Court affirms Enforcement Directorate's authority under PMLA, deems offenses cognizable.

The court upheld the Enforcement Directorate's jurisdiction to investigate offenses under the Prevention of Money Laundering Act (PMLA), ruling them as cognizable and non-bailable. It found the ED's investigation compliant with procedural safeguards, validated the issued summons, and mandated videography during interrogation as per an earlier undertaking. The petitions challenging ED's authority, the nature of PMLA offenses, procedural compliance, and legality of summons were dismissed.

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Issues Involved:

1. Jurisdiction and authority of the Enforcement Directorate (ED) to investigate under the Prevention of Money Laundering Act, 2002 (PMLA).
2. Nature of the offences under PMLA - whether cognizable or non-cognizable.
3. Compliance with procedural safeguards during investigation.
4. The legality of the summons issued to the petitioners.
5. The necessity for videography during interrogation.

Detailed Analysis:

Jurisdiction and Authority of the Enforcement Directorate (ED):

The petitioners challenged the authority of the ED to investigate the matter under ECIR No.CDZO/05 dated 25/03/2013, arguing that the offences under PMLA are non-cognizable and require prior sanction/order of a Magistrate for investigation. The court noted that the PMLA is a special statute with provisions for investigation by authorized officers of the ED. Section 45(1A) of the PMLA explicitly bars police officers from investigating offences under the Act unless specifically authorized by the Central Government. Therefore, the ED has the jurisdiction to investigate the offences under the PMLA.

Nature of the Offences Under PMLA - Cognizable or Non-Cognizable:

The petitioners argued that the offences under PMLA are non-cognizable and bailable due to amendments made in 2005. However, the court held that the offences under Section 3 of the PMLA, punishable with imprisonment for more than three years, are cognizable and non-bailable. The court referred to the First Schedule of the Cr.P.C., which classifies offences punishable with imprisonment for more than three years as cognizable. Thus, the ED has the authority to investigate and arrest without a warrant.

Compliance with Procedural Safeguards During Investigation:

The petitioners contended that the ED's investigation violated procedural safeguards prescribed under the Cr.P.C., including maintaining case diaries and obtaining necessary permissions. The court observed that the PMLA provides a detailed procedure for investigation, including the power of arrest under Section 19, which requires reasons to be recorded in writing and forwarded to the adjudicating authority. The court emphasized that the PMLA has an overriding effect over the Cr.P.C. as per Section 71 of the PMLA, and the provisions of the Cr.P.C. apply only insofar as they are not inconsistent with the PMLA.

The Legality of the Summons Issued to the Petitioners:

The court examined the summons issued under Section 50(2) and (3) of the PMLA and found them to be in compliance with the prescribed format (Form V) under the Prevention of Money-Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention) Rules, 2005. The court noted that the petitioners had not challenged the vires of the Act or the rules, and therefore, the summons were valid.

The Necessity for Videography During Interrogation:

The petitioners requested videography of their interrogation and the presence of their advocate during the recording of statements. The court referred to an undertaking given by the respondent's counsel on 19.03.2015, agreeing to videograph the interrogation. The court held that this undertaking should be complied with, ensuring that the interrogation is videographed as and when the investigation/interrogation of the persons summoned is under way.

Conclusion:

The court dismissed the petitions, holding that the ED has the jurisdiction to investigate the offences under the PMLA, which are cognizable and non-bailable. The investigation by the ED was found to be in compliance with the procedural safeguards prescribed under the PMLA. The summons issued to the petitioners were held to be valid, and the court directed the respondents to comply with the undertaking to videograph the interrogation.

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