006); United States of America v Roger Faulkenberry, 614 F.3d 573 (6th Cir. 2010); and Jennifer Wang, Yes, That is Money Laundering. Oh Wait, It's Not: The Impact of Cuellar on Concealment Money Laundering Case Law, 18 J Bus L 255 (2015). Further, it has been stated that this Court in a catena of decisions, held that newly added Explanations must be read so as to harmonise and clear of ambiguity in the main Section and cannot be construed to widen the ambit of the previous state of the Section, Nagar Palika Nigam vs. Krishi Upaj Mandi Samiti Ors., AIR 2009 SC 187 and Rohitash Kumar Ors. vs. Om Prakash Sharma Ors., AIR 2013 SC 30.. (ii) The next contention is regarding the definition of proceeds of crime and use of value thereof, defined under Section 2(1)(u) of the PMLA. It is argued that it can be categorised into three types namely: one - property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6428; and Seema Garg vs. Deputy Director, Directorate of Enforcement, 2020 SCC Online P H 738. Further, for the interpretation of value thereof , it is said that a broader interpretation would be contrary to Sections 8(5) and 8(6) of the PMLA. Hence, by way of illustration, where the original proceeds of crime are interchanged and mixed with legitimate money, it is argued that giving a broad interpretation to value thereof would be unreasonable, Seema Garg (supra at Footnote No.149 above). (iv) In respect of Section 8, it is argued that the true meaning of the words take possession of property under Section 8(4) should be constructive possession instead of physical possession since it is highly prejudicial for the accused during the pendency of the trial. Reliance is placed on a decision that has been stayed by the Division Bench of the Madras High Court which had originally held it to be symbolic possession instead of actual, A. Kamarunnisa Ghori vs. The Chairperson, Prevention of Money Laundering, Union of India, 2012 (4) CTC 608 : 2012 Writ LR 719. It is urged that Article 300A is not only a constitutional right but also a human right. Further, confiscation is only su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red, such amendments cannot go on to cure the defect of violation of Article 21. 14. Mr. Vikram Chaudhari, learned senior counsel also representing private parties, raised a challenge against the twin conditions of Section 45(1) which were held unconstitutional in Nikesh Tarachand Shah, Supra at Footnote No. 3. Relying on the dictum of this Court in State of Manipur Ors. vs. Surajkumar Okram Ors., 2022 SCC OnLine SC 130, he submitted that once held unconstitutional, a statute is obliterated entirely, as if it had never been passed, non-est for all purposes. He has also relied on his own interpretation of how Section 45(1) is to be read post Nikesh Tarachand Shah, Supra at Footnote No. 3. He has also pointed out that despite this decision an editorial error where bare acts, post the judgment, did not remove the offending (void) provision. It is, therefore, submitted that issue is not whether twin conditions under Section 45(1) would apply or not or of their constitutional validity, but would be as to their existence. He also referred to Clauses 204 and 205 of the Bill which amended Section 45 in 2018, Which states that (v) to amend section 45 of the Act relating to offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. And in respect of cognizable offence, the investigation cannot go on without recording information under Section 154 or 155 of the Cr.P.C., forwarding of report or FIR to competent Magistrate under Section 157 of Cr.P.C., maintaining a paginated case diary as under Section 172 of the Cr.P.C., as also, its production before the Magistrate, as provided by Section 167. (ii) A passing reference is also made to the Railway Property (Unlawful Possession) Act, 1966, For short, 1966 Act , whereby vide Section 6, the application of Section 155 Cr.P.C. was excluded, but in the case of PMLA, since there is no express departure from these provisions of the Cr.P.C., it being a non-cognizable offence, all these protections must come into play. In contradistinction, if it is found to be a cognizable offence, all protections including under Sections 154, 157, 167 and 172 Cr.P.C., will prevail. (iii) Reliance was also placed on Union of India vs. Thamisharasi Ors., (1995) 4 SCC 190 with respect to the NDPS Act and the application of the provisions of the Cr.P.C. For our perusal, a comparative chart had been presented to show the various provisions of the Cr.P.C., which are not dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accused to the proceeds of crime or criminal activity must cease the proceedings under the PMLA. Non-compliance of Section 44(1)(c) will vitiate the PMLA proceedings. Further, it is submitted that the scope of money-laundering is limited to projecting and claiming as untainted property, that too relatable to the scheduled offence, Attorney General for India Ors. vs. Amratlal Prajivandas Ors., (1994) 5 SCC 54. In light of the said argument, it is said that the projecting of such proceeds of crime as untainted can be termed as a standalone offence. In furtherance of same, certain facts of the case being Criminal Appeal Nos. 391-392/2018 titled Adjudicating Authority (PMLA) and Ors. vs. Ajay Kumar Gupta and Ors., were also referred to, where the FIR and scheduled offence are both prior to the coming into force of the PMLA and, yet, an ECIR was filed in 2015 after a delay of about 10 years. 15. Mr. Akshay Nagarajan was the last learned counsel to argue on behalf of the private parties. He contended that even though the definitions under Section 3 read with Section 2(1)(u), two conjunctive parts, are meant to cover scheduled offences, they are being used to bring within its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consensus towards the offence of money-laundering has been highlighted. It is submitted that prior to 1988, there was no concept of proceeds of crime and the same was recognized for the first time in Regina vs. Cuthbertson Ors., [1981] A.C. 470 by the House of Lords. England was one of the first countries to take legislative action against proceeds of crime on the recommendations of the Hodgson Committee by enacting Drug Trafficking Offences Act, 1986 (later replaced by the Drug Trafficking Act, 1994) which empowered the Courts to confiscate the proceeds of drug trafficking. (iv) Later, the Vienna Convention imposed obligation on each participating country to criminalize offences related to drug trafficking and money-laundering, Article 3(1)(a) (b) of the Vienna Convention, 1988, to which India is a party. (v) It is submitted that the provisions of the Palermo Convention were delineated to ensure that participating countries should have appropriate legislation to prevent money-laundering and further, the Convention also placed obligation on the participating nations to utilize relevant international anti-money laundering initiatives in establishing their domestic re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anti-laundering regime is ineffective in practice and to take steps against those countries. The steps which FATF may take against a non-compliant nation include conditioning, restricting, targeting or even prohibiting financial transactions with non-cooperative jurisdictions . (ix) It is submitted that the measures against money-laundering have evolved over the period of time. Further, FATF has taken preventive, regulatory and monitoring steps through keeping a watch on suspicious or doubtful transactions by amending its Forty Recommendations in 2003 and 2012. (x) It is further submitted that FATF assess the progress of its members in complying with the FATF recommendations through assessments performed annually by the individual members and through mutual evaluations which provides an in-depth description and analysis of a country s system for preventing criminal abuse of the financial system, as well as, by focused recommendations to the country to further strengthen its system. (xi) It is submitted that upon evaluation, a country will be placed immediately into enhanced follow-up if it does not comply with the FATF technical and big six recommendations or has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r by reference to offences that have a maximum term of imprisonment of one year or more (or, for states that have minimum thresholds for offences, those with imprisonment of a minimum of six months) and to take measures which are preventive in nature. (xv) To illustrate the global development of the approach against money-laundering, 1991 Money Laundering Directive ( First Directive ) adopted by the European Union is cited which imposed obligations on credit institutions and financial institutions in relation to customer identification and record-keeping, internal controls and training of staff and mandatory reporting of suspicious transactions. The Second Directive (2001) widened the number of institutions that fell within the scope of reporting obligations and also expanded the range of predicate offences for the purpose of money-laundering. EU Third Directive (2005) was directed to bring the EU legislation into line with the revisions to the FATF Recommendations and further expanded the range of institutions within its scope to include life insurance intermediaries and widened the definition of high value dealers to capture those who accept cash payments of 15,000 or more. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation for controlling or possessing the laundered money in a number of intermediate steps. (xx) It is stated that the reasons for fighting money-laundering, firstly, is to enable law enforcement authorities to confiscate the proceeds of predicate criminal activities so as to undermine organized crime by taking away the incentive for these criminal activities relatable to offences. Secondly, to apprehend high level criminals as they themselves stay aloof from criminal activities but do come into contact with the proceeds of these activities, thereby creating a paper trail . Thirdly, to prevent criminals from destabilizing the national economy because of its corruptive influence on financial markets and the reduction of the public s confidence in the international financial system and lastly to deter the money launderers from impacting the growth rate of the world economies. (xxi) It is stated that the principal sources of illegal proceeds are collar crimes (tax, fraud, corporate crimes, embezzlement and intellectual property crimes), drug related crimes and smuggling of goods, evasion of excise duties, corruption and bribery (and the embezzlement of public funds). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hes a specific separate procedure to the extent necessary and to be followed in proceedings under the Act. Laying down a brief summary of the legislative scheme of the Act, the respondent submits that there has been a conscious legislative departure from conventional penal law in India. Considering the peculiar nature of money-laundering which requires prevention, regulation and prosecution, a completely different scheme is framed by the Legislature. The new scheme introduced for dealing with the money-laundering is as a part of India s global responsibility in international law. While complying with the mandate of FATF, the Legislature has very consciously ensured that the Act becomes compliant with the Constitution of India. Referring to the rules formulated under the PMLA, it is also submitted that the scheme of the Act and rules framed thereunder prescribe an elaborate procedure to ensure complete confidentiality, and place sufficient inbuilt checks and balances to prevent potential abuse. (xxvii) The respondent then sheds some light on the offences being investigated by the Directorate of Enforcement. It is submitted that the number of cases taken up for investigation e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort, Mutual Evaluation Report . As per Recommendation No. 1 of the Mutual Evaluation Report, the concealment, possession, disposition and use of proceeds of crime were not criminalized by PMLA, and India was, thus, held to be not fully compliant. Thus, with a view to address the legal deficiency as pointed out by FATF and to make it globally compliant, the Prevention of Money-Laundering (Amendment) Act, 2012 amended Section 3 to include these activities. In support of his argument, learned Solicitor General draws our attention to the Statement of Object and Reasons of Prevention of Money Laundering (Amendment) Bill, 2011, For short, 2011 Bill , and the parliamentary debates surrounding the amendment. (xxix) Summing up the recommendations of the FATF, it is clarified by the learned Solicitor General that even in an act of mere concealment, mere possession or mere use of proceeds of crime or activity connected with the proceeds of crime, per se, is an offence. In other words, if a person conceals the proceeds of crime, keeps it in his possession or uses it, he is guilty of money-laundering irrespective of as to whether he is projecting it as untainted or not. This is for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of money-laundering as it exists, passes the muster, both under Articles 14 and 21 of the Constitution of India. (xxxiii) It is further submitted that the Explanation to Section 3 inserted vide Finance (No.2) Act, 2019, is merely clarificatory in nature and elucidates the legislative intent behind the provision. Reliance is placed on the background/justification of the amendments to PMLA as contained in the debate on the Finance Bill, 2019, For short, 2019 Bill . (xxxiv) Strong emphasis is laid on the use of the word any in the phrase any process or activity . A careful reading of Section 3 of the PMLA clearly provides that any process or activity which itself has a wider meaning also includes the process or activity of concealment, possession, acquisition, use and/ or projecting, claiming it as untainted property. Placing reliance on Shri Balaganesan Metals vs. M.N. Shanmugham Chetty Ors., (1987) 2 SCC 707, it is submitted that all or every type/ species of process or activity connected with proceeds of crime shall be included while interpreting the nature of process or activities connected with the proceeds of crime. (xxxv) It is further submitted that all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athi vs. J. Jayalalitha Ors. (2004) 2 SCC 9 and Subramanian Swamy vs. Union of India, Ministry of Law Ors. (2016) 7 SCC 221, to show that it is the sole prerogative of the Legislature to define a crime , and it is this definition that should be at the center of any challenge to a criminal provision. (xxxviii) It is urged that the projection of proceeds of crime cannot be held as a mandatory requirement under Section 3 of the Act; otherwise, it will become impossible to punish a person for the offence of money-laundering who knowingly assists or who is knowingly a party or who is actually involved in any process or activity connected with the proceeds of crime. It is, therefore, submitted that the correct interpretation of the word and should be or as it was always intended by the legislature. Further, it is stated that any interpretation contrary to this will render the provision meaningless. To bolster this argument, reliance is placed on the decision of this Court in Sanjay Dutt vs. State through C.B.I., Bombay (II) (1994) 5 SCC 410. In that case the Court held that the word and should be interpreted as or and the words arms and ammunition should not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the peculiar nature of the offence of money-laundering, the Legislature in its wisdom has provided a special procedure for investigation and trial of the offence under the Act. However, it is submitted that where the application of Cr.P.C is not expressly or by necessary implication excluded, the provisions of Cr.P.C will apply in light of Section 65 of PMLA as well. (xli) It is argued that the PMLA is a complete Code in itself, which creates a new offence and provides separate machinery to the extent necessary for dealing with it. Therefore, the provisions of PMLA would override the provisions of the Cr.P.C. in relation to such express dispensation in view of Section 71 of this (PMLA) Act. In support of this argument, reliance is placed on Rohtas vs. State of Haryana Anr. (1979) 4 SCC 229, Ajmer Singh Ors. vs. Union of India Ors. (1987) 3 SCC 340, Usmanbhai Dawoodbhai Memon Ors. vs. State of Gujarat (1988) 2 SCC 271, Central Bureau of Investigation vs. State of Rajasthan Ors. (1996) 9 SCC 735, State (Union of India) vs. Ram Saran (2003) 12 SCC 578, Mahmadhusen Abdulrahim Kalota Shaikh (2) vs. Union of India Ors. (2009) 2 SCC 1, Lalita Kumari vs. Govt. of Uttar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Devi Ors., 1963 (Supp.) 2 SCR 812, The South India Corporation (P) Ltd. vs. The Secretary, Board of Revenue, Trivandrum Anr., (1964) 4 SCR 280, Anandji Haridas and Co. (P) Ltd. vs. S.P. Kasture Ors. AIR 1968 SC 565, Maharashtra State Board of Secondary and Higher Secondary Education Anr. vs. Paritosh Bhupeshkumar Seth Ors. (1984) 4 SCC 27, Usmanbhai Dawoodbhai Memon, Supra at Footnote No.202 and Ethiopian Airlines vs. Ganesh Narain Saboo, (2011) 8 SCC 539. (xlv) It is then submitted that the controversies regarding offence under the Act being cognizable or non-cognizable is irrelevant because the definitions of the cognizable offence under Section 2(c) and non-cognizable offence under Section 2(l) of the Cr.P.C. are clearly inapplicable in the case of ED officers who are not police officers, Romesh Chandra Mehta (supra at Footnote No.119), as these two definitions only apply to police officer . Secondly, the application of these two definitions is restricted to the offences mentioned under the First Schedule of the Cr.P.C. and the offence under the Act (PMLA) is clearly not an offence specified therein. It is submitted that even under Part II of the First Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 739, Bombay High Court in Chhagan Chandrakant Bhujbal vs. Union of India Ors. 2016 SCC OnLine Bom 9938, Delhi High Court in Vakamulla Chandrashekhar vs. Enforcement Directorate Anr. 2017 SCC OnLine Del 12810, Virbhadra Singh Anr. vs. Enforcement Directorate Anr. 2017 SCC OnLine Del 8930, Moin Akhtar Qureshi vs. Union of India Ors. vide order dated 01.12.2017 in W.P. (Crl.) No.2465/2017 and this Court in Directorate of Enforcement vs. Vakamulla Chandrashekhar Order dated 04.01.2018 in SLP (Crl.) Diary No. 36918/2017. However, in W.P. (Crl.) No. 363 of 2018 and Crl. M.A. No. 2151 of 2018 i.e., Rajbhushan Omprakash Dixit vs. Union of India Anr., the Division Bench of the High Court took a different view and referred the matter to a larger bench. It is submitted that the said order is contrary to the decisions of this Court in Serious Fraud Investigation Office vs. Rahul Modi Anr. (2019) 5 SCC 266 and of the High Courts. (xlviii) Further, the binary created by the private parties of an offence being cognizable or non-cognizable is immaterial in the case of PMLA, which is a Code in itself and provides a special procedure for investigation. It is argued that the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 SCC 1 (also at Footnote No.127), State Bank of India vs. V. Ramakrishnan Anr. (2018) 17 SCC 394, and Union of India Ors. vs. Mudrika Singh 2021 SCC OnLine SC 1173. (liii) It is then submitted that there are adequate safeguards under Section 19 of the PMLA, which makes the provision Constitution-compliant. It is submitted that firstly, the power of arrest under Section 19 can be exercised only by a Director, Deputy Director, Assistant Director or any other police officer authorized in this behalf by the Central Government as opposed to Cr.P.C., where the power of arrest can be exercised by any police officer without a warrant even on the basis of reasonable suspicion, as per Section 41 of the Cr.P.C. The Director, who is the head of ED, is appointed by a neutral process mentioned under Section 25 of Central Vigilance Commission Act, 2003, For short, CVC Act . Therefore, only persons of particular rank who are appointed by statute have the power to arrest any person under Section 19 of the PMLA. Secondly, there must be material in possession with the Authority before the power of arrest can be exercised as opposed to Cr.P.C which gives the power of arrest to any police of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PMLA, there is already a higher threshold specified for arresting any person. Therefore, there is no possibility of arbitrary arrest under the PMLA. Whereas, since the decision to arrest is taken by high official after complying with threshold requirements in law, there will be presumption that he has acted bona fide. (lvi) It is stated that considering the nature and gravity of the offence, the serving of notice to a person as prescribed under Section 41A of Cr.P.C. would materially interfere with fair investigation being done by high official bestowed with such responsibility and make the investigation redundant. (lvii) Further, it is submitted that the contention of the private parties that the power under Section 19 of PMLA can only be invoked after a complaint is filed, is devoid of any merits. It is submitted that in a complaint case under the PMLA, a complaint is similar to the police report filed under Section 173 of the Cr.P.C, which makes the arrest a part of investigation which would always be prior to filing of the complaint under Section 44 or further complaint as contemplated in Explanation in Section 44. Further, the proviso to Section 44(1)(b) which provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Manzoor Ali Khan vs. Union of India Ors. (2015) 2 SCC 33 to urge that mere possibility of abuse by the authority, which is vested with the discretion to exercise the power, cannot be a ground to render the provision unconstitutional. (lxi) It is then submitted that the quantum of punishment cannot be the sole basis for determining the gravity of offence. The Legislature has several statutory mechanisms to bring about deterrence effect so as to prevent the commission of an offence and the quantum of punishment is only one such mechanism. It is further submitted that a stringent condition of bail is relatable to the object of creating a deterrent effect on persons who may commit the offence of money-laundering which is also manifest in the Preamble of the Act. To give effect to the international standards of preventing money-laundering prescribed by FATF and other international treaties, stringent bail conditions are necessary and the Legislature has provided enough safeguards under Section 19 so as to balance the rights of the accused and to protect the interest of the investigation as well. It is urged that the legislative policy of the country has consistently treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission, the learned Solicitor General has relied on State of Gujarat vs. Mohanlal Jitamalji Porwal Anr. (1987) 2 SCC 364, Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation (2013) 7 SCC 439, Nimmagadda Prasad vs. Central Bureau of Investigation (2013) 7 SCC 466, Gautam Kundu, Supra at Footnote No.207, and State of Bihar Anr. vs. Amit Kumar alias Bachcha Rai (2017) 13 SCC 751. Further, reliance has been placed on Mohd. Hanif Quareshi Ors. vs. State of Bihar Ors. AIR 1958 SC 731 to state that the seriousness of an offence and its impact on society is the subject matter of legislative wisdom and Legislature understands and correctly appreciates the needs of its own people. (lxiv) It is submitted that persons involved in the offence of money-laundering are influential, intelligent and resourceful and the crime is committed with full pre-meditation, which ensures that the offence is not detected and even if it is detected, investigation agency cannot trace the evidence. Further, it is stated that the offence is committed with the help of advanced technology so as to conceal the transaction, which makes the stringent bail conditions justified. Twin conditions of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court being satisfied that the accused is not guilty of an offence is not a novel legislative device. Section 437 of Cr.P.C. also imposes a similar condition, 437. When bail may be taken in case of non- bailable offence.