PMLA's special arrest and investigation scheme prevails, but recorded reasons and liberty safeguards must still be followed.
The Prevention of Money Laundering Act, 2002 operates as a special statutory scheme with its own investigation, summons, evidence, attachment, arrest, complaint and trial framework, so inconsistent provisions of the Code of Criminal Procedure, 1973 yield. Arrest under Section 19 does not require a warrant or prior resort to Chapter XII of the Code, but authorised officers must still record reasons and rely on material giving rise to a belief of guilt. Article 20(3) was held not to apply merely at the summons and investigation stage under Section 50; it arises only once a person is actually accused before the Special Court. The liberty-protective principles underlying Sections 41 and 41A were treated as applicable in substance.
Issues: (i) Whether the scheme of the Prevention of Money Laundering Act, 2002 excludes application of the Code of Criminal Procedure, 1973 to investigation and arrest, and whether arrest under Section 19 requires a warrant or prior resort to police procedure; (ii) Whether Article 20(3) of the Constitution of India is attracted at the stage of summons and investigation under Section 50 of the Act; (iii) Whether the safeguards in Sections 41 and 41A of the Code of Criminal Procedure, 1973 apply to arrest under Section 19 of the Act.
Issue (i): Whether the scheme of the Prevention of Money Laundering Act, 2002 excludes application of the Code of Criminal Procedure, 1973 to investigation and arrest, and whether arrest under Section 19 requires a warrant or prior resort to police procedure.
Analysis: The Act was treated as a special statute with its own complete mechanism for investigation, summons, evidence collection, attachment, arrest, complaint and trial. The authorised officers under the Act were held not to be police officers, and the absence of a police report mechanism did not render the statutory investigation ineffective. The Court held that the deletion of the earlier cognizable-offence clause did not curtail the authorities' power to investigate or arrest under the Act, and that the Code yields where inconsistent with the statutory scheme.
Conclusion: The special statutory scheme governs, and arrest under Section 19 does not depend on a warrant or on Chapter XII of the Code.
Issue (ii): Whether Article 20(3) of the Constitution of India is attracted at the stage of summons and investigation under Section 50 of the Act.
Analysis: A person summoned under Section 50 is only being called to give evidence or produce records in the course of investigation. The protection against self-incrimination was held to arise only when the person is actually accused in a complaint before the Special Court. Until that stage is reached, the summoned person cannot claim violation of Article 20(3) merely because the investigation may later culminate in an accusation.
Conclusion: Article 20(3) was held not to be attracted at the investigation stage in the facts presented.
Issue (iii): Whether the safeguards in Sections 41 and 41A of the Code of Criminal Procedure, 1973 apply to arrest under Section 19 of the Act.
Analysis: The Court held that although Section 19 arrest is made by authorised officers and not by police officers, the liberty-protecting principles underlying Sections 41 and 41A are not inconsistent with the Act. The power of arrest under Section 19 was held to be discretionary and conditional upon recorded reasons and material giving rise to a belief that the person is guilty. Those safeguards were directed to be followed in substance while exercising arrest power under the Act.
Conclusion: The principles underlying Sections 41 and 41A were held applicable to arrest under Section 19.
Final Conclusion: The application for restraint was declined, and the Court upheld the investigatory and arrest framework under the Act while directing compliance with the statutory safeguards and the corresponding liberty-protective principles of the Code.
Ratio Decidendi: In proceedings under the Prevention of Money Laundering Act, 2002, the special statutory mechanism overrides inconsistent procedural provisions of the Code of Criminal Procedure, 1973, but arrest by authorised officers must still satisfy recorded reasons and liberty-protecting safeguards analogous to Sections 41 and 41A of the Code.
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