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Issues: (i) Whether the statement recorded by the Enforcement Directorate was hit by Section 25 of the Indian Evidence Act, 1872 or Articles 20 and 22 of the Constitution of India and, if retracted, could still be relied upon; (ii) Whether the complaint under the Prevention of Money Laundering Act, 2002 was liable to be quashed for want of prima facie material.
Issue (i): Whether the statement recorded by the Enforcement Directorate was hit by Section 25 of the Indian Evidence Act, 1872 or Articles 20 and 22 of the Constitution of India and, if retracted, could still be relied upon.
Analysis: The statement was recorded when the accused was in judicial custody in the police case and not as a formally accused person in the ED proceeding. The Enforcement Directorate is not a police officer for the purpose of Section 25 of the Evidence Act. On those facts, the recording of the statement was treated as part of the inquiry under the Prevention of Money Laundering Act, 2002 and not as a barred confession. The later retraction did not erase its evidentiary relevance, particularly when the statement itself implicated the accused in the acquisition of the cash through unlawful lottery dealings.
Conclusion: The statement was not excluded under Section 25 of the Indian Evidence Act, 1872 or Articles 20 and 22 of the Constitution of India, and its retraction did not render it unusable.
Issue (ii): Whether the complaint under the Prevention of Money Laundering Act, 2002 was liable to be quashed for want of prima facie material.
Analysis: The complaint was supported by the accused's own statement, the seizure of a large cash amount, and the factual foundation showing that the money was said to have been generated through printing and selling lottery tickets in a State where such sale was prohibited. The Court held that the existence of a final police report was not essential at the quashing stage and that the absence of more cited witnesses did not justify quashing, since the trial court could invoke its power to summon additional witnesses. The subsequent fabrication of a sale agreement also did not displace the earlier material connecting the cash with the alleged illegal activity.
Conclusion: The complaint disclosed prima facie material and was not liable to be quashed.
Final Conclusion: The quash petition failed, and the trial was permitted to proceed uninfluenced by the observations made for the purpose of deciding the petition.
Ratio Decidendi: A statement recorded by the Enforcement Directorate during inquiry, before formal accusation as an accused in the ED proceeding, is not automatically barred by Section 25 of the Evidence Act or Articles 20 and 22 of the Constitution, and a complaint under the Prevention of Money Laundering Act, 2002 cannot be quashed where the record discloses prima facie material connecting the cash with the alleged scheduled offence and proceeds of crime.
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