- (1) When any person accused of, or suspected of, the commission of any non-bailable offence is arrested or detained without warrant by an officer in charge of a police station or appears or is brought before a Court other than the High Court or Court of Session, he may be released on bail, but- (i) such person shall not be so released if there appear reasonable grounds for believing that he has been guilty of an offence punishable with death or imprisonment for life; .. (emphasis supplied). Moreover, the twin conditions have been provided for by the Parliament in numerous other enactments as well. It is submitted that the Parliament is competent to classify offences and offenders in different categories. The Parliament has classified the offence of money-laundering as a separate class of offence from ordinary criminal laws. The said classification was necessary because the PMLA was framed in a specific international context, providi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Articles 38, 39(b), 39(c) and 51(b) 51(c) of the Constitution to state that the objective of the Act is to fulfil the mandate of the Constitution, enshrined in the Directive Principles of State Policy. Reliance has been further placed on Workmen of Meenakshi Mills Limited Ors. vs. Meenakshi Mills Ltd. Anr., (1992) 3 SCC 336, Papnasam Labour Union vs. Madura Coats Ltd. Anr., (1995) 1 SCC 501 and M.R.F. Ltd. vs. Inspector Kerala Govt. Ors., (1998) 8 SCC 227 to state that the Parliament can impose restriction which has the effect of promoting or effectuating a directive principle and such restriction can be safely presumed to be a reasonable restriction in public interest. Reliance has also been placed on State of Karnataka Anr. vs. Shri Ranganatha Reddy Anr., (1977) 4 SCC 471 and State of Tamil Nadu and Ors. vs. L. Abu Kavur Bai and Ors., (1984) 1 SCC 515, to state that the Article 39(b) of the Constitution shall be given a broad meaning. (lxx) It is submitted that the mandatory twin conditions of bail contained in Section 45 of the PMLA prescribe a reasonable restriction which has a reasonable nexus with the object sought to be achieved viz., creating deterr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of general public and not from the point of view of a person on whom the restrictions are imposed. Reliance has also been placed on Bell, Attorney General vs. Wolfish 441 US 520 (1979) to argue that detention of a person does not mean that he has been punished by the government. Decision in Schall vs. Martin, 467 US 253 (1984), to state that the legislative intent must be looked at in order to determine whether the restriction on liberty constitutes impermissible punishment or permissible regulation . (lxxiii) Learned Solicitor General has argued that the decision in Nikesh Tarachand Shah, Supra at Footnote No. 3 was based on the fact that the twin conditions of bail, as per the unamended provision, would apply to cases of bail in respect of both the predicate offence and also the offence of money-laundering. It is submitted that the reasons due to which the Court in Nikesh Tarachand Shah, Supra at Footnote No. 3 held the twin conditions to be unconstitutional, are firstly because the unamended provision had a classification which was based on sentencing of the scheduled offence, and secondly, because the applicability of the twin conditions was restricted only to a partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sundararamier Co. vs. The State of Andhra Pradesh Anr. (1958) SCR 1422 and F.N. Balsara, Supra at Footnote No.268 to state that a law which is not within the competence of the Legislature is a nullity. However, a law which is within the competence of the Legislature but repugnant to the constitutional prohibitions, is only unenforceable and if the prohibitions are removed, then the law will become effective without any need of re-enactment of the provision. It is submitted that the Court in Deep Chand, Supra at Footnote No.210 (also at Footnote No.69) was concerned with the doctrine of eclipse and the observation of the Court that such eclipse cannot operate retrospectively and cannot save the validity of the law, was said in a different context. Further reference has been laid on Jagannath, etc. etc. vs. Authorised Officer, Land Reforms Ors. etc. (1971) 2 SCC 893, to submit that the Court in this case negated a similar argument made on the basis of Deep Chand, Supra at Footnote No.210 (also at Footnote No.69). It is submitted that the contentions of the private parties based on the decision in State of Manipur, Supra at Footnote No.159 are totally misconceived, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t even the Constitutional Courts should be loath to ignore the express mandate of the statute which imposes stringent conditions of bail on a person accused of an offence under the PMLA. (lxxix) Further it is argued that the reliance of the private parties on the decision in Hema Mishra vs. State of Uttar Pradesh Ors., (2014) 4 SCC 453 is completely misplaced, as the Court in that case was dealing with the situation wherein the provision concerning anticipatory bail had been deleted by a local State enactment, and even in that case, the Court held that the power under Article 226 of the Constitution to grant anticipatory bail ought to be exercised in extremely rare circumstances. Therefore, the said judgment has no applicability in the present case. (lxxx) It is submitted that the argument of the private parties which was based on the Section 44(2) of the PMLA, that the twin conditions in Section 45 are applicable only to the Special Court and not to the High Court, is totally erroneous. Clarification under Section 44 was required, as similar provision in special enactments have been interpreted to oust the maintainability of bail application directly to the High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed for the purpose of Article 20(3) of the Constitution. Further reliance has been made on Kathi Kalu Oghad, Supra at Footnote No.44, wherein an eleven-Judge Bench of this Court held that the person who made the statement must stand in the character of accused at the time when the statement was made in order to attract Article 20(3). The decision of five-Judge Bench of this Court in Raja Narayanlal Bansilal vs. Maneck Phiroz Mistry Anr. AIR 1961 SC 29 has also been relied upon. It is urged that the examination of a person cannot be regarded as proceeding started against him, as it is only after gathering information against a person through examination, it may be concluded that there is a commission of an offence or not. Accusation of an offence is, therefore, a condition precedent for the application of Article 20(3) of the Constitution, K. Joseph Augusthi vs. M.A. Narayanan, AIR 1964 SC 1552. Reliance has also been placed on Romesh Chandra Mehta, Supra at Footnote No.119 to state that lodging of an FIR or a complaint is the essential requirement of formal accusation, as a person stands in the character of an accused only when a FIR is lodged against him in respect of an offenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chandra Mehta, Supra at Footnote No.119 cannot be ignored because of observations made in Nandini Satpathy, Supra at Footnote No.35. Therefore, it is submitted that when statements under Section 50(2) of the PMLA are made by a person, then at that stage such person does not stand in the character of an accused, as there is no formal accusation against him by way of a complaint or an FIR and thus, there is no violation of Article 20(3) of the Constitution. (iii) With regard to the issue of compulsion , it is submitted that this issue will arise only when the person concerned is held to be accused of an offence. Reliance has been further placed on M.P. Sharma, Supra at Footnote No.324 (also at Footnote No.47) and Nandini Satpathy, Supra at Footnote No.35 to state that compelled testimony can be procured not merely by physical threats or violence but by psychic torture, atmospheric pressure, environmental coercion, tiring interrogative prolixity, overbearing and intimidatory methods and the like, not legal penalty . Therefore, it is submitted that compulsion is a question of fact, to be decided at the stage of trial and cannot be generalized and decided in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olate Article 20(3) of the Constitution. Reliance has been placed on the decision of the Delhi High Court in Virbhadra Singh, Supra at Footnote No.227 to state that mere registration of an ECIR would not render any person an accused of the offence of money-laundering. Reliance has also been placed on Vakamulla Chandrashekhar, Supra at Footnote No.226, wherein it is stated that a Division Bench of the Delhi High Court held that the person against whom summons has been issued under Section 50 of the PMLA cannot be construed as person accused of an offence, unless a complaint is filed before the Special Court. (vii) Replying to the submissions of Mr. Aabad Ponda, learned senior counsel, it is submitted by the learned Additional Solicitor General that in Ramanlal Bhogilal Shah, Supra at Footnote No.122, there was already an FIR registered against the accused under the FERA Act, therefore, he stood in the character of accused person. Whereas, in the case of PMLA, the FIR is registered for the predicate offence and not for the offence of money-laundering. Therefore, the ratio of Ramanlal Bhogilal Shah, Supra at Footnote No.122 cannot be applied in the present case as the two offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to file a chargesheet and consequently, they cannot be regarded as police officer. After investigation, the ED officers can only file a complaint before the Special Court under Section 44(1)(b) of the PMLA. Further, it is stated that as per the definition of complaint under Section 2(d) of the Cr.P.C., a police report cannot be regarded as a complaint , as they are both mutually exclusive terms. It is further submitted that a police officer cannot submit a complaint and an ED officer cannot file a chargesheet. Otherwise, Section 155(4) and Section 155(2) would be rendered otiose, as in a case falling under Section 155(4) of the Cr.P.C., if the police officer after investigation forms an opinion that only non-cognizable case is made out, then in such a situation he is required to file a police report in view of provision of Section 155(4), but due to the operation of Section 2(d), the same will be treated as a complaint and the police officer would be treated as a complainant. Also, in a case where Magistrate orders the police officer to investigate a non-cognizable offence under Section 155(2) of the Cr.P.C., then in view of operation of Section 155(3) of the Cr.P.C., the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be termed as a police officer as his primary function is to detect and prevent smuggling of goods so as to protect the state exchequer. Therefore, it is submitted that the dominant purpose is to be seen. In case of the PMLA, the dominant purpose is prevention of money-laundering, attachment and confiscation of property involved in money-laundering, whereas all other matters with which the ED officers are involved, are only incidental matters. Therefore, as submitted, the ED officers cannot be termed as police officers. The Preamble of the Act and Statement of Objects and Reasons of the Act have been relied upon to state that the officers of the ED are primarily concerned with the prevention of money-laundering and for confiscation of property derived from or involved in money-laundering. (xii) Reliance has been placed on Pareena Swarup vs. Union of India (2008) 14 SCC 107 to state that the object of the PMLA is to bring the proceeds of crime back into the economy. Reliance has also been placed on the decision of the Delhi High Court in Vakamulla Chandrashekhar, Supra at Footnote No.226 to state that the offence of money-laundering has both, civil and criminal consequences a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Act cannot have any application under the statements made under Section 161 of the Cr.P.C. To buttress the submission, reliance was placed on the decisions of this Court in Baleshwar Rai Ors. vs. The State of Bihar (1963) 2 SCR 433 and Dipakbhai Jagdishchandra Patel vs. State of Gujarat Anr. (2019) 16 SCC 547. Even by applying Section 65 of the PMLA, it is stated that the bar of Section 162 of the Cr.P.C. cannot be applied to statements made under Section 50(2) of the PMLA because of the inconsistencies shown above. Further, if the Legislature had intended to apply Section 162 of the Cr.P.C., then it would have done so in the Act itself, as it has been done under the Bihar and Orissa Excise Act, 1915, For short, 1915 Act . (xv) It is submitted that the ratio of Tofan Singh, Supra at Footnote No.31 (also at Footnote No.24), where it was held that the statement recorded under Section 67 of the NDPS Act cannot be used as a confessional statement for the trial of an offence under the NDPS Act, will not apply to Section 50(2) of the PMLA. It is also submitted that the provisions of the PMLA are materially different from that of the NDPS Act. In the case of NDPS Act, a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MLA, the main purpose is prevention of money-laundering and confiscation of property derived from or involved in money-laundering. (xx) Further, the PMLA does not contain any provision which invest the power of an officer in-charge of a police station, including the power to file a chargesheet, in the investigating officer as contained in the NDPS Act. Moreover, in case of the NDPS Act, the investigating authority is required to file a chargesheet. However, in case of the PMLA, cognizance is taken on a complaint. (xxi) Lastly, it is contended that Section 50 of the PMLA is almost identical to Section 108 of the 1962 Act. Therefore, the statements made under Section 50 are evidence as opposed to Section 67 of the NDPS Act. Hence, Section 50(2) of the PMLA cannot be read down as done in Tofan Singh, Supra at Footnote No.31 (also at Footnote No.24), in case of Section 67 of the NDPS Act. (xxii) The respondent has demonstrated the legislative history of Section 24 of the PMLA and cited Recommendation 3 of the FATF (2003)/ Recommendation 4 of FATF (2012) to state that the FATF had stipulated that the burden of proving the lawful origin of the property shall be on the accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 139 thereof, to urge that the presumptions are rule of evidence and do not conflict with the presumption of innocence. The prosecution is obliged to prove the case against the accused beyond reasonable doubt. However, such obligation may be discharged with the help of presumptions of law or fact unless the accused rebut the presumption by showing the reasonable possibility of non-existence of the presumed fact. It is stated that there is a need to balance the rights of the accused with the interest of the society. Reliance is placed on Krishna Janardhan Bhat vs. Dattatraya G. Hegde (2008) 4 SCC 54 to urge that the nature of offence, seriousness and gravity thereof may be taken into consideration in interdicting the presumption of innocence. Reliance has also been placed on Sucha Singh vs. State of Punjab (2001) 4 SCC 375 to state that departure from traditional rule relating to the burden of proof is imperative; otherwise, the offenders in serious offences would be the major beneficiaries and the society would be the casualty. It is submitted that the PMLA is an Act which tackles a social evil and does require departure from normal criminal jurisprudence. Reliance ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portunity to displace the presumption by leading evidence. It is submitted that Section 24 of the PMLA also provides for rebuttable presumption and, therefore, the accused has the opportunity to lead evidence so as to displace the presumption against him. Thus, it cannot be said that Section 24 is unreasonable, arbitrary or unconstitutional. (xxvi) With regard to Section 24(a) of the PMLA, it is submitted that two conditions are required to be satisfied for the presumption under Section 24(a) to apply. Firstly, person should be charged with the offence of money-laundering and secondly, there should be proceeds of crime . It is only when both the conditions are satisfied, it can be said that the presumption will operate against the accused. (xxvii) Reliance has been placed on Union of India vs. Prafulla Kumar Samal Anr. (1979) 3 SCC 4 to state that for framing of charges, a prima facie case against the accused has to be made out by the prosecution, Dilawar Balu Kurane vs. State of Maharashtra, (2002) 2 SCC 135, Yogesh alias Sachin Jagdish Joshi vs. State of Maharashtra, (2008) 10 SCC 394, P. Vijayan vs. State of Kerala Anr., (2010) 2 SCC 398, Sajjan Kumar vs. Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the contentions of the private parties that the Court in Noor Aga, Supra at Footnote No.384 (also at Footnote No.55) and Tofan Singh, Supra at Footnote No.31 (also at Footnote No.24) has read into Section 54 of the NDPS Act the requirement of proving foundational fact of possession, is wholly incorrect and misplaced, as it would be clear from the bare language of Section 54 itself that the possession is the foundational fact which has to be established and only then the presumption under Section 54 of the NDPS Act will apply. (xxx) With regard to Section 24(b) of the PMLA, it is submitted that it applies to a person who is not charged with the offence of money-laundering and uses the word may instead of shall . It is submitted that presumptions falling under the category of may presume does not make it obligatory on the Court to regard such fact as proved and it is the discretion of the Court to either regard such fact as proved or may call proof of it. Whereas, presumptions falling under the category of shall presume are mandatory in nature, also known as legal presumptions, and the Court has to regard such fact as proved unless and until it is disproved, State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20(1) is only the conviction or sentence and not trial thereof. It has been further emphasized that the expression law in force used in Article 20(1), refers to the law in fact in existence and in operation at the time of the commission of the offence, as distinct from the law deemed to have become operative by virtue of the power of Legislature to pass retrospective law. (xxxiv) In light of the said principles, it is submitted that an offence might be either a single act i.e., an offence which is terminated by a single act, or a continuing offence i.e., an act which does not terminate by a single act, but rather continues to subsist over a period of time. It is submitted that the offence of money-laundering, as described under Section 3 of the PMLA, in a given case would be a continuing offence, and, thus, cannot be labelled as having retrospective operation. It is submitted that the objective of the PMLA is not to punish the accused for the scheduled offence, but rather for the independent offence of money-laundering committed under Section 3 of the Act. The argument proceeds that an Act cannot be said to be retrospective just because a part of the requisites for it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he commencement of the period of limitation. Thus, the offences involving possession are continuing in nature, and the period of limitation for such offences would start from the date of cessation of the possession. (xxxvi) It is then submitted that the concept of possession is central to the offence of money-laundering. Inasmuch as, all the six activities recognized under Section 3 of the Act involve an element of possession of proceeds of crime. He further goes on to state that such possession need not necessarily be actual physical possession, but also may be legal or constructive possession. To this effect, reliance is placed on Gunwantlal vs. The State of Madhya Pradesh (1972) 2 SCC 194, wherein the concept of constructive possession was recognized by this Court. Strong emphasis has been laid on Section 2(1)(fa) 7 of the Act, which defines the term beneficial owner , to urge that the concept of constructive possession is recognized under the Act as well. It is submitted that possession of proceeds of crime being key to the offence of money, all activities having an element of possession after 01.07.2005 shall fall within the ambit of the Act irrespective of the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scation, formulation of reasons to conduct search or seizure under Section 17, or personal search under Section 18, etc. This further implies that unlike the procedure under the Cr.P.C., where the registration of an FIR is a condition precedent to initiation of investigation, State of West Bengal Ors. vs. Swapan Kumar Guha Ors., (1982) 1 SCC 561 and Shashikant (supra at Footnote No.114)., in such cases, the investigation can commence even prior to the receipt of information pertaining to commission of money-laundering. In this regard, the learned Additional Solicitor General draws our attention to Section 17(1)(iv) and Section 5(1) of the PMLA which empower the Director to collect evidence by way of search and seizure, and attachment of property respectively. It is submitted that this power to investigate, conferred upon the Director by these provisions, is based on a reason to believe that a person may be in possession of property related to crime, Section 17(1)(iv) of the PMLA or proceeds of crime, Section 5(1)(a) of the PMLA, and can be exercised at a stage preceding the receipt of information regarding commission of a cognizable offence. (xxxviii) It is then submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of Deputy Director, who are high ranking officials, can authorise a search and that too only on the basis of a reason to believe of the existence of conditions laid down therein. It is submitted that the vesting of the power to authorise a search and seizure under Section 17 with the highest responsible authority prevents misuse of the provision. Reliance is placed on Pooran Mal vs. The Director of Inspection (Investigation), New Delhi Ors. (1974) 1 SCC 345, to that effect. This is yet bolstered by the mandate of having to record the reasons to believe in writing. It is further pointed out that in terms of Section 17(2), the officer conducting the search shall forward a copy of the reasons recorded and material in his possession to the Adjudicating Authority in a sealed envelope immediately after the search and seizure. It is submitted that this safeguard ensures that the reasons so recorded upon a search and seizure and the material in the possession of the concerned officer is not tampered with. It is also submitted that in terms of Section 17(4), the Authority seizing the records or property shall, within a period of thirty days from the date of such seizure, file an applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xliii) Lack of safeguards in the Cr.P.C. are also highlighted. With respect to seizures, it is submitted that the same is governed by Section 102 of the Cr.P.C., and empowers a police officer to seize any property upon a mere suspicion. This is in stark contrast to Section 17(1) of the PMLA which permits seizure only when there is a reason to believe, and such reason is recorded in writing. With respect to search, it is submitted that Section 165 of the Cr.P.C. practically permits any officer above the rank of Constable to exercise such power, as opposed to Section 17 of the PMLA, which confers such power only upon the Director or any other officer not below the rank of Deputy Director. (xliv) In an attempt to establish that the power of search and seizure is not arbitrary, our attention has been drawn to the decisions of this Court in Pooran Mal, Supra at Footnote No.416; Income-Tax Officer, Special Investigation Circle-B, Meerut vs. Messrs Seth Brothers Ors. etc., (1969) 2 SCC 324 and Dr. Partap Singh Anr. vs. Director of Enforcement, Foreign Exchange Regulation Act Ors. (1985) 3 SCC 72 The learned Additional Solicitor General further defends the power of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forementioned rules. Placing reliance on Union of India Anr. vs. Purushottam (2015) 3 SCC 779, it is submitted that rules must be interpreted in a manner which would be in harmony with the parent statute, and, therefore, even though the rules are unamended, the proviso to Rule 3 cannot be read into the Act and is ultra vires the Act. (xlvii) The respondent has highlighted the legislative history of Sections 5 and 8 of the PMLA. It is submitted that sub-section (1) of Section 5 has been amended four times in the years 2009, 2013, 2015 and 2018 respectively. It is stated that Section 5(1) was amended vide Prevention of Money-Laundering (Amendment) Act, 2009 and second proviso was inserted for the first time which made the provision for immediate attachment of the property involved in money-laundering. (xlviii) It was observed in the Mutual Evaluation Report of the FATF and the Asia Pacific Group that the confiscation of criminal proceeds depends on conviction of the accused under the scheduled offence, which gives rise to an apprehension of confiscation proceedings becoming infructuous if the accused dies during the pendency of criminal proceedings. This technical irreg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second proviso to Section 5 of the PMLA is that the Authority concerned must have some material in its possession showing that such property is involved in money-laundering, which clearly establishes the link of second proviso with the scheduled offence. Relying on sub-section (5) of Section 8, it is averred that the properties which can be confiscated are properties involved in money-laundering and also the properties used for the commission of the offence of money-laundering. It is submitted that the ambit of sub-section (1) of Section 5 is very wide, which not only covers persons who are involved in the commission of scheduled offence, but also any person in possession of the proceeds of crime, who need not be the person accused of PMLA offence or who is being tried for the scheduled offence. It is further submitted that it would not be correct to say that any property of any person can be attached by invoking the second proviso to Section 5, as the proviso only deals with the property which is involved in money-laundering. Further, it is stated that the person whose property is sought to be attached may not be charged under the scheduled offence. Therefore, it is urged tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeds of crime are situated outside India. It is stated that it is manifest from the definition of proceeds of crime under Section 2(1)(u) of the PMLA that the proceeds of crime would not only cover the concerned property, but also the value of such property. It is further submitted that the attachment of property under second proviso is in consonance with the object of the PMLA. Reliance has been placed on Attorney General for India Ors. vs. Amratlal Prajivandas Ors. (1994) 5 SCC 54 (also at Footnote No.175), wherein the Court upheld the constitutionality of definition of illegally acquired property and application of SAFEMA to the relatives and associates of detenues. Further, Order 38 Rule 5 of the Code of Civil Procedure, 1908, For short, CPC or 1908 Code has also been relied upon to state that the attachment of property can also be done before judgment, so as to secure the subject matter of the suit during the pendency of the suit Raman Tech. Process Engg. Co. Anr. vs. Solanki Traders, (2008) 2 SCC 302. It is submitted that the object of Section 5(1) is similar to that of Order 38 Rule 5 which is to secure the properties from getting disposed of before the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, it is submitted that the ED cannot attach any property on its whims and fancies. Further, PMLA ensures ample judicial scrutiny of the order of attachment. (lvii) It is submitted that even a third party has the right to challenge the provisional attachment order under Section 8(2) of the PMLA and if the Adjudicating Authority is satisfied that the property is not involved in money-laundering and the claim of the third party is legitimate one, then it may release such property from attachment. Reliance has been placed on Radha Mohan Lakhotia, Indian National and Citizen vs. Deputy Director, PMLA, Directorate of Enforcement, Ministry of Finance, Department of Revenue, 2010 SCC OnLine Bom 1116 to state that the Bombay High Court has even before the amendment of Section 5(1), held that a provisional attachment order can even be passed against the person who is not named as an accused in the commission of scheduled offence. Further it is stated that the High Courts in the following cases, while relying on Radha Mohan Lakhotia, Supra at Footnote No.431, have upheld the validity of Section 5(1) of the PMLA: B. Rama Raju vs. Union of India Ors. 2011 SCC OnLine AP 152, Aliv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating Authority. Therefore, it is submitted that the power conferred by Section 8(4) of the PMLA to dispossess a person in possession of proceeds of crime or the property involved in money-laundering even before the conviction is perfectly valid, reasonable and justified. (lxiii) To counter the argument of the private parties that the attachment of the property will lapse if no proceedings is initiated under the Act by way of filing a complaint before the Special Court before the expiry of three hundred and sixty-five days of the attachment, it is submitted that the period of attachment under Section 8(3) of the PMLA will be three hundred and sixty-five days or during the pendency of any proceedings which includes any proceeding including of bail, quashing etc. (lxiv) It is submitted that the expression pendency of proceedings relating to an offence under the PMLA before a Court is broad enough to mean any pending proceedings relating to an offence under the Act, Kamlapati Trivedi vs. State of West Bengal, (1980) 2 SCC 91. Therefore, it is stated that even if for some reason a complaint has not been filed after three hundred and sixty-five days from the date of at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eat posed by the process and activities connected with the proceeds of crime and integrating it with formal financial systems of the countries. The issues were debated threadbare in the United Nation Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, Basle Statement of Principles enunciated in 1989, the FATF established at the summit of seven major industrial nations held in Paris from 14th to 16th July, 1989, the Political Declaration and Noble Programme of Action adopted by United Nations General Assembly vide its Resolution No.S-17/2 of 23.2.1990, the United Nations in the Special Session on countering World Drug Problem Together concluded on the 8th to the 10th June, 1998, urging the State parties to enact a comprehensive legislation. This is evident from the introduction and Statement of Objects and Reasons accompanying the Bill which became the 2002 Act. The same reads thus: INTRODUCTION Money-laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. To obviate such threats international community has taken some initiatives. It has been felt that to prevent money-lau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g used for laundering of drug related money and enactment of legislation to prevent such laundering. (e) the United Nations in the Special Session on countering World Drug Problem Together concluded on the 8th to the 10th June, 1998 has made another declaration regarding the need to combat money-laundering. India is a signatory to this declaration. 2. In view of an urgent need for the enactment or a comprehensive legislation inter alia for preventing money-laundering and connected activities confiscation of proceeds of crime, setting up of agencies and mechanisms for coordinating measures for combating money-laundering, etc., the Prevention of Money-Laundering Bill, 1998 was introduced in the Lok Sabha on the 4th August, 1998. The Bill was referred to the Standing Committee on Finance, which presented its report on the 4th March, 1999 to the Lok Sabha. The recommendations of the Standing Committee accepted by the Central Government are that (a) the expressions banking company and person may be defined; (b) in Part I of the Schedule under Indian Penal Code the word offence under section 477A relating to falsification of accounts should be omitted; (c) knowingly be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing into force of the 2002 Act, various other legislations were already in vogue to deal with attachment and confiscation/forfeiture of the proceeds of crime linked to concerned offences and yet another added recently in 2016, such as: a) The Forfeiture Act, 1857 [Repealed in 1922]; b) The Criminal Law Amendment Ordinance, 1944; c) The Unlawful Activities (Prevention) Act, 1967 [Chapter V (inserted in 2013)]; d) The Wild Life (Protection) Act, 1972 [Chapter VIA inserted in 2003]; e) The Code of Criminal Procedure, 1973 [Chapter XXXIV Disposal of Property]; f) The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976; g) The Narcotic Drugs and Psychotropic Substances Act, 1985 [Chapter VA inserted in 1989]; h) The Prevention of Corruption Act, 1988 [Section 5(6)]; i) The Maharashtra Control of Organised Crime Act, 1999 [Section 20] [While this is a State law, it has been adopted by several States, or has served as a model law for other States]; and j) The Anti-Hijacking Act, 2016 [Section 19]. As aforesaid, notwithstanding the existing dispensation to deal with proceeds of crime, the Parliament enacted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering (the Forms and the Manner of Forwarding a Copy of Order of Arrest of a Person along with the Material to the Adjudicating Authority and its Period of Retention) Rules, 2005; f) The Prevention of Money-laundering (the Manner of Forwarding a Copy of the Order of Retention of Seized Property along with the Material to the Adjudicating Authority and the period of its Retention) Rules, 2005; g) The Prevention of Money-laundering (Manner of Receiving the Records Authenticated Outside India) Rules, 2005; h) The Prevention of Money-laundering (Appeal) Rules, 2005; i) The Prevention of Money-laundering (Appointment and Conditions of Service of Chairperson and Members of Adjudicating Authorities) Rules, 2007; j) The Adjudicating Authority (Procedure) Regulations, 2013; k) The Prevention of Money-laundering (Issuance of Provisional Attachment Order) Rules, 2013; l) The Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013; m) The Prevention of Money-laundering (Restoration of Property) Rules, 2016 as amended by (Amendment) Rules, 2019. We may further note that the 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volved in large number of cases to be dealt with by the authorities and the Adjudicating Authority under the Act and the concerned Courts on daily basis, including the Constitutional Courts, it has become necessary to answer the other grounds of challenge in the meantime. On that understanding, we proceeded with the hearing of the batch of cases before us to deal with the other challenges regarding the concerned provision(s) being otherwise unconstitutional and ultra vires. 22. We do not deem it necessary to deal with the factual matrix involved in the concerned case. For, after answering the issues regarding the validity as dealt with herein, including interpretation of the concerned provision(s), the petitioners can be relegated to pursue their other remedies (such as for bail, quashing, discharge, etc.), before the appropriate forum. PREAMBLE OF THE 2002 ACT 23. The Preamble of the 2002 Act reads thus: An Act 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. WHEREAS the Political Declaration and Global Programme of Action, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from time to time) 2. Definitions.-(1) In this Act, unless the context otherwise requires,- (a) Adjudicating Authority means an Adjudicating Authority appointed under sub-section (1) of section 6; (b) Appellate Tribunal means the Appellate Tribunal , Subs. by Act 28 of 2016, sec. 232(a), for established under (w.e.f. 1-6-2016) [referred to in] section 25; (c) Assistant Director means an Assistant Director appointed under sub-section (1) of section 49; (d) attachment means prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter III; *** *** *** (j) Deputy Director means a Deputy Director appointed under sub-section (1) of section 49; (k) Director or Additional Director or Joint Director means a Director or Additional Director or Joint Director, as the case may be, appointed under sub-section (1) of section 49; *** *** *** Ins. by Act 20 of 2005, sec. 2 (w.e.f. 1-7-2005) ,[(na) investigation includes 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]; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer of right, title, possession or lien; (zb) value means the fair market value of any property on the date of its acquisition by any person, or if such date cannot be determined, the date on which such property is possessed by such person 26. We would now elaborate upon the meaning of investigation in Clause (na) of Section 2(1). It includes all proceedings under the Act conducted by the Director or an authority authorised by the Central Government under this Act for collection of evidence. The expression all the proceedings under this Act unquestionably refers to the action of attachment, adjudication and confiscation, as well as actions undertaken by the designated authorities mentioned in Chapter VIII of the Act, under Chapter V of the Act, and for facilitating the adjudication by the Adjudicating Authority referred to in Chapter III to adjudicate the matters in issue, including until the filing of the complaint by the authority authorised in that behalf before the Special Courts constituted under Chapter VII of the Act. The expression proceedings , therefore, need not be given a narrow meaning only to limit it to proceedings before the Court or before the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted during the inquiry by the authorities is utilised to bolster the allegation in the complaint to be filed against the person from whom the property has been recovered, being the proceeds of crime. Further, the expression investigation used in the 2002 Act is interchangeable with the function of inquiry to be undertaken by the Authorities under the Act, including collection of evidence for being presented to the Adjudicating Authority for its consideration for confirmation of provisional attachment order. We need to keep in mind that the expanse of the provisions of the 2002 Act is of prevention of money-laundering, attachment of proceeds of crime, adjudication and confiscation thereof, including vesting of it in the Central Government and also setting up of agency and mechanism for coordinating measures for combating money-laundering. 29. Coming to the next relevant definition is expression money-laundering , it has the meaning assigned to it in Section 3 of the Act. We would dilate on this aspect while dealing with the purport of Section 3 of the Act a little later. 30. The other relevant definition is proceeds of crime in Section 2(1)(u) of the 2002 Act. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be regarded as proceeds of crime. There may be cases where the property involved in the commission of scheduled offence attached by the investigating agency dealing with that offence, cannot be wholly or partly regarded as proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act - so long as the whole or some portion of the property has been derived or obtained by any person as a result of criminal activity relating to the stated scheduled offence. To be proceeds of crime, therefore, the property must be derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence. To put it differently, the vehicle used in commission of scheduled offence may be attached as property in the concerned case (crime), it may still not be proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act. Similarly, possession of unaccounted property acquired by legal means may be actionable for tax violation and yet, will not be regarded as proceeds of crime unless the concerned tax legislation prescribes such violation as an offence and such offence is included in the Schedule of the 2002 Act. For being regarded as proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d objects for enactment of 2002 Act. 33. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression derived or obtained is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l offences under its domestic law, when committed intentionally: a)(i) to (v) . b) i) The conversion or transfer of property, knowing that such property is derived from any offence or offences established in accordance with subparagraph a) of this paragraph, or from an act of participation in such offence or offences, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an offence or offences to evade the legal consequences of his actions; ii) The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from an offence or offences established in accordance with subparagraph a) of this paragraph or from an act of participation in such an offence or offences; c) Subject to its constitutional principles and the basic concepts of its legal system: i) The acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from an offence or offences established in accordance with subparagraph a) of this paragraph o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is involved in the commission of the predicate offence to evade the legal consequences of his or her action; (ii) The concealment or disguise of the true nature, source, location, disposition, movement or ownership of or rights with respect to property, knowing that such property is the proceeds of crime; (b) Subject to the basic concepts of its legal system: (i) The acquisition, possession or use of property, knowing, at the time of receipt, that such property is the proceeds of crime; (ii) Participation in, association with or conspiracy to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the offences established in accordance with this article. 2. For purposes of implementing or applying paragraph 1 of this article: (a) Each State Party shall seek to apply paragraph 1 of this article to the widest range of predicate offences; (b) Each State Party shall include as predicate offences all serious crime as defined in article 2 of this Convention and the offences established in accordance with articles 5, 8 and 23 of this Convention. In the case of States Parties whose legislation sets out a list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e its inception been aimed towards reducing cross border and intra State money-laundering activities. In this endeavour, it has made many concerted efforts to study, understand, develop and mutually evaluate the state of the compliance in countries towards reducing money-laundering. Today, as we will see, many of the amendments in the 2002 Act are in response to the recommendations of the FATF. Thereafter, forty recommendations dated 20.6.2003, were made by the FATF which had led to much deliberations go on to show that all endeavours were to be Vienna and Palermo Conventions compliant. During the evolution of the jurisprudence on money-laundering, it was found that India was in fact lacking in some aspects of curbing money-laundering. Hence, the recommendations were made to India time and again. It is pertinent also to reproduce the Mutual Evaluation of the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime of India as adopted on 24.06.2010 in its recommendations, as it has been shown that it is based on these observations that the amendment have been made, herein it has been observed thus: Recommendation 1 . Consistency with the Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ML activity by simply incorporating the relevant Convention language in the domestic law. With the section 3 of the PMLA money laundering provision, a newly defined ML offence was introduced differing from the comprehensive qualification of section 8A of the NDPS Act that was not repealed, resulting in the coexistence of two divergent drug related ML offences. 166. The new definition of the ML offence in section 3 of the PMLA tries to capture all requisite mental and physical elements of the Convention s ML provision in one overarching sentence. The mens rea element is the knowledge standard as minimally required by the Conventions. Section 3 of the PMLA does not require a specific intention or purpose, and as such its threshold is lower than that of Art. 6.1(a)(i) of the TOC Convention. The provision however falls short on the following actus reus aspects: a. The physical element in all cases includes the substantive condition of projecting (the proceeds of crime) as untainted property , so although the broad formulation of any process or activity covers any conduct involving criminal proceeds, such conduct is only criminalised as money laundering when the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the test of the courts to develop case law and receive direction on this fundamental legal issue. The level of the maximum fine imposable on legal persons should be raised or left at the discretion of the court to ensure a more dissuasive effect. The practice of making a conviction of legal persons contingent on the concurrent prosecution/conviction of a (responsible) natural person should be abandoned. (emphasis supplied) Thus, it is clear that certain recommendations were made by the FATF concerning the definition of money-laundering. It is also clear from public records that India has time and again, since the inception of the Act, made active efforts to follow and evolve its own laws in line with the mandates and recommendations of the FATF. Furthermore, it is noteworthy that even in other jurisdictions; the above-mentioned definition has gained a more holistic approach which is not per se the same as the colloquial term, money launder or simply turning black money into white. In the UK and Spain, possession of criminal proceeds is covered under money-laundering, similarly by way of interpretation, the same is the case in Ger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Bill. (emphasis supplied) This speech, thus, set the tone for the years to come in our fight against money-laundering. This law was enacted in 2002 yet brought into force in 2005. Later, a speech was made by the then Finance Minister, who had introduced the Prevention of Money Laundering (Amendment) Bill, 2012 in the Rajya Sabha on 17.12.2012 SHRI P. CHIDAMBARAM: Mr. Deputy Chairman, Sir, I am grateful to the hon. Members, especially ten hon. Members who have spoken on this Bill and supported the Bill. Naturally, some questions will arise; they have arisen. It is my duty to clarify those matters. Sir, firstly, we must remember that money-laundering is a very technically-defined offence. It is not the way we understand money-laundering in a colloquial sense. It is a technically-defined offence. It postulates that there must be a predicate offence and it is dealing with the proceeds of a crime. That is the offence of money-laundering. It is more than simply converting black-money into white or white money into black. That is an offence under the Income Tax Act. There must be a crime as defined in the Schedule. As a result of that crime, there must be certain pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person shall be held to be guilty of offence of money-laundering if he is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in any one or more of the process of activity included in section 3 of the Act of 2002. It is also observed that the original intention of the legislature is wrongly construed to interpret as if the offence of money laundering is a one time instantaneous offence and finishes with its concealment or possession or acquisition or use of projecting it as untainted property or claiming it as untainted property. The intention of the legislature had always been that a person will be held to be guilty of offence of money-laundering and will be punished as long as person is enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property or in any manner whatsoever. Accordingly, an Explanation is proposed to be inserted in section 3 of the Act of 2002 to clarify the above legislative intent. (emphasis supplied) Thereafter, the following statement was made on two different occasions, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Section 3, See debate of 25 July, 2002- RAJYA SABHA; available at: https://rsdebate.nic.in/bitstream/123456789/100942/1/PD_196_25072002_9_p237_p288_21.pdf, yet we chose to implement the said definition in a particular way. Later it was realised by the Government and the Parliament that with the passage of time and the development of anti-money laundering jurisprudence world over, certain changes were to be made in the definition of money-laundering. We do not find it prudent or necessary to run into arguments of application of international law, as it is clear that the intentions of the successive Governments have been the same since day one of signing the international Conventions. It is only in light of this perception and understanding of the legislation that we have been implementing the recommendations of the FATF. However, we note that there has been a constant flow of thought from the FATF recommendations, directly into our polity, which has pushed the money-laundering legislation forward. Thus, there can be no doubt as to the bona fides of the Legislature in implementing an understating of Section 3 that will help not only stop but prevent money-laundering by nipping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds of crime and projecting was substituted by expression proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming . We are not so much concerned with this change introduced vide Act 2 of 2013. In other words, the provision as it stood prior to amendment vide Finance (No.2) Act, 2019 remained as it is. Upon breaking-up of this provision, it would clearly indicate that - it is an offence of money-laundering, in the event of direct or indirect attempt to indulge or knowingly assist or being knowingly party or being actually involved in any process or activity connected with the proceeds of crime. The latter part of the provision is only an elaboration of the different process or activity connected with the proceeds of crime, such as its concealment, possession, acquisition, use, or projecting it as untainted property or claiming it to be as untainted property. This position stands clarified by way of Explanation inserted in 2019. If the argument of the petitioners is to be accepted, that projecting or claiming the property as untainted property is the quintessential ingredient of the offence of money-laundering, that would whit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these offences have cross-border implications. All in all, the list of predicate offences continues to include 156 offences under 28 different statutes but without any monetary threshold. As result, the major technical deficiency identified in relation to R.1 is fully addressed. ML provision does not cover physical concealment of criminal proceeds. Amendments to the PMLA were enacted by Parliament on 17 December 2012 and came into force on 15 February 2013. ML provision does not cover the sole knowing acquisition, possession and use of criminal proceeds The amended section 3 of the PMLA now reads. Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of the offence of money laundering. While the current formulation specifically refers to concealment, posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the world community which had been created. In Apparel Export Promotion Council vs. A.K. Chopra (1999) 1 SCC 759, the Court observed that domestic Courts are under an obligation to give due regard to the international conventions and norms for construing the domestic laws, more so, when there is no inconsistency between them and there is a void in domestic law. This view has been restated in Githa Hariharan, Supra at Footnote No.199, as also in People s Union for Civil Liberties, Supra at Footnote No.198, and National Legal Services Authority vs. Union of India Ors., (2014) 5 SCC 438 (also at Footnote No.197). 39. In the Core Recommendations of the FATF referred to above, the same clearly mention that the word and in Section 3 of the 2002 Act would not be fully in line with the Vienna and Palermo Conventions. This doubt has been ably responded and elucidated by India to the international body by referring to the jurisprudence as evolved in India to interpret the word and as or in the context of the legislative intent - to reckon any (every) process or activity connected with the proceeds of crime constituting offence of money-laundering. To buttress the stand taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o constitute an offence of money-laundering on its own. The act of projecting or claiming proceeds of crime to be untainted property presupposes that the person is in possession of or is using the same (proceeds of crime), also an independent activity constituting offence of money-laundering. In other words, it is not open to read the different activities conjunctively because of the word and . If that interpretation is accepted, the effectiveness of Section 3 of the 2002 Act can be easily frustrated by the simple device of one person possessing proceeds of crime and his accomplice would indulge in projecting or claiming it to be untainted property so that neither is covered under Section 3 of the 2002 Act. 42. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form - be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yering: which is disguising the trail to foil pursuit. (c) Integration: which is making the money available to the criminal from what seem to be legitimate sources. 45. It is common experience world over that money-laundering can be a threat to the good functioning of a financial system. However, it is also the most suitable mode for the criminals to deal in such money. It is the means of livelihood of drug dealers, terrorist, white collar criminals and so on. Tainted money breeds discontent in any society and in turn leads to more crime and civil unrest. Thus, the onus on the Government and the people to identify and seize such money is heavy. If there are any proactive steps towards such a cause, we cannot but facilitate the good steps. However, passions aside we must first balance the law to be able to save the basic tenets of the fundamental rights and laws of this country. After all, condemning an innocent man is a bigger misfortune than letting a criminal go. 46. On a bare reading of Section 3, we find no difficulty in encapsulating the true ambit, given the various arguments advanced. Thus, in the conspectus of things it must follow that the interpretation put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution of the judges in Heydon's case, (1584) 3 Co. Rep. 7a, and it is the safest guide today. Good practical advice on the subject was given about the same time by Plowden in his second volume Eyston v. Studd, (1574) 2 Plowden, 465. Put into homely metaphor it is this: A judge should ask himself the question: If the makers of the Act had themselves come across this ruck in the texture of it, how would they have straightened it out? He must then do as they would have done. A judge must not alter the material of which it is woven, but he can and should iron out the creases. (emphasis supplied) 48. Let us now also refer to the various cases that have been pressed into service by the petitioners. The same deal with the proposition as to the scope of an Explanation and the limits upto which it can stretch. Yet given the present scenario, we cannot find a strong footing to rely on the same in understating Section 3 of the 2002 Act as it stands today. Reference has been made to K.P. Varghese, Supra at Footnote No.19 wherein the Court noted the Heydon Case and to the fact that the speech of the mover of the bill can explain the reason for introduction of the bill and help as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsonance with the contemporary thinking of the international community and in consonance with the Vienna and Palermo Conventions. 49. Reference has also been made to judgments which refer to the purport of side notes in the interpretation of a statute in Thakurain Balraj Kunwar Anr. vs. Rae Jagatpal Singh 1904 SCC OnLine PC 9: (1904) 1 All LJ 384, Nalinakhya Bysack vs. Shyam Sunder Haldar Ors. AIR 1953 SC 148, Chandroji Rao vs. Commissioner of Income Tax, M.P., Nagpur (1970) 2 SCC 23, Board of Muslim Wakfs, Rajasthan vs. Radha Kishan Ors. (1979) 2 SCC 468, Tara Prasad Singh Ors. vs. Union of India Ors. (1980) 4 SCC 179, Sakshi vs. Union of India Ors. (2004) 5 SCC 518, Guntaiah Ors. vs. Hambamma Ors. (2005) 6 SCC 228 and C. Gupta vs. Glaxo-Smithkline Pharmaceuticals Ltd. (2007) 7 SCC 171. However, we find them of no use in the present case as we have already held that the Explanation only goes on to clarify the main or original provision. Other cases, which are of no help to the present issue, are the cases of D.R. Fraser Co. Ltd. vs. The Minister of National Revenue 1948 SCC OnLine PC 65 : AIR 1949 PC 120, Tofan Singh, Supra at Footnote No.31 (also at Footnot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the necessity of projection from the definition will render the predicate offence and money-laundering indistinguishable. This, in our view, is ill founded and fallacious. This plea cannot hold water for the simple reason that the scheduled offences in the 2002 Act as it stands (amended upto date) are independent criminal acts. It is only when money is generated as a result of such acts that the 2002 Act steps in as soon as proceeds of crime are involved in any process or activity. Dealing with such proceeds of crime can be in any form -being process or activity. Thus, even assisting in the process or activity is a part of the crime of money-laundering. We must keep in mind that for being liable to suffer legal consequences of ones action of indulging in the process or activity, is sufficient and not only upon projection of the ill-gotten money as untainted money. Many members of a crime syndicate could then simply keep the money with them for years to come, the hands of the law in such a situation cannot be bound and stopped from proceeding against such person, if information of such illegitimate monies is revealed even from an unknown source. 52. The next question is: wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contemporaneously, including for further investigation in a pending case, if any. On receipt of such information, the jurisdictional police would be obliged to register the case by way of FIR if it is a cognizable offence or as a non-cognizable offence (NC case), as the case may be. If the offence so reported is a scheduled offence, only in that eventuality, the property recovered by the authorised officer would partake the colour of proceeds of crime under Section 2(1)(u) of the 2002 Act, enabling him to take further action under the Act in that regard. 54. Even though, the 2002 Act is a complete Code in itself, it is only in respect of matters connected with offence of money-laundering, and for that, existence of proceeds of crime within the meaning of Section 2(1)(u) of the Act is quintessential. Absent existence of proceeds of crime, as aforesaid, the authorities under the 2002 Act cannot step in or initiate any prosecution. 55. In other words, the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of proceeds of crime . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in, Subs. by the Finance Act, 2015 (20 of 2015), sec. 146, for clause (b) (w.e.f. 14-5-2015) [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.]. Ins. by Act 13 of 2018, sec. 208(b)(i) (w.e.f. 19-4-2018 vide G.S.R. 383(E), dated 19th April, 2018)., [Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements referred to in sub-section (1), the authorised officer can proceed to issue order of provisional attachment of such proceeds of crime. Before issuing a formal order, the authorised officer has to form his opinion and delineate the reasons for such belief to be recorded in writing, which indeed is not on the basis of assumption, but on the basis of material in his possession. The order of provisional attachment is, thus, the outcome of such satisfaction already recorded by the authorised officer. Notably, the provisional order of attachment operates for a fixed duration not exceeding one hundred and eighty days from the date of the order. This is yet another safeguard provisioned in the 2002 Act itself. 58. As per the first proviso, in ordinary situation, no order of provisional attachment can be issued until a report has been forwarded to a Magistrate under Section 173 of the 1973 Code in relation to the scheduled offence, or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or Court for taking cognizance of the scheduled offence, as the case may be. It further provides that a similar report or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards provided in the main provision as well as the second proviso to be fulfilled upto the highest ranking ED official, before invoking such urgent or immediate action. We fail to understand as to how such a provision can be said to be irrelevant much less manifestly arbitrary, in the context of the purposes and objects behind the enactment of the 2002 Act. Such provision would strengthen the mechanism of prevention and regulation of process or activity resulting into commission of money-laundering offence; and also, to ensure that the proceeds of crime are properly dealt with as ordained by the 2002 Act, including for vesting in the Central Government. 60. As a matter of fact, prior to amendment of 2015, the first proviso acted as an impediment for taking such urgent measure even by the authorised officer, who is no less than the rank of Deputy Director. We must hasten to add that the nuanced distinction must be kept in mind that to initiate prosecution for offence under Section 3 of the Act registration of scheduled offence is a prerequisite, but for initiating action of provisional attachment under Section 5 there need not be a pre-registered criminal case in connecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that regard. This ensures the fairness in the action as also accountability of the Authority passing provisional attachment order. Further, in terms of Section 5(3), the provisional attachment order ceases to operate on the date of an order passed by the Adjudicating Authority under Section 8(3) or the expiry of the period specified in sub-section (1), whichever is earlier. In addition, under Section 5(5) the authorised officer is obliged to file a complaint before the Adjudicating Authority within a period of thirty days from such provisional attachment. Going by the scheme of the 2002 Act and Section 5 thereof in particular, it is amply clear that sufficient safeguards have been provided for as preconditions for invoking the powers of emergency attachment in the form of provisional attachment. 62. The background in which the amendment of 2013 became necessary can be culled out from the Report titled Anti-Money Laundering and Combating the Financing of Terrorism dated 25.6.2010. The relevant paragraphs of the said report read thus: 143. It is no formal and express legal condition that a conviction for the predicate offence is required as a precondition to prosecute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 3 PMLA definition of the ML offence should be brought in line with the Vienna and Palermo Conventions so as to also fully cover the physical concealment and the sole acquisition, possession and use of all relevant proceeds of crime. - The present strict and formalistic interpretation of the evidentiary requirements in respect of the proof of the predicate offence should be put to the test of the courts to develop case law and receive direction on this fundamental legal issue. - The level of the maximum fine imposable on legal persons should be raised or left at the discretion of the court to ensure a more dissuasive effect. - The practice of making a conviction of legal persons contingent on the concurrent prosecution/conviction of a (responsible) natural person should be abandoned. - Consider the abolishment of the redundant section 8A NDPS Act drug-related ML offence or, if maintained, bring the sanctions at a level comparable to that of the PMLA offence. *** *** *** 233.Confiscation under Chapter III of the PMLA is only possible when it relates to ―proceeds of crime as defined in s. 2(1)(u), i.e. resulting from a scheduled offence, and when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Summary of factors relative to s.2.3 underlying overall rating R.3 PC Confiscation of property laundered is not covered in the relevant legislation and depends on a conviction for a scheduled predicate offence. The UAPA does not allow for confiscation of intended instrumentalities used in terrorist acts or funds collected to be used by terrorist individuals. The UAPA and NDPS Act do not allow for property of corresponding value to be confiscated. There are no clear provisions and procedures on how to deal with the assets in the case of criminal proceedings when the suspect died. Concerns based on the limited number of confiscations in relation to ML/FT offences. 64. As a sequel to these recommendations of FATF and the observations in the stated Report, Section 5 came to be amended vide Act 2 of 2013. In this connection, it may be useful to refer to the Fifty Sixth Report of the Standing Committee on Finance relating to the 2011 Bill, which reads thus: 5. Amendment in provisions implemented by Enforcement Directorate: (i)Attachment of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the mechanism regarding prevention of money-laundering. It is not right in assuming that the attachment of property (provisional) under the second proviso, as amended, has no link with the scheduled offence. Inasmuch as Section 5(1) envisages that such an action can be initiated only on the basis of material in possession of the authorised officer indicative of any person being in possession of proceeds of crime. The precondition for being proceeds of crime is that the property has been derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence. The sweep of Section 5(1) is not limited to the accused named in the criminal activity relating to a scheduled offence. It would apply to any person (not necessarily being accused in the scheduled offence), if he is involved in any process or activity connected with the proceeds of crime. Such a person besides facing the consequence of provisional attachment order, may end up in being named as accused in the complaint to be filed by the authorised officer concerning offence under Section 3 of the 2002 Act. 66. Be it noted that the attachment must be only in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it in the Central Government for effective prevention of money-laundering. 69. We find force in the stand taken by the Union of India that the objectives of enacting the 2002 Act was the attachment and confiscation of proceeds of crime which is the quintessence so as to combat the evil of money-laundering. The second proviso, therefore, addresses the broad objectives of the 2002 Act to reach the proceeds of crime in whosoever s name they are kept or by whosoever they are held. To buttress this argument, reliance has been placed on the dictum in Attorney General for India, Supra at Footnote No.428 (also at Footnote No.175) and Raman Tech. Process Engg. Co. Anr. vs. Solanki Traders, (2008) 2 SCC 302 (also at Footnote No.430). 70. The procedural safeguards provided in respect of provisional attachment are effective measures to protect the interest of the person concerned who is being proceeded with under the 2002 Act, in the following manner as rightly indicated by the Union of India: i. For invoking the second proviso, the Director or any officer not below the rank of Deputy Director will have to first apply his mind to the materials on record before recording in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and also take into account all relevant materials placed on record before the Adjudicating Authority . After following the above procedure, the Adjudicating Authority will record its finding whether all the properties referred to in the SCN are involved in money-laundering or not. x. While passing order under Section 8(2) read with Section 8(3) there are two possibilities which might happen: a. the Adjudicating Authority may confirm the order of provisional attachment, in which case again, the confirmation will continue only up to i. the period of investigation not exceeding 365 days, or ii. till the pendency of any proceedings relating to any offence under the 2002 Act or under the corresponding law of any other country before the competent Court of criminal jurisdiction outside India. b. Adjudicating Authority may disagree and not confirm the provisional attachment, in which case attachment over the property ceases. xi. Under Section 8(4) of the 2002 Act, upon confirmation of the order of provisional attachment, the Director or other officer authorized by him shall take the possession of property attached. xii. Under Section 8(5) of the 2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is further appealable before the High Court under Section 42 of the 2002 Act on any question of fact or question of law arising out of the order passed by the Appellate Tribunal. It is, thus, clear that the provision in the form of Section 5 provides for a balancing arrangement to secure the interest of the person as well as to ensure that the proceeds of crime remain available for being dealt with in the manner provided by the 2002 Act. This provision, in our opinion, has reasonable nexus with the objects sought to be achieved by the 2002 Act in preventing and regulating money-laundering effectively. The constitutional validity including interpretation of Section 5 has already been answered against the petitioners by different High Courts 14 . We do not wish to dilate on those decisions for the view already expressed hitherto. SECTION 8 OF THE 2002 ACT 71. This section is part of Chapter III dealing with attachment, adjudication and confiscation. It provides for the procedure and safeguards to be adhered to by the Authorities referred to in Section 48 and in particular the Adjudicating Authority appointed by the Central Government under Section 6, for dealing wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering. (3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of section 5 or retention of property or, Subs. by Act 2 of 2013, sec. 6(ii)(a), for record seized under section 17 or section 18 and record a finding to that effect, such attachment or retention of the seized property (w.e.f. 15-2-2013), vide S.O. 343(E), dated 8-2-2013. [record seized or frozen under section 17 or section 18 and record a finding to that effect, whereupon such attachment or retention or freezing of the seized or frozen property] or record shall- (a) continue during, Ins. by Act 13 of 2018, sec. 208(c)(i) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April, 2018). [investigation for a period not exceeding, Subs. by Act 7 of 2019, sec. 22(i), for ninety days (w.e.f. 20-3-2019, vide G.S.R. 225(E), dated 19th March, 2019). [three hundred and sixty-five days] or] the pendency of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3) of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of money-laundering after having regard to the material before it.] Ins. by the Finance Act, 2015 (20 of 2015), sec. 147(ii) (w.e.f. 14-5-2015), [(8) Where a property stands confiscated to the Central Government under sub-section (5), the Special Court, in such manner as may be prescribed, may also direct the Central Government to restore such confiscated property or part thereof of a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering: Provided that the Special Court shall not consider such claim unless it is satisfied that the claimant has acted in good faith and has suffered the loss despite having tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t before the Adjudicating Authority within thirty days in terms of Section 5(5) of the 2002 Act. Concededly, filing of complaint before the Adjudicating Authority in terms of Section 5(5) within thirty days from the provisional attachment for confirmation of such order of provisional attachment is different than the complaint to be filed before the Special Court under Section 44(1)(b) for initiating criminal action regarding offence of money-laundering punishable under Section 4 of the 2002 Act. Furthermore, the provisional attachment would operate only for a period of one hundred and eighty days from the date of order passed under Section 5(1) of the 2002 Act in terms of that provision. Whereas, Section 8(3) refers to the period of three hundred and sixty-five days from the passing of the order under sub-section (2) of Section 8 by the Adjudicating Authority and confirming the provisional attachment order and the order of confirmation of attachment operates until the confiscation order is passed or becomes final in terms of order passed under Section 8(5) or 8(7) or 58B or 60(2A) by the Special Court. The order of confirmation of attachment could also last during the pendency of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment in exercise of powers under Section 73 of the 2002 Act regarding the manner of taking possession of attached or frozen properties confirmed by the Adjudicating Authority in 2013, and also regarding restoration of confiscated property in 2019. Suffice it to observe that direction under Section 8(4) for taking possession of the property in question before a formal order of confiscation is passed merely on the basis of confirmation of provisional attachment order, should be an exception and not a rule. That issue will have to be considered on case-to-case basis. Upon such harmonious construction of the relevant provisions, it is not possible to countenance challenge to the validity of sub-section (4) of Section 8 of the 2002 Act. 75. The learned counsel appearing for the Union of India, had invited our attention to the recommendations made by FATF in 2003 and 2012 to justify the provision under consideration. The fact that non-conviction based confiscation model is permissible, it does not warrant an extreme and drastic action of physical dispossession of the person from the property in every case - which can be industrial/commercial/business and also residential propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon any place within the limits of the area assigned to them or in respect of which, has been specifically authorised for the purposes of Section 16 by the competent authority, for inspection of records or other matters, in the event, it has reason to believe on the basis of material in possession that an offence under Section 3 of the 2002 Act has been committed. However, when it comes to search and seizure, Section 17 of the 2002 Act permits only the Director or any other officer not below the rank of Deputy Director authorised by him to exercise that power on the basis of information in his possession and having reason to believe that any person has committed some act which constitutes money-laundering or is in possession of proceeds of crime involved in money-laundering, including the records and property relating to money-laundering. Section 17 of the 2002 Act, as amended, reads thus: 17. Search and seizure.-(1) Where, Subs. by Act 21 of 2009, sec. 7(i), for the Director (w.e.f. 1-6-2009) [the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section,] on the basis of information in his possession, has reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmediately after search and seizure, Ins. by Act 2 of 2013, sec. 14(iii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013). [or upon issuance of a freezing order], forward a copy of the reasons so recorded along with 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 reasons and material for such period, as may be prescribed. (3) Where an authority, upon information obtained during survey under section 16, is satisfied that any evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing, enter and search the building or place where such evidence is located and seize that evidence: Provided that no authorisation referred to in sub-section (1) shall be required for search under this sub-section. 18 [(4) The authority seizing any record or property under sub-section (1) or freezing any record or property under sub-section (1A) shall, within a period of thirty days from such seizure or freezing, as the case may be, file an application, requesting for retention of such rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 22 of the 1973 Code. Section 4(2) pertains to offences under other laws (other than IPC) which are required to be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, 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. Similarly, Section 5 of the 1973 Code envisages that nothing in the 1973 Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force. 79. Undoubtedly, the 2002 Act is a special self-contained law; and Section 17 is a provision, specifically dealing with the matters concerning searches and seizures in connection with the offence of money-laundering to be inquired into and the proceeds of crime dealt with under the 2002 Act. We have already noted in the earlier part of this judgment that before resorting to action of provisional attachment, registration of scheduled offence or complaint filed in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevention of money-laundering and to secure the proceeds of crime for being dealt with appropriately under the 2002 Act. 80. As aforementioned, Section 17 provides for inbuilt safeguards, not only mandating exercise of power by high ranking officials, of the rank of Director (not below the rank of Additional Secretary to the Government of India who is appointed by a Committee chaired by the Central Vigilance Commissioner in terms of Section 25 of the CVC Act) or Deputy Director authorised by the Director in that regard, but also to adhere to other stipulations of recording of reasons regarding the belief formed on the basis of information in his possession about commission of offence of money-laundering and possession of proceeds of crime involved in money-laundering. Further, such recorded reasons along with the materials is required to be forwarded to the three-member Adjudicating Authority (appointed under Section 6 of the 2002 Act headed by a person qualified for appointment as District Judge) in a sealed cover to be preserved for specified period, thus, guaranteeing fairness, transparency and accountability regarding the entire process of search and seizure. This is unli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra at Footnote No.425, this Court upheld the dispensation provided in Section 37 of the FERA by adopting purposive interpretation to give full play to the legislative intent and negating the argument regarding incorporation of the provisions of the 1973 Code by pen and ink in that section, as is the argument advanced before us. 84. As noticed earlier, in terms of Section 17(2) of the 2002 Act immediately after the search and seizure, the Authority conducting the search is obliged to forward a copy of the reasons recorded and materials in his possession to the Adjudicating Authority in a sealed envelope. This sealed envelope is required to be preserved for period as specified under the Rules framed in that regard so that it is not tempered with in any manner and to ensure fairness of the procedure including accountability of the Authority. Not only that, in terms of Section 17(4) of the 2002 Act the Authority seizing the record or property is obliged to submit an application before the Adjudicating Authority within a period of thirty days therefrom for the retention of the said record and Adjudicating Authority in turn gives opportunity to be heard by issuing show cause notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of unamended Rule. It is well-settled that if the Rule is not consistent with the provisions of the Act, the amended provisions in the Act must prevail. The statute cannot be declared ultra vires on the basis of Rule framed under the statute. The precondition in the proviso in Rule 3(2) cannot be read into Section 17 of the 2002 Act, more so contrary to the legislative intent in deleting the proviso in Section 17(1) of the 2002 Act. In any case, it is open to the Central Government to take necessary corrective steps to obviate confusion caused on account of the subject proviso, if any. SEARCH OF PERSONS 87. The subject of search of persons is dealt with in Section 18 of the 2002 Act forming part of Chapter V. Even in respect of this provision, the challenge is essentially founded on the deletion of proviso in sub-section (1) of Section 18 vide Finance (No.2) Act, 2019 which was pari materia with the proviso in Section 17(1) of the 2002 Act - stipulating that no search of any person shall be made unless in relation to the scheduled offence a report has been forwarded to a Magistrate under Section 157 of the 1973 Code, etc. The Section 18, as amended reads t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty seized in the course of the search and obtain the signatures of the witnesses on the list. (8) No female shall be searched by any one except a female. (9) The authority shall record the statement of the person searched under sub-section (1) or sub-section (5) in respect of the records or proceeds of crime found or seized in the course of the search: 24 [***] (10) The authority, seizing any record or property under sub-section (1) shall, within a period of thirty days from such seizure, file an application requesting for retention of such record or property, before the Adjudicating Authority. For the reasons noted to negate the challenge to the deletion of proviso in Section 17(1) of the 2002 Act, the same would apply with full force for rejecting the same argument in respect of deletion of proviso in Section 18(1) of the 2002 Act. Suffice it to observe that even under Section 18 of the 2002 Act, the Authority authorised to exercise power of search of person is obliged to adhere to identical inbuilt safeguards as in the case of exercise of power under Section 17 of the 2002 Act. In addition to the similar safeguards in terms of Section 18(3) of the 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2002 Act, if the person to be searched is taken to a Gazetted Officer or the Magistrate, then such Officer or Magistrate may release the person if there is no ground for search and under Section 18(6), the Authority is obliged to call at least two witnesses to attend to witness the search, in whose presence, the search is to be carried out. In terms of Section 18(7), the Authority seizing any property during the search of such a person has to prepare a list of the record or the property seized which is required to be signed by the witnesses to ensure that no tempering thereof takes place later on. In case, search of a female is to be carried out, in terms of Section 18(8), it could be done only by a female. Significantly, the Authority seizing any record or property during the search of the person, is obliged to submit an application to the Adjudicating Authority within thirty days for permitting retention of record or property. On such application, the Adjudicating Authority gives opportunity of hearing to the person concerned as to why record or property should not be retained in terms of Section 18(10). Such inbuilt safeguards are provided to secure the interest of the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person so arrested before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within twenty-four hours. This production is also to comply with the requirement of Section 167 of the 1973 Code. There is nothing in Section 19, which is contrary to the requirement of production under Section 167 of the 1973 Code, but being an express statutory requirement under the 2002 Act in terms of Section 19(3), it has to be complied by the authorised officer. Section 19, as amended from time to time, reads thus: 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 orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch activity constituting offence of money-laundering. In other words, this legislation is an amalgam of different facets including setting up of agencies and mechanisms for coordinating measures for combating money-laundering. Chapter III is a provision to effectuate these purposes and objectives by attachment, adjudication and confiscation. The adjudication is done by the Adjudicating Authority to confirm the order of provisional attachment in respect of proceeds of crime involved in money-laundering. For accomplishing that objective, the authorities appointed under Chapter VIII have been authorised to make inquiry into all matters by way of survey, searches and seizures of records and property. These provisions in no way invest power in the Authorities referred to in Chapter VIII of the 2002 Act to maintain law and order or for that matter, purely investigating into a criminal offence. The inquiry preceding filing of the complaint by the authorities under the 2002 Act, may have the semblance of an investigation conducted by them. However, it is essentially an inquiry to collect evidence to facilitate the Adjudicating Authority to decide on the confirmation of provisional attachme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned legislations. While adverting to the safeguards provided under that legislation before effecting such arrest, the Court noted as follows: Safeguards against abuse of power 36. From the above discussion, it is amply clear that power to arrest a person by a Customs Officer is statutory in character and cannot be interfered with. Such power of arrest can be exercised only in those cases where the Customs Officer has reason to believe that a person has been guilty of an offence punishable under Sections 132, 133, 135, 135-A or 136 of the Act. Thus, the power must be exercised on objective facts of commission of an offence enumerated and the Customs Officer has reason to believe that a person sought to be arrested has been guilty of commission of such offence. The power to arrest thus is circumscribed by objective considerations and cannot be exercised on whims, caprice or fancy of the officer. 37. The section, Ed.: Section 104 of the Customs Act, 1962. also obliges the Customs Officer to inform the person arrested of the grounds of arrest as soon as may be. The law requires such person to be produced before a Magistrate without unnecessary delay. 38. The law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In yet another decision in Ahmed Noormohmed Bhatti, Supra at Footnote No.250, this Court opined that the provision cannot be held to be unreasonable or arbitrary and, therefore, unconstitutional merely because the authority vested with the power may abuse his authority. (Also see Manzoor Ali Khan, Supra at Footnote No.251). 90. Considering the above, we have no hesitation in upholding the validity of Section 19 of the 2002 Act. We reject the grounds pressed into service to declare Section 19 of the 2002 Act as unconstitutional. On the other hand, we hold that such a provision has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act of prevention of money-laundering and confiscation of proceeds of crime involved in money-laundering, including to prosecute persons involved in the process or activity connected with the proceeds of crime so as to ensure that the proceeds of crime are not dealt with in any manner which may result in frustrating any proceedings relating to confiscation thereof. BURDEN OF PROOF 91. The validity of Section 24 of the 2002 Act has been assailed. This section has been amended in 2013 vide Act 2 of 2013. Before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion is not out of proceeds of money-laundering crime, being not only on the accused but also on anyone who is in possession of the proceeds of crime, should be subject to adequate safeguards to protect the innocent. Finally, the provision came to be amended by Act 2 of 2013 which came into force with effect from 15.2.2013 and reads thus: Subs. By Act 2 of 2013, sec. 19, for section 24 (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013)., [24. Burden of proof.- In any proceeding relating to proceeds of crime under this Act,- (a) in the case of a person charged with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and (b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-laundering.] From the plain language of the amended provision, which is subject matter of assail in these cases being unconstitutional, clearly indicates that it concerns (all) proceeding(s) relating to proceeds of crime under the 2002 Act. The expression proceeding has not been defined i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of the proceeds of crime and not about the criminality of the offence under Section 3 of the 2002 Act. When this provision is made applicable to the proceeding before the Authority, it would not be necessary to follow the strict principle of standard of proof beyond reasonable doubt, as applicable in criminal trials. That principle will have no bearing on the proceeding before the Authority. However, when the same evidence and provision is relied upon in the proceeding before the Special Court regarding trial of offence of money-laundering under Section 3 of the 2002 Act, it would have a different connotation in the context of a criminal trial. 93. Be that as it may, this Section 24 deals with two situations. The first part concerns the person charged with the offence of money-laundering under Section 3. The second part [Clause (b)] concerns any other person. Taking the second part first, such other person would obviously mean a person not charged with the offence of money-laundering under Section 3 of the 2002 Act. The two parts, in one sense, are mutually exclusive. If a person is charged with the offence of money-laundering under Section 3 of the 2002 Act owing to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nquiry, such statements are called oral evidence; (2) Subs. by Act 21 of 2000, sec. 92 and Sch.II-1(a), for all documents produced for the inspection of the Court (w.e.f. 17-10-2000), [all documents including electronic records produced for the inspection of the Court], such documents are called documentary evidence. The other relevant definitions are: 3. Interpretation clause.-In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context:- Proved . A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Disproved . A fact is said to be disproved when, after considering the matters before it, the Court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist. Not proved . A fact is said not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbhu Nath Mehra vs. The State of Ajmer AIR 1956 SC 404, noted that the provisions, such as Section 106 25 of the Evidence Act, is not intended to relieve the prosecution of its burden to prove the guilt of the accused beyond reasonable doubt, but the Section would apply to cases where the prosecution has succeeded in proving facts for which a reasonable inference can be drawn regarding the existence of certain other facts, unless the accused by virtue of special knowledge regarding such facts failed to offer any explanation which might drive the Court to draw a different inference. The Court quoted with approval paragraph 33 of the decision in Shambhu Nath Mehra, Supra at Footnote No.545, which reads thus: 33. Presumption of fact is an inference as to the existence of one fact from the existence of some other facts, unless the truth of such inference is disproved. Presumption of fact is a rule in law of evidence that a fact otherwise doubtful may be inferred from certain other proved facts. When inferring the existence of a fact from other set of proved facts, the court exercises a process of reasoning and reaches a logical conclusion as the most probable position. The above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man . (emphasis supplied) The respondents have rightly invited our attention to several other statutes 26 providing for shifting of the burden of proof on the accused, as in the case of Section 24 of the 2002 Act. The constitutional validity of similar provisions has been upheld by this Court from time to time. In the case of Noor Aga, Supra at Footnote No.384 (also at Footnote No.55), it has been observed that the Court while interpreting the provision, such as Section 24 of the 2002 Act, must keep in mind that the concerned Act has been the outcome of the mandate contained in the international convention, as is the case on hand. Further, only because the burden of proof under certain circumstances is placed on the accused, the same, by itself would not render the legal provision unconstitutional. The question whether the burden on the accused is a legal burden or an evidentiary burden, would depend on the statute and its purport and object. Indeed, it must pass the test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeds of crime and the person concerned was involved in any process or activity connected therewith, itself, constitutes offence of money-laundering. The nature of process or activity has now been elaborated in the form of Explanation inserted vide Finance (No.2) Act, 2019. On establishing these foundational facts in terms of Section 24 of the 2002 Act, a legal presumption would arise that such proceeds of crime are involved in money-laundering. The fact that the person concerned had no causal connection with such proceeds of crime and he is able to disprove the fact about his involvement in any process or activity connected therewith, by producing evidence in that regard, the legal presumption would stand rebutted. 98. The person falling under the first category being person charged with the offence of money-laundering, presupposes that a formal complaint has already been filed against him by the authority authorised naming him as an accused in the commission of offence of money-laundering. As observed in P.N. Krishna Lal, Supra at Footnote No.382, the Court cannot be oblivious about the purpose of the law. Further, the special provisions or the special enactments as in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o standards can be said to be unreasonable much less manifestly arbitrary and unconstitutional. 101. Reverting to Section 24(b) of the 2002 Act, that concerns person other than the person charged with the offence of money-laundering under Section 3 of the 2002 Act. In his case, the expression used in Clause (b) is may presume . This is essentially a factual presumption or discretionary presumption as expounded by this Court in A. Vaidyanatha Iyer, Supra at Footnote No.549 (also at Footnote No.392). In paragraph 14 of the decision, the Court noted the marked distinction between the words shall presume and may presume as follows: (14). Therefore where it is proved that a gratification has been accepted, then the presumption shall at once arise under the section. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. It may here be mentioned that the legislature has chosen to use the words shall presume and not may presume , the former a presumption of law and latter of fact. Both these phrases have been defined in the Indian Evidence Act, no doubt for the purpose of that Act, but S. 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority or the Court, as the case may be. The legal presumption is about the fact that the proceeds of crime are involved in money-laundering which, however, can be rebutted by the person by producing evidence within his personal knowledge. 102. Be it noted that the presumption under Section 24(b) of the 2002 Act is not a mandatory legal presumption, unlike in the case falling under the other category, namely Section 24(a). If the person has not been charged with the offence of money-laundering, the legal presumption under Section 24(b) can be invoked by the Adjudicating Authority or the Court, as the case may be. More or less, same logic as already noted while dealing with the efficacy of Section 24(a) of the 2002 Act, would apply even to the category of person covered by Section 24(b), in equal measure. 103. We, therefore, hold that the provision under consideration namely Section 24 has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act and cannot be regarded as manifestly arbitrary or unconstitutional. SPECIAL COURTS 104. The expression Special Court has been defined in Section 2(1)(z), which in turn refers to Section 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Special Court; or] Ins. by Act 2 of 2013, sec. 21(iii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013), [(c) if the court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money-laundering under sub-clause (b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed. (d) a Special Court while trying the scheduled offence or the offence of money-laundering shall hold trial in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) as it applies to a trial before a Court of Session.] Ins. by the Finance (No.2) Act, 2019, sec. 199(ii) (w.e.f. 1-8-2019), [Explanation.-For the removal of doubts, it is clarified that,- (i) the jurisdiction of the Special Court while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be dependent upon any orders passed in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [(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]; . The amendment of 2013 in fact clarifies the dispensation to be followed in regard to trials concerning offence of money-laundering under this Act and the trial in relation to scheduled offence including before the Special Court trying such (scheduled) offence. By virtue of this clause, the trials regarding the offence of money-laundering need to proceed before the Special Court constituted for the area in which the offence of money-laundering has been committed. In case the scheduled offence is triable by Special Court under the special enactment elsewhere, the provision, as amended, makes it amply clear that both the trials after coming into effect of this Act need to proceed independently, but in the area where the offence of money-laundering has been committed. 105. In that, the offence of money- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty relating to a scheduled offence. 108. The stipulation in Clause (b) of sub-section (1) of Section 44 has been amended vide Act 20 of 2005, Act 2 of 2013 and the Finance (No.2) Act, 2019. Consequent to amendment of 2013, the Clause (b) read thus: 44. Offences triable by Special Courts.-(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a)*** (b) a Special Court may, The words upon perusal of police report of the facts which constitute an offence under this Act or omitted by Act 20 of 2005, sec. 6 (w.e.f. 1-7-2005). [***] upon a complaint made by an authority authorised in this behalf under this Act take, Subs. by Act 2 of 2013, sec. 21(ii), for cognizance of the offence for which the accused is committed to it for trial (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013). [cognizance of offence under section 3, without the accused being committed to it for trial]; . Later, a proviso came to be inserted vide Finance (No.2) Act, 2019, which reads thus: 44. Offences triable by Special Courts.-(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a)*** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into play in such cases where the complaint is yet to be filed owing to the pendency of inquiry before the authorities, under Chapters V and VIII of the 2002 Act. In that view of the matter and more so keeping in mind the purposes and objects behind the enactment of 2002 Act, such a provision must be regarded as having reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act. Accordingly, for the view taken by us, we do not find any dichotomy in these provisions, much less being manifestly arbitrary or unconstitutional. 110. We now revert to Clause (c) of sub-section (1) of Section 44 of the 2002 Act. The same has undergone amendment vide Act 2 of 2013 and post that amendment, it reads thus: 44. Offences triable by Special Courts.-(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a)*** (b)*** Ins. by Act 2 of 2013, sec. 21(iii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013), [(c) if the court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money-laundering under sub-clause (b), it s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution. However, we are dealing with the dispensation provided by the law made by the Parliament in the form of 2002 Act. This being a special legislation and keeping in view the purport of Sections 65 and 71 of the 2002 Act, it is not possible to countenance the ground of challenge under consideration. We may usefully refer to paragraph 28 of Kalyan Singh, Supra at Footnote No.571, which reads thus: 28. In the present case, the power of transfer is being exercised to transfer a case from one Special Judge to another Special Judge, and not to the High Court. The fact that one Special Judge happens to be a Magistrate, whereas the other Special Judge has committed the case to a Court of Session would not make any difference as, as has been stated hereinabove, even a right of appeal from a Magistrate to the Sessions Court, and from the Sessions Court to the High Court could be taken away under the procedure established by law i.e. by virtue of Sections 407(1) and (8) if the case is required to be transferred from the Magistrate at Rae Bareilly to the High Court itself. Hence, under Section 407, even if 2 tiers of appeal are done away with, there is no infraction of Article 21 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing further investigation against any accused person involved in respect of offence of money-laundering for which complaint has already been filed, whether he has been named in the complaint or not. Such a provision, in fact, is a wholesome provision to ensure that no person involved in the commission of offence of money-laundering must go unpunished. It is always open to the Authority authorised to seek permission of the Court during the trial of the complaint in respect of which cognizance has already been taken by the Court to bring on record further evidence which request can be dealt with by the Special Court in accordance with law keeping in mind the provisions of the 1973 Code as well. It is also open to the Authority authorised to file a fresh complaint against the person who has not been named as accused in the complaint already filed in respect of same offence of money-laundering, including to request the Court to proceed against such other person appearing to be guilty of offence under Section 319 of the 1973 Code, which otherwise would apply to such a trial. 113. The petitioners may be justified in making grievance that the provision though permits the Special Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person who is under the age of sixteen years, or is a woman or is sick or infirm, Ins. by Act 13 of 2018, s. 208(e)(ii) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April, 2018). [or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees], may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by- (i) the Director; or (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government. Ins. by Act 20 of 2005, sec. 7 (w.e.f. 1-7-2005). [(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the amendment effected to Section 45(1) of the 2002 Act vide Act 13 of 2018, the declaration by this Court will be of no consequence. This argument need not detain us for long. We say so because the observation in State of Manipur, Supra at Footnote No.159 in paragraph 29 of the judgment that owing to the declaration by a Court that the statute is unconstitutional obliterates the statute entirely as though it had never been passed, is contextual. In this case, the Court was dealing with the efficacy of the repealing Act. While doing so, the Court had adverted to the repealing Act and made the stated observation in the context of lack of legislative power. In the process of reasoning, it did advert to the exposition in Behram Khurshid Pesikaka, Supra at Footnote No.310 and Deep Chand, Supra at Footnote No. 210 (also at Footnote No.69) including American jurisprudence expounded in Cooley on Constitutional Limitations, Vol.1, page 382 and Norton vs. Shelby County, 118 US 425 (1886). 117. In the present case, however, there is no issue of lack of legislative power of the Parliament to enact a law on the subject of money-laundering. In such a situation, the enunciation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumption within Madras. It is valid in so far as it prohibits tax on outside sales, but invalid in so far as sales in which goods are delivered inside the State are concerned, because such sales are hit by Art. 286(2). The fact that it is invalid as to a part has not the effect of obliterating it out of the statute book, because it is valid as to a part and has to remain in the statute book for being enforced as to that part. The result of the enactment of the impugned Act is to lift the ban under Article 286(2), and the consequence of it is that that portion of the Explanation which relates to sales in which property passes outside Madras but the goods are delivered inside Madras and which was unenforceable before, became valid and enforceable. In this view, we do not feel called upon to express any opinion as to whether it would make any difference in the result if the impugned provision was unconstitutional in its entirety. (emphasis supplied) 118. No doubt Deep Chand, Supra at Footnote No. 210 (also at Footnote No.69) is a subsequent judgment as has been noticed in the State of Manipur, Supra at Footnote No.159. However, in the later judgment of the Constitution B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re any defect arising from the violation of the provisions of Part III of the Constitution and therefore the objection that the Madras Ceilings Act should have been re-enacted by the Madras legislature after the Seventeenth Constitutional Amendment came into force cannot be accepted. (emphasis supplied) Thus, where the defect as pointed out by the Court has been removed by virtue of the validating Act retrospectively, then the provision can be held to be intra vires provided that it does not transgress any other constitutional limitation. It is, therefore, clear from above that if by amending the provision retrospectively, the Parliament has removed the defect or has taken away the basis on which the provision was declared void then the provision cannot be said to be in conflict with Article 13 of the Constitution. In other words, if the very premise on which the judgment of the Court declaring the provision to be void has been uprooted by the Parliament, thereby resulting in the change of circumstances, the judgment could not be given effect to in the altered circumstances, then the provision cannot be held to be void. In this case, as has been stated above, the anomali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision, the Court declared that Section 45(1) of the 2002 Act, as it stood then, insofar as it imposes two further conditions for release on bail, to be unconstitutional as it violated Articles 14 and 21 of the Constitution. 121. By the amendment vide Act 13 of 2018, the defects noted by this Court in the aforementioned decision have been duly cured by deleting the words punishable for a term of imprisonment of more than three years under Part A of the Schedule in Section 45(1) of the 2002 Act and substituted by words under this Act . The question is: whether it was open to the Parliament to undo the effect of the judgment of this Court declaring the twin conditions unconstitutional? On a fair reading of the judgment, we must observe that although the Court declared the twin conditions as unconstitutional, but it was in the context of the opening part of the sub-section (1) of Section 45, as it stood then, which resulted in discrimination and arbitrariness as noticed in the judgment. But that opening part referring to class of offences, namely punishable for a term of imprisonment of more than three years under Part A of the Schedule having been deleted and, instead, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgments or orders of competent courts by changing the very basis by legislation is a well-known device of validating legislation. This Court has repeatedly pointed out that such validating legislation which removes the cause of the invalidity cannot be considered to be an encroachment on judicial power. At the same time, any action in exercise of the power under any enactment which has been declared to be invalid by a court cannot be made valid by a Validating Act by merely saying so unless the defect which has been pointed out by the court is removed with retrospective effect. The validating legislation must remove the cause of invalidity. Till such defect or the lack of authority pointed out by the court under a statute is removed by the subsequent enactment with retrospective effect, the binding nature of the judgment of the court cannot be ignored. (emphasis supplied) 123. Again, in the case of Comorin Match Industries (P) Ltd., Supra at Footnote No.302, this Court after adverting to earlier decisions, including Shri Prithvi Cotton Mills Ltd., Supra at Footnote No.300 observed in paragraph 24 as follows: 24. This case does not lay down that after a judgment ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins unimpeded. The smooth balance built with delicacy must always be maintained. (5) In its anxiety to safeguard judicial power, it is unnecessary to be overzealous and conjure up incursion into the judicial preserve invalidating the valid law competently made; (6) The court, therefore, needs to carefully scan the law to find out: (a) whether the vice pointed out by the court and invalidity suffered by previous law is cured complying with the legal and constitutional requirements; (b) whether the legislature has competence to validate the law; (c) whether such validation is consistent with the rights guaranteed in Part III of the Constitution. (7) The court does not have the power to validate an invalid law or to legalise impost of tax illegally made and collected or to remove the norm of invalidation or provide a remedy. These are not judicial functions but the exclusive province of the legislature. Therefore, they are not encroachment on judicial power. (8) In exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared ultra vires by Courts in view of its defects. 22. This Court in Bhubaneshwar Singh, Supra at Footnote No.301 has held that such legislative exercise will not amount to encroachment on the judicial power. This Court has accepted that such legislative device which removes the vice in previous legislation is not considered an encroachment on judicial power. In support of the aforesaid proposition, this Court in Bhubaneshwar Singh, Supra at Footnote No.301 relied on the proposition laid down by Hidayatullah, C.J. speaking for the Constitution Bench in Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality, Supra at Footnote No.300. 23. Again in Indian Aluminium Co. v. State of Kerala, Supra at Footnote No.303 this Court while summarising the principle held that a legislature cannot directly overrule a judicial decision but it has the power to make the decision ineffective by removing the basis on which the decision is rendered, while at the same time adhering to the constitutional imperatives and the legislature is competent to do so [see para 56 sub-para (9) at p. 1446]. 24. In Comorin Match Industries (P) Ltd. v. State of T.N., Supra at Footnote No.302, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, but can amend the statute or the provision so as to make it applicable to the past. The legislature has the power to rectify, through an amendment, a defect in law noticed in the enactment and even highlighted in the decision of the court. This plenary power to bring the statute in conformity with the legislative intent and correct the flaw pointed out by the court, can have a curative and neutralising effect. When such a correction is made, the purpose behind the same is not to overrule the decision of the court or encroach upon the judicial turf, but simply enact a fresh law with retrospective effect to alter the foundation and meaning of the legislation and to remove the base on which the judgment is founded. This does not amount to statutory overruling by the legislature. In this manner, the earlier decision of the court becomes non-existent and unenforceable for interpretation of the new legislation. No doubt, the new legislation can be tested and challenged on its own merits and on the question whether the legislature possesses the competence to legislate on the subject-matter in question, but not on the ground of overreach or colourable legislation. (emphasis supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... menace of money-laundering, including for attachment and confiscation of proceeds of crime and to prosecute persons involved in the process or activity connected with the proceeds of crime. In view of the gravity of the fallout of money-laundering activities having transnational impact, a special procedural law for prevention and regulation, including to prosecute the person involved, has been enacted, grouping the offenders involved in the process or activity connected with the proceeds of crime as a separate class from ordinary criminals. The offence of money-laundering has been regarded as an aggravated form of crime world over . It is, therefore, a separate class of offence requiring effective and stringent measures to combat the menace of money-laundering. 127. There is no challenge to the provision on the ground of legislative competence. The question, therefore, is: whether such classification of offenders involved in the offence of money-laundering is reasonable? Considering the concern expressed by the international community regarding the money-laundering activities world over and the transnational impact thereof, coupled with the fact that the presumption that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed under Section 20(8)(b), as rightly pointed out by the Additional Solicitor General, are in consonance with the conditions prescribed under clauses (i) and (ii) of sub-section (1) of Section 437 and clause (b) of sub-section (3) of that section. Similar to the conditions in clause (b) of sub-section (8), there are provisions in various other enactments - such as Section 35(1) of Foreign Exchange Regulation Act and Section 104(1) of the Customs Act to the effect that any authorised or empowered officer under the respective Acts, if, has got reason to believe that any person in India or within the Indian customs waters has been guilty of an offence punishable under the respective Acts, may arrest such person. Therefore, the condition that there are grounds for believing that he is not guilty of an offence , which condition in different form is incorporated in other Acts such as clause (i) of Section 437(1) of the Code and Section 35(1) of FERA and 104(1) of the Customs Act, cannot be said to be an unreasonable condition infringing the principle of Article 21 of the Constitution. (emphasis supplied) Again, in paragraph 351, the Constitution Bench observed thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articular Clause (6) thereof, including Sections 20(3) 31 and 20(4) 32 of the TADA Act. Same is the logic adopted under Chapter VII of the 2002 Act in constituting the Special Courts and empowering the Sessions Judge appointed as Special Court with the powers of the Magistrate. That aspect has been dealt with by the Constitution Bench in paragraphs 342 to 344, while approving the exposition in Usmanbhai Dawoodbhai Memon, Supra at Footnote No.202. The same reads thus: 342. Sub-section (8) which imposes a complete ban on release on bail against the accused of an offence punishable under this Act minimises or dilutes that ban under two conditions, those being (1) the Public Prosecutor must be given an opportunity to oppose the bail application for such release; and (2) where the Public Prosecutor opposes the bail application the court must be satisfied that the two conditions, namely, (a) there are reasonable grounds for believing that the person accused is not guilty of such offence and (b) he is not likely to commit any offence while on bail. Sub-section (9) qualifies sub-section (8) to the effect that the above two limitations imposed on grant of bail specified in sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of Section 437, may impose any condition which it considers necessary for the purposes mentioned in that sub-section; (b) 344. In this connection, we would like to quote the following observation of this Court in Usmanbhai Dawoodbhai Memon v. State of Gujarat, Supra at Footnote No.202, with which we are in agreement : (SCC pp. 286-287, para 19) Though there is no express provision excluding the applicability of Section 439 of the Code similar to the one contained in Section 20(7) of the Act in relation to a case involving the arrest of any person on an accusation of having committed an offence punishable under the Act or any rule made thereunder, but that result must, by necessary implication, follow. It is true that the source of power of a Designated Court to grant bail is not Section 20(8) of the Act as it only places limitations on such power. This is made explicit by Section 20(9) which enacts that the limitations on granting of bail specified in Section 20(8) are in addition to the limitations under the Code or any other law for the time being in force . But it does not necessarily follow that the power of a Designated Court to grant bail is relatable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces considered therein. Further, the quantum of punishment for money-laundering offence, being only seven years, cannot be the basis to undermine the seriousness and gravity of this offence. The quantum of sentence is a matter of legislative policy. The punishment provided for the offence is certainly one of the principles in deciding the gravity of the offence, however, it cannot be said that it is the sole factor in deciding the severity of offence as contended by the petitioners. Money-laundering is one of the heinous crimes, which not only affects the social and economic fabric of the nation, but also tends to promote other heinous offences, such as terrorism, offences related to NDPS Act, etc. It is a proven fact that international criminal network that support home grown extremist groups relies on transfer of unaccounted money across nation States, Ram Jethmalani Ors. vs. Union of India Ors., (2011) 8 SCC 1, thus, by any stretch of imagination, it cannot be said that there is no compelling State interest in providing stringent conditions of bail for the offence of money-laundering. In Ram Jethmalani Ors. vs. Union of India Ors., (2011) 8 SCC 1 (also at Footnote No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accused persons under Section 24 of the 2002 Act. (emphasis supplied) Thus, it is well settled by the various decisions of this Court and policy of the State as also the view of international community that the offence of money-laundering is committed by an individual with a deliberate design with the motive to enhance his gains, disregarding the interests of nation and society as a whole and which by no stretch of imagination can be termed as offence of trivial nature. Thus, it is in the interest of the State that law enforcement agencies should be provided with a proportionate effective mechanism so as to deal with these types of offences as the wealth of the nation is to be safeguarded from these dreaded criminals. As discussed above, the conspiracy of money-laundering, which is a three-staged process, is hatched in secrecy and executed in darkness, thus, it becomes imperative for the State to frame such a stringent law, which not only punishes the offender proportionately, but also helps in preventing the offence and creating a deterrent effect. 130. In the case of the 2002 Act, the Parliament had no reservation to reckon the offence of money-laundering as a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail. 46. The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in sub-section (4) of Section 21 of the Act, the court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby (emphasis supplied) We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma635. The Court while deali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. (emphasis supplied) 133. This Court has been restating this position in several decisions, including Gautam Kundu, Supra at Footnote No.207 and Amit Kumar, Supra at Footnote No.258. Thus, while considering the application for bail under Section 45 of the 2002 Act, the Court should keep in mind the abovementioned principles governing the grant of bail. The limitations on granting bail as 638 Supra at Footnote No.255 prescribed under Section 45 of the 2002 Act are in addition to the limitations under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail even to such accused. This argument is founded on clear misunderstanding of the scheme of the 2002 Act. As we have repeatedly mentioned in the earlier part of this judgment that the offence of money-laundering is one wherein a person, directly or indirectly, attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime. The fact that the proceeds of crime have been generated as a result of criminal activity relating to a scheduled offence, which incidentally happens to be a non-cognizable offence, would make no difference. The person is not prosecuted for the scheduled offence by invoking provisions of the 2002 Act, but only when he has derived or obtained property as a result of criminal activity relating to or in relation to a scheduled offence and then indulges in process or activity connected with such proceeds of crime. Suffice it to observe that the argument under consideration is completely misplaced and needs to be rejected. 137. Another incidental issue that had been raised is about the non-application of rigors of Section 45 of the 2002 Act in respect of anticipatory bail f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... patory bail has not been defined in the Code. As observed by this Court in Balchand Jain, Balchand Jain (Shri) vs. State of Madhya Pradesh, (1976) 4 SCC 572, anticipatory bail means bail in anticipation of arrest . As held by this Court, the expression anticipatory bail is a misnomer inasmuch as it is not as if bail is presently granted by the court in anticipation of arrest. An application for anticipatory bail in anticipation of arrest could be moved by the accused at a stage before an FIR is filed or at a stage when FIR is registered but the charge sheet has not been filed and the investigation is in progress or at a stage after the investigation is concluded. Power to grant anticipatory bail under Section 438 of the CrPC vests only with the Court of Session or the High Court. Therefore, ultimately it is for the court concerned to consider the application for anticipatory bail and while granting the anticipatory bail it is ultimately for the court concerned to impose conditions including the limited period of anticipatory bail , depends upon the stages at which the application for anticipatory bail is moved. A person in whose favour a pre-arrest bail order is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipatory bail can be granted only in exceptional circumstances where the court is prima facie of the view that the applicant has falsely been enroped in the crime and would not misuse his liberty. (See D.K. Ganesh Babu v. P.T. Manokaran (2007) 4 SCC 434 , State of Maharashtra v. Mohd. Sajid Husain Mohd. S. Husain (2008) 1 SCC 213 and Union of India v. Padam Narain Aggarwal, Supra at Footnote No.246) Economic Offences 78. Power under Section 438 CrPC being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offences. Economic offences stand as a different class as they affect the economic fabric of the society. In Directorate of Enforcement v. Ashok Kumar Jain, (1998) 2 SCC 105, it was held that in economic offences, the accused is not entitled to anticipatory bail. *** *** *** 83. Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitrary. Thus, it is totally misconceived that the rigors of Section 45 of the 2002 Act will not apply in the case of anticipatory bail. 140. Suffice it to observe that it would be preposterous and illogical to hold that if a person applies for bail after arrest, he/she can be granted that relief only if the twin conditions are fulfilled in addition to other stipulations predicated in the 1973 Code; but another person, who is yet to be arrested in connection with the same offence of money-laundering, will not be required to fulfil such twin conditions whilst considering application for grant of bail under Section 438 of the 1973 Code. The relief of bail, be it in the nature of regular bail or anticipatory bail, is circumscribed by the stipulations predicated in Section 45 of the 2002 Act. The underlying principles of Section 45 of the 2002 Act would get triggered in either case before the relief of bail in connection with the offence of money-laundering is taken forward. Any other view would be counterproductive and defeat the purposes and objects behind the stringent provision enacted by the Parliament for prevention of money-laundering and to combat the menace on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isoners were detained in jail for periods beyond the maximum period of imprisonment provided for the alleged offence. As remedial measure section 436A has been inserted to provide that where an under-trial prisoner other than the one accused of an offence for which death has been prescribed as one of the punishments, has been under detention for a period extending to one-half of the maximum period of imprisonment provided for the alleged offence, he should be released on his personal bond, with or without sureties. It has also been provided that in no case will an under-trial prisoner be detained beyond the maximum period of imprisonment for which he can be convicted for the alleged offence. 143. In Hussainara Khatoon Ors. vs. Home Secretary, State of Bihar, Patna (1980) 1 SCC 98, this Court stated that the right to speedy trial is one of the facets of Article 21 and recognized the right to speedy trial as a fundamental right. This dictum has been consistently followed by this Court in several cases. The Parliament in its wisdom inserted Section 436A under the 1973 Code recognizing the deteriorating state of undertrial prisoners so as to provide them with a remedy in case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch also promises justness, fairness and reasonableness in procedural matters. 144. The Union of India also recognized the right to speedy trial and access to justice as fundamental right in their written submissions and, thus, submitted that in a limited situation right of bail can be granted in case of violation of Article 21 of the Constitution. Further, it is to be noted that the Section 436A of the 1973 Code was inserted after the enactment of the 2002 Act. Thus, it would not be appropriate to deny the relief of Section 436A of the 1973 Code which is a wholesome provision beneficial to a person accused under the 2002 Act. However, Section 436A of the 1973 Code, does not provide for an absolute right of bail as in the case of default bail under Section 167 of the 1973 Code. For, in the fact situation of a case, the Court may still deny the relief owing to ground, such as where the trial was delayed at the instance of accused himself. 145. Be that as it may, in our opinion, this provision is comparable with the statutory bail provision or, so to say, the default bail, to be granted in terms of Section 167 of the 1973 Code consequent to failure of the investigating ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes that the relief under this provision cannot be granted mechanically. It is still within the discretion of the Court, unlike the default bail under Section 167 of the 1973 Code. Under Section 436A of the 1973 Code, however, the Court is required to consider the relief on case-to-case basis. As the proviso therein itself recognises that, in a given case, the detention can be continued by the Court even longer than one-half of the period, for which, reasons are to be recorded by it in writing and also by imposing such terms and conditions so as to ensure that after release, the accused makes himself/herself available for expeditious completion of the trial. 148. However, that does not mean that the principle enunciated by this Court in Supreme Court Legal Aid Committee Representing Undertrial Prisoners, Supra at Footnote No.658, to ameliorate the agony and pain of persons kept in jail for unreasonably long time, even without trial, can be whittled down on such specious plea of the State. If the Parliament/Legislature provides for stringent provision of no bail, unless the stringent conditions are fulfilled, it is the bounden duty of the State to ensure that such trials get pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n oath; (c) compelling the production of records; (d) receiving evidence on affidavits; (e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). (5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gent and to state truth upon any subject concerning which he is being examined or is expected to make statement and produce documents as may be required by virtue of sub-section (3) of Section 50 of the 2002 Act. The criticism is essentially because of sub-section (4) which provides that every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the IPC. Even so, the fact remains that Article 20(3) or for that matter Section 25 of the Evidence Act, would come into play only when the person so summoned is an accused of any offence at the relevant time and is being compelled to be a witness against himself. This position is well-established. The Constitution Bench of this Court in M.P. Sharma, Supra at Footnote No.324 (also at Footnote No.47) had dealt with a similar challenge wherein warrants to obtain documents required for investigation were issued by the Magistrate being violative of Article 20(3) of the Constitution. This Court opined that the guarantee in Article 20(3) is against testimonial compulsion and is not limited to oral evidence. Not only that, it gets triggered if the person is compelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable therefore to a person against whom a formal accusation relating to the commission of an offence has been levelled which in the normal course may result in prosecution. Whether it is available to other persons in other situations does not call for decision in this case. (emphasis supplied) 154. In the case of Mohammed Dastagir, Supra at Footnote No.325, the Court restated that the requirement to invoke the protection under Article 20(3) is that the person must be formally accused of the offence and observed thus: (9) Considered in this light, the guarantee under Art. 20(3) would be available in the present cases these petitioners against whom a First Information Report has been recorded as accused therein. It would extend to any compulsory process for production of evidentiary documents which are reasonably likely to support a prosecution against them. These observations were unnecessary in Sharma's case, Supra at Footnote No.324 (also at Footnote No.47), having regard to the fact that this Court held that the seizure of documents on a search warrant was not unconstitutional as that would not amount to a compulsory production of incriminating evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er S. 242(1). Therefore, in our opinion, the High Court was right in holding that when the inspector issued the impugned notices against the appellant he cannot be said to have been accused of any offence; and so the first essential condition for the application of Art. 20(3) is absent. We ought to add that in the present case the same conclusion would follow even if the clause accused of any offence is interpreted more liberally than was done in the case of M.P. Sharma, Supra at Footnote No.324 (also at Footnote No.47) because even if the expression accused of any offence is interpreted in a very broad and liberal way it is clear that at the relevant stage the appellant has not been, and in law cannot be, accused of any offence. . (emphasis supplied) 156. Again, the question came up for consideration before the eleven Judges of this Court in Kathi Kalu Oghad, Supra at Footnote No.44, wherein the Court noted that the person on whom summon has been served, must fulfil the character of an accused person at the time of making the statement. The Court expounded thus: (15) In order to bring the evidence within the inhibitions of cl. (3) of Art. 20 it is must be sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, or when a complaint is made relating to the commission of an offence before a Magistrate competent to try or send to another Magistrate for trial the offence. Where a Customs Officer arrests a person and informs that person of the grounds of his arrest, (which he is bound to do under Art. 22(1) of the Constitution) for the purposes of holding an enquiry into the infringement of the provisions of the Sea Customs Act which he has reason to believe has taken place, there is no formal accusation of an offence. In the case of an offence by infringement of the Sea Customs Act and punishable at the trial before a Magistrate there is an accusation when a complaint is lodged by an officer competent in that behalf before the Magistrate. (emphasis supplied) 158. Relying on the exposition in Nandini Satpathy, Supra at Footnote No.35, it was urged that it is not necessary that a formal accusation is made against the person in the form of FIR/ECIR/chargesheet/complaint to invoke protection under Article 20(3) of the Constitution and that protection is available even to a suspect at the time of interrogation. (See also Balkishan A. Devidayal, Supra at Footnote Nos.120 (also at Foo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 25 of the Evidence Act may come into play to urge that the same being in the nature of confession, shall not be proved against him. Further, it would not preclude the prosecution from proceeding against such a person including for consequences under Section 63 of the 2002 Act on the basis of other tangible material to indicate the falsity of his claim. That would be a matter of rule of evidence. 160. The Andhra Pradesh High Court in Dalmia Cement (Bharat) Limited, Supra at Footnote No.234, while dealing with the purpose of investigation under Section 50(2) noted that it is essentially for collecting evidence with regard to the involvement of a person or about existence of certain facts concerning proceeds of crime or process or activity connected with proceeds of crime, such inquiry or investigation could be commenced on the basis of information to be recorded in the internal document maintained by the authority authorised also described as ECIR. The High Court noted as follows: 33. In the light of the detailed submissions of the learned senior counsel on either side, the point for consideration is: Whether the summons issued to the second petitioner under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s distinction in the expression investigation occurring in the 1973 Code. Under Section 2(h) of the 1973 Code, the investigation is done by a police officer or by any person (other than a Magistrate) who is authorised by a Magistrate thereby to collect the evidence regarding the crime in question. Whereas, the investigation under Section 2(1)(na) of the 2002 Act is conducted by the Director or by an authority authorised by the Central Government under the 2002 Act for the collection of evidence for the purpose of proceeding under this Act. Obviously, this investigation is in the nature of inquiry to initiate action against the proceeds of crime and prevent activity of money-laundering. In the process of such investigation, the Director or the authority authorised by the Central Government referred to in Section 48 of the 2002 Act is empowered to resort to attachment of the proceeds of crime and for that purpose, also to do search and seizure and to arrest the person involved in the offence of money-laundering. While doing so, the prescribed authority (Director, Additional Director, Joint Director, Deputy Director or Assistant Director) alone has been empowered to summon any per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 has to go to the definition in the Criminal Procedure Code and that Code provides only investigation by a police officer or by an officer authorised by a magistrate . So, clearly, there was a lacuna in not enabling the Director or the Assistant Director under this Act to investigate offences. That has been cured now. . What we are doing is, we are inserting a new Section, 2(n)(a) defining the term, investigation ; making an amendment to Sections 28, 29 and 30, dealing with tribunals; amending Sections 44 and 45 of the Act to make the offence non-cognisable so that only the Director could take action; and also making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, For short, Land Customs Act , the Court opined as follows: The Police Act, 1861 (Act V of 1861), is described as an Act for the regulation of police, and is thus an Act for the regulation of that group of officers who come within the word police whatever meaning be given to that word. The preamble of the Act further says: whereas it is expedient to re-organise the police and to make it a more efficient instrument for the prevention and detection of crime, it is enacted as follows . This indicates that the police is the instrument for the prevention and detection of crime which can be said to be the main object and purpose of having the police. Sections 23 and 25 lay down the duties of the police officers and s. 20 deals with the authority they can exercise. They can exercise such authority as is provided for a police officer under the Police Act and any Act for regulating criminal procedure. The authority given to police officers must naturally be to enable them to discharge their duties efficiently. Of the various duties mentioned in s. 23, the more important duties are to collect and communicate intelligence affecting the public peace, to prevent the commission of of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exercise the powers of such officer with respect to offences under the general law or under any other special laws. But all the same, in so far as offences under the Excise Act are concerned, there is no distinction whatsoever in the nature of the powers he exercises and those which a police officer exercises in relation to offences which it is his duty to prevent and bring to light. It would be logical, therefore, to hold that a confession recorded by him during an investigation into an excise offence cannot reasonably be regarded as anything different from a confession to a police officer. For, in conducting the investigation he exercises the powers of a police officer and the act itself deems him to be a police officer, even though he does not belong to the police force constituted under the Police Act. It has been held by this court that the expression police officer in S. 25 of the Evidence Act is not confined to persons who are members of the regularly constituted police force. The position of an Excise Officer empowered under S. 77(2) of the Bihar and Orissa Excise Act is not analogous to that of a Customs Officer for two reasons. One is that the Excise Officer, does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confers upon him are analogous to or even identical with those of a police officer would not make him a police officer and, therefore, if such an officer records a confession it would not be hit by S. 25 of the Evidence Act. In our judgment what is pertinent to bear in mind for the purpose of determining as to who can be regarded a police officer for the purpose of this provision is not the totality of the powers which an officer enjoys but the kind of powers which the law enables him to exercise. The test for determining whether such a person is a police officer for the purpose of S. 25 of the Evidence Act would, in our judgment, be whether the powers of a police officer which are conferred on him or which are exercisable by him because he is deemed to be an officer in charge of police station establish a direct or substantial relationship with the prohibition enacted by S. 25, that is, the recording of a confession. In other words, the test would be whether the powers are such as would tend to facilitate the obtaining by him of a confession from a suspect or delinquent. If they do, then it is unnecessary to consider the dominant purpose for which he is appointed or the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 Cl. (a) above if he wants the Magistrate to take cognizance of an offence, for example, under S. 9 of the Act. Thus though under sub-s. (2) of S. 21 the Central Excise Officer under the Act has the powers of an officer-in-charge of a police station when investigating a cognizable case, that is for the purpose of his inquiry under sub-s. (1) of S. 21. Section 21 is in terms different from S. 78(3) of the Bihar and Orissa Excise Act, 1915 which came to be considered in Raja Ram Jaiswal s case, Supra at Footnote No.30 and which provided in terms that for the purposes of S. 156 of the Cr.P.C., 1898, the area to which an excise officer empowered under S. 77, sub-s. (2), is appointed shall be deemed to be a police-station, and such officer shall be deemed to be the officer-in-charge of such station . It cannot therefore be said that the provision in S. 21 is on par with the provision in S. 78(3) of the Bihar and Orissa Excise Act. All that S. 21 provides is that for the purpose of his enquiry, a Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to reach at the same conclusion in respect of the 2002 Act for more than one reason. In this decision, the Court first noted that the Act (NDPS Act) under consideration was a penal statute. In the case of 2002 Act, however, such a view is not possible. The second aspect which we have repeatedly adverted to, is the special purposes and objects behind the enactment of the 2002 Act. As per the provisions of the NDPS Act, it permitted both a regular police officer as well as a designated officer, who is not a defined police officer, to investigate the offence under that Act. This has resulted in discrimination. Such a situation does not emerge from the provisions of the 2002 Act. The 2002 Act, on the other hand, authorises only the authorities referred to in Section 48 to investigate/inquire into the matters under the Act in the manner prescribed therein. The provision inserted in 2005 as Section 45(1A) is not to empower the regular police officers to take cognizance of the offence. On the other hand, it is a provision to declare that the regular police officer is not competent to take cognizance of offence of money-laundering, as it can be investigated only by the authorities referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 173(2) of the 1973 Code, he could still do further investigation by invoking Section 173(8) of the 1973 Code. This, on the face of it, was discriminatory. 169. Notably, this dichotomy does not exist in the 2002 Act for more than one reason. For, there is no role for the regular Police Officer. The investigation is to be done only by the authorities under the 2002 Act and upon culmination of the investigation, to file complaint before the Special Court. Moreover, by virtue of Clause (ii) of Explanation in Section 44(1) of the 2002 Act, it is open to the authorities under this Act to bring any further evidence, oral or documentary, against any accused person involved in respect of offence of money-laundering, for which, a complaint has already been filed by him or against person not named in the complaint and by legal fiction, such further complaint is deemed to be part of the complaint originally filed. Strikingly, in Tofan Singh, Supra at Footnote No.31 (also at Footnote No.24) the Court also noted that, while dealing with the provisions of the NDPS Act, the designated officer has no express power to file a closure report unlike the power bestowed on the police offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under that Act as cognizable by the designated officer as well as the local police, and the scheme of the 2002 Act is entirely different. 171A. Indeed, in the original 2002 Act, as enacted, the offence of money-laundering was made cognizable as a result of which confusion had prevailed in dealing with the said crime when the legislative intent was only to authorise the Authority under the 2002 Act to deal with such cases. That position stood corrected in 2005, as noticed earlier. The fact that the marginal note of Section 45 retains marginal note that offences to be cognizable and non-bailable, however, does not mean that the regular Police Officer is competent to take cognizance of the offence of money-laundering. Whereas, that description has been retained for the limited purpose of understanding that the offence of money-laundering is cognizable and non-bailable and can be inquired into and investigated by the Authority under the 2002 Act alone. 172. In other words, there is stark distinction between the scheme of the NDPS Act dealt with by this Court in Tofan Singh, Supra at Footnote No.31 (also at Footnote No.24) and that in the provisions of the 2002 Act under con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) to whom a summon is issued under section 50 either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce books of account or documents at the place or time, he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure. (3) No order under this section shall be passed by an authority referred to in sub-section (2) unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority. Ins. by Act 2 of 2013, sec.26 (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013), [(4) Notwithstanding anything contained in clause (c) of sub-section (2), a person who intentionally disobeys any direction issued under section 50 shall also be liable to be proceeded against under section 174 of the Indian Penal Code (45 of 1860).] This provision is only an enabling provision and applies to situations referred to therein. It is in the nature of providing consequences for not discharging the burden or cooperating with the authorities duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section Description of offence 120B Criminal conspiracy. 121 Waging or attempting to wage war or abetting waging of war, against the Government of India. 121A Conspiracy to commit offences punishable by section 121 against the State. 255 Counterfeiting Government stamp. 257 Making or selling instrument for counterfeiting Government stamp. 258 Sale of counterfeit Government stamp. 259 Having possession of counterfeit Government stamp. 260 Using as genuine a Government stamp known to be counterfeit. 302 Murder. 304 Punishment for culpable homicide not amounting to murder. 307 Attempt to murder. 308 Attempt to commit culpable homicide. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty mark. 483 Counterfeiting a property mark used by another. 484 Counterfeiting a mark used by a public servant. 485 Making or possession of any instrument for counterfeiting a property mark. 486 Selling goods marked with a counterfeit property mark. 487 Making a false mark upon any receptacle containing goods. 488 Punishment for making use of any such false mark. 489A Counterfeiting currency notes or bank notes. 489B Using as genuine, forged or counterfeit currency notes or bank notes. PARAGRAPH 2 OFFENCES UNDER THE NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES ACT, 1985 (61 of 1985) Section Description of offence 15 Contravention in relation to poppy straw. 16. Contravention in relation to coc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 read with section 15 Punishment for terrorist act. 16A Punishment for making demands of radioactive substances, nuclear devices, etc. 17 Punishment for raising funds for terrorist act. 18 Punishment for conspiracy, etc. 18A Punishment for organising of terrorist camps. 18B Punishment for recruiting of any person or persons for terrorist act. 19 Punishment for harbouring, etc. 20 Punishment for being member of terrorist gang or organisation. 21 Punishment for holding proceeds of terrorism. 38 Offence relating to membership of a terrorist organisation. 39 Offence relating to support given to a terrorist organisation. 40 Offence of raising fund for a terrorist organisation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51 read with section 9 Hunting of wild animals. 51 read with section 17A Contravention of provisions of section 17A relating to prohibition of picking, uprooting, etc., of specified plants. 51 read with section 39 Contravention of provisions of section 39 relating to wild animals, etc., to be Government property. 51 read with section 44 Contravention of provisions of section 44 relating to dealings in trophy and animal articles without licence prohibited. 51 read with section 48 Contravention of provisions of section 48 relating to purchase of animal, etc., by licensee. 51 read with section 49B Contravention of provisions of section 49B relating to prohibition of dealings in trophies, animals articles, etc., derived from scheduled animals. PARAGRAPH 7 OFFENCES UNDER THE IMMORAL TRAFFIC (PREVENTION) ACT, 1956 (104 of 1956) Section Description of offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (15 of 1992) Section Description of offence 12A read with section 24 Prohibition of manipulative and deceptive devices, insider trading and substantial. 24 Acquisition of securities or control. PARAGRAPH 12 OFFENCES UNDER THE CUSTOMS ACT, 1962 (52 of 1962) Section Description of offence 135 Evasion of duty or prohibitions. PARAGRAPH 13 OFFENCES UNDER THE BONDED LABOUR SYSTEM (ABOLITION) ACT, 1976 (19 of 1976) Section Description of offence 16 Punishment for enforcement of bonded labour. 18 Punishment for extracting bonded labour under the bonded labour system. 20 Abetment to be an offence. PARAGRAPH 14 OFFENCES UNDER THE CHILD LABOUR (PROHIBITION AND REGULATION) ACT, 1986 (61 of 1986) Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of infringement of copyright or other rights conferred by this Act. 63A. Enhanced penalty on second and subsequent convictions. 63B. Knowing use of infringing copy of computer programme. 68A. Penalty for contravention of section 52A. PARAGRAPH 21 OFFENCES UNDER THE TRADE MARKS ACT, 1999 (47 of 1999) Section Description of offence 103 Penalty for applying false trade marks, trade descriptions, etc. 104 Penalty for selling goods or providing services to which false trade mark or false trade description is applied. 105 Enhanced penalty on second or subsequent conviction. 107 Penalty for falsely representing a trade mark as registered. 120 Punishment of abetment in India of acts done out of India. PARAGRAPH 22 OFFENCES UNDER THE INFORMATION TECHNOLOGY ACT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mply with the provisions for operating industrial plant. PARAGRAPH 28 OFFENCES UNDER THE SUPPRESSION OF UNLAWFUL ACTS AGAINST SAFETY OF MARITIME NAVIGATION AND FIXED PLATFORMS ON CONTINENTAL SHELF ACT, 2002 (69 of 2002) Section Description of offence 3 Offences against ship, fixed platform, cargo of a ship, maritime navigational facilities, etc.] 36 [PARAGRAPH 29 OFFENCE UNDER THE COMPANIES ACT, 2013 (18 of 2013) Section Description of offence 447 Punishment for fraud.] 37 [PART B OFFENCE UNDER THE CUSTOMS ACT, 1962 Section Description of offence 132 False declaration, false documents, etc.] 38 [PART C An offence which is the offence of cross border implications and is specified in,- (1) Part A; or Omitted by Act 2 of 2013, sec. 30(iii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013). [***] (3) the offences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminal activity which has been regarded as non-cognizable, compoundable or minor offence under the concerned legislation, should have no bearing to answer the matter in issue. In that, the offence of money-laundering is an independent offence and the persons involved in the commission of such offence are grouped together as offenders under this Act. There is no reason to make distinction between them insofar as the offence of money-laundering is concerned. In our opinion, therefore, there is no merit in the argument under consideration. ECIR VIS- -VIS FIR 176. As per the procedure prescribed by the 1973 Code, the officer in-charge of a police station is under an obligation to record the information relating to the commission of a cognizable offence, in terms of Section 154 of the 1973 Code, Lalita Kumari (supra at Footnote Nos.13 and 206). There is no corresponding provision in the 2002 Act requiring registration of offence of money-laundering. As noticed earlier, the mechanism for proceeding against the property being proceeds of crime predicated in the 2002 Act is a sui generis procedure. No comparison can be drawn between the mechanism regarding prevention, investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding prevention of money-laundering, attachment of proceeds of crime and inquiry/investigation of offence of money-laundering upto filing of the complaint in respect of offence under Section 3 of the 2002 Act is fully governed by the provisions of the 2002 Act itself. To wit, regarding survey, searches, seizures, issuing summons, recording of statements of concerned persons and calling upon production of documents, inquiry/investigation, arrest of persons involved in the offence of money-laundering including bail and attachment, confiscation and vesting of property being proceeds of crime. Indeed, after arrest, the manner of dealing with such offender involved in offence of money-laundering would then be governed by the provisions of the 1973 Code - as there are no inconsistent provisions in the 2002 Act in regard to production of the arrested person before the jurisdictional Magistrate within twenty-four hours and also filing of the complaint before the Special Court within the statutory period prescribed in the 1973 Code for filing of police report, if not released on bail before expiry thereof. 177. Suffice it to observe that being a special legislation providing for specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntain details of the material in possession of the Authority and recording satisfaction of reason to believe that the person is guilty of money-laundering offence, if revealed before the inquiry/investigation required to proceed against the property being proceeds of crime including to the person involved in the process or activity connected therewith, may have deleterious impact on the final outcome of the inquiry/investigation. So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution. Moreover, the arrested person before being produced before the Special Court within twenty-four hours or for that purposes of remand on each occasion, the Court is free to look into the relevant records made available by the Authority about the involvement of the arrested person in the offence of money-laundering. In any case, upon filing of the complaint before the statutory period provided in 1973 Code, after arrest, the person would get all relevant materials forming part of the complaint filed by the Authority under Section 44(1)(b) of the 2002 Act before the Special Court. 179. Viewed thus, supply of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnish copy of ECIR, grievance is also made about the opacity surrounding the usage of ED Manual. Relying on Section 4(b)(v) of the RTI Act, it was urged that it was obligatory on the part of the Public Authority to publish the stated Manual within 120 days of the enactment of RTI Act. All other authorities including the Central Vigilance Commission, Income-tax Authorities, Authorities under 1962 Act, Police Authorities, Jail Authorities have adhered to this statutory compliance, except the ED. In response, it is submitted by the learned Additional Solicitor General that ED Manual is an internal departmental document only for the use of officers of the ED. It is to give them guidance on proper enforcement of 2002 Act and outlines the procedure for implementation of the provisions of this Act. In addition, reliance is placed on the exposition of the Constitution Bench of this Court in Lalita Kumari, Supra at Footnote No.206 (also at Footnote No.13). In paragraph 89 of this decision, the Court observed thus: 89. Besides, the learned Senior Counsel relied on the special procedures prescribed under the CBI Manual to be read into Section 154. It is true that the concept of prelimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used on account of provisional attachment order and, in some cases, taking over possession of the property so attached. This grievance, even though genuine, cannot be the basis to test the validity of the provisions of the 2002 Act or to question the efficacy of those provisions on that account. The Parliament by this special legislation having created an expert body being Appellate Tribunal to deal with matters concerning attachment, possession and confiscation and vesting of property in the Central Government, it is, but necessary, that the forum should be functional and accessible to the aggrieved persons uninterruptedly. We need to impress upon the Executive to take necessary corrective measures in this regard. Absent such forum, the aggrieved persons have to rush to the High Court on every occasion which indeed is avoidable. PUNISHMENT UNDER SECTION 4 OF THE 2002 ACT 183. It is urged that there is no gradation of punishment depending on the nature of offence which may be committed by the principal offender and other offenders. Section 4 39 of the 2002 Act makes no distinction between person directly involved in the process or activity connected with the proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given liberty to pursue their other remedies before appropriate forum. Furthermore, we have delinked the matters pertaining to other legislations and issues arising therefrom from this batch of cases, for being proceeded appropriately. CONCLUSION 187. In light of the above analysis, we now proceed to summarise our conclusion on seminal points in issue in the following terms: - (i) The question as to whether some of the amendments to the Prevention of Money-laundering Act, 2002 could not have been enacted by the Parliament by way of a Finance Act has not been examined in this judgment. The same is left open for being examined along with or after the decision of the Larger Bench (seven Judges) of this Court in the case of Rojer Mathew, Supra at Footnote No.90. (ii) The expression proceedings occurring in Clause (na) of Section 2(1) of the 2002 Act is contextual and is required to be given expansive meaning to include inquiry procedure followed by the Authorities of ED, the Adjudicating Authority, and the Special Court. (iii) The expression investigation in Clause (na) of Section 2(1) of the 2002 Act does not limit itself to the matter of investigation con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him. (vi) Section 5 of the 2002 Act is constitutionally valid. It provides for a balancing arrangement to secure the interests of the person as also ensures that the proceeds of crime remain available to be dealt with in the manner provided by the 2002 Act. The procedural safeguards as delineated by us hereinabove are effective measures to protect the interests of person concerned. (vii) The challenge to the validity of sub-section (4) of Section 8 of the 2002 Act is also rejected subject to Section 8 being invoked and operated in accordance with the meaning assigned to it hereinabove. (viii) The challenge to deletion of proviso to sub-section (1) of Section 17 of the 2002 Act stands rejected. There are stringent safeguards provided in Section 17 and Rules framed thereunder. Moreover, the pre-condition in the proviso to Rule 3(2) of the 2005 Rules cannot be read into Section 17 after its amendment. The Central Government may take necessary corrective steps to obviate confusion caused in that regard. (ix) The ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of proceedings, including those under Section 438 of the 1973 Code or even upon invoking the jurisdiction of Constitutional Courts, the underlying principles and rigours of Section 45 may apply. (xiv) The beneficial provision of Section 436A of the 1973 Code could be invoked by the accused arrested for offence punishable under the 2002 Act. (xv) (a) The process envisaged by Section 50 of the 2002 Act is in the nature of an inquiry against the proceeds of crime and is not investigation in strict sense of the term for initiating prosecution; and the Authorities under the 2002 Act (referred to in Section 48), are not police officers as such. (b) The statements recorded by the Authorities under the 2002 Act are not hit by Article 20(3) or Article 21 of the Constitution of India. (xvi) Section 63 of the 2002 Act providing for punishment regarding false information or failure to give information does not suffer from any vice of arbitrariness. (xvii) The inclusion or exclusion of any particular offence in the Schedule to the 2002 Act is a matter of legislative policy; and the nature or class of any predicate offence has no bearing on the validity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned provision(s) already dealt with in this judgment. T.C. (Crl.) Nos.3/2018 and 4/2018 2. In these transferred cases, the parties are relegated before the High Court by restoring the concerned writ petition(s) to the file of the concerned High Court to its original number limited to consider relief of discharge/bail/quashing, as the case may be, on its own merits and in accordance with law. It would be open to the parties to pursue all (other) contentions in those proceedings, except the question of validity and interpretation of the concerned provision(s) already dealt with in this judgment. The transferred cases are disposed of accordingly. W.P. (Crl.) Nos. 169/2020, 370/2021, 454/2021 and 475/2021 3. (a) These writ petitions involve issues relating to Finance Bill/Money Bill. Hence, the same are delinked, to be heard along with Civil Appeal No.8588 of 2019 titled Rojer Mathew vs. South Indian Bank Ltd. Ors. . W.P. (Crl.) Nos. 251/2018 and 532/2021 (b) In these writ petitions, as the relief claimed was only regarding the validity and interpretation of the provisions of the 2002 Act, the same are disposed of in terms of this judgment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020, 240/2020 and 329/2020 WP (C) Nos. 1401/2020 and 56/2021 SLP (Crl.) Nos. 1534/2018, 2971/2018, 7408/2018, 11049/2018, 11839/2019, 1732/2020, 2023/2020 and 6303/2020; These matters relate to the Companies Act, 2013, WP (Crl.) Nos. 119/2019, 239/2019, 263/2019, 36/2020, 124/2020, 137/2020, 140/2020, 142/2020, 145/2020, 228/2020, 69/2021, 359/2021 and 520/2021 SLP (Crl.) Nos. 1114/2018, 1115/2018, 618/2020, 2814/2020, 6456/2020, 6660/2020, 6338/2021 and 6847/2021; These matters relate to Central Goods and Services Tax Act, 2017, WP (Crl.) Nos. 118/2019, 267/2019, 286/2019, 287/2019, 303/2019, 305/2019, 309/2019, 313/2019, 28/2020, 61/2020, 89/2020, 90/2020, 93/2020, 184/2020, 221/2020, 223/2020, 285/2020, 286/2020, 410/2020, 411/2020, 04/2021, 06/2021, 33/2021, 40/2021, 47/2021, 144/2021 and 301/2021 SLP (Crl.) Nos. 244/2019, 3647/2019, 4322-24/2019, 4546/2019, 5153/2019, 9541/2019, 647/2020, 3366/2020, 5536/2020, 1031/2021, 1072/2021, 1073/2021, 1107/2021, 2050-54/2021 and 6834/2019 SLP (C) No. 20310/2021 Diary No. 31616/2021; These matters relate to Indian Penal Code, 1860, Prevention of Corruption Act, 1988, Informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sembly on 23.02.1990; and Resolution passed at the UN Special Session on countering World Drug Problem Together 8th to 10th June 1998. 5. 469. Commencement of the period of limitation.-(1) The period of limitation, in relation to an offender, shall commence,- (a) on the date of the offence; or (b) where the commission of the offence was not known to the person aggrieved by the offence or to any police officer, the first day on which such offence comes to the knowledge of such person or to any police officer, whichever is earlier; or (c) where it is not known by whom the offence was committed, the first day on which the identity of the offender is known to the person aggrieved by the offence or to the police officer making investigation into the offence, whichever is earlier. (2) In computing the said period, the day from which such period is to be computed shall be excluded. 6. 472. Continuing offence.-In the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues. 7. 2. Definitions.-(1) In this Act, unless the context otherwise requires,- .. (fa) be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduled offence; and (c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and fifty days from the date of the order, in the manner provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or the other office so authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that Schedule: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be: Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard 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 order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of Section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation.-For the purposes of this sub-section, person interested , in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. 14. (1) Bombay High Court in Radha Mohan Lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Additional Secretary to the Government of India or equivalent being head of the office or Ministry or Department or Unit, as the case may be, or any other officer who may be authorised by the Central Government, by notification, for this purpose 18. Subs. by Act 2 of 2013, sec. 14(iv), for sub-section (14) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8.2.2013). Sub-section (14), before substitution, stood as under: (4) The authority, seizing any record or property under this section shall, within a period of thirty days from such seizure, file an application, requesting for retention of such record or property, before the Adjudicating Authority. 19. 71. Act to have overriding effect.-The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. 20. 65. Code of Criminal Procedure, 1973 to apply.-The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, insofar as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation investigation, prosecution and all other proceedings under this Act. 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph 5 of Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or (b) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985). 25. 106. Burden of proving fact especially within knowledge. When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. 26. (i) Section 57A of the (Kerala) Abkari Act, I of 1077; (ii) Sections 105, 106, 113A and 113B of the Indian Evidence Act, 1872; (iii) Section 139 of the Negotiable Instruments Act, 1881; (iv) Section 9 of the Opium Act, 1878; (v) Section 9B of the Explosives Act 1884; (vi) Section 7 of the Prevention of Food Adulteration Act, 1954; (vii) Section 10C of the Essential Commodities Act, 1955; (viii) Section 138A of the Customs Act, 1962; (ix) Section 43E of the Unlawful Activities (Prevention) Act, 1967; (x) Section 98-B of the Gold (Control) Act, 1968; (xi) Section 57 of the Wild L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh Gangsters and Anti-Social Activities (Prevention) Act, 1986; Section 21 of the Maharashtra Control of Organised Crime Act, 1999; Section 22 of the Karnataka Control of Organized Crime Act, 2000; Section 21 of the Telangana Control of Organized Crime Act, 2001 (renamed from Andhra Pradesh COCA, 2001); Section 18 of the Sikkim Anti-Drugs Act, 2006; Section 20 of the Gujrat Control of Terrorism and Organised Crime Act, 2015; Section 19 of the Mizoram Drug (Controlled Substances) Act, 2016; and Section 18 of the Haryana Control of Organised Crime Act, 2020. 31. 20. Modified application of certain provisions of the Code .- (1) .. . (3) Section 164 of the Code shall apply in relation to a case involving an offence punishable under this Act or any rule made thereunder, subject to the modification that the reference in sub-section (1) thereof to Metropolitan Magistrate or Judicial Magistrate shall be construed as a reference to Metropolitan Magistrate , Judicial Magistrate, Executive Magistrate or Special Executive Magistrate . 32. 20. Modified application of certain provisions of the Code .- (1) .. .. (4) Section 167 of the Code shall apply in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: PARAGRAPH 8 OFFENCES UNDER THE PREVENTION OF CORRUPTION ACT, 1988 (49 OF 1988) Section Description of offence 7 Public servant taking gratification other than legal remuneration in respect of an official act. 8 Taking gratification in order, by corrupt or illegal means, to influence public servant. 9 Taking gratification for exercise of personal influence with public servant. 10 Abetment by public servant of offences defined in section 8 or section 9 of the Prevention of Corruption Act, 1988. 13 Criminal misconduct by a public servant. . 36. Ins. by Act 13 of 2018, sec. 208(h) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April, 2018). 37. Ins. by the Finance Act, 2015 (20 of 2015), sec. 151 (w.e.f. 14-5-2015). Earlier Part B was amended by Act 21 of 2009, sec. 13 (w.e.f. 1-6-2009) and was omitted by Act 2 of 2013, sec. 30(ii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013). ..... 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