PMLA summons and witness-to-accused shift upheld where later material showed prima facie involvement in money-laundering.
Section 50 of the Prevention of Money Laundering Act authorises summons, truthful statements, and production of records during investigation, and its use is not barred merely because a person was earlier shown as a witness in a related complaint. The constitutional challenge based on Articles 20(3) and 21 and the Evidence Act was rejected because testimonial compulsion arises only where an accused is compelled to incriminate himself. The Court also held that money-laundering proceedings are distinct from the scheduled offence proceedings, and that subsequent material such as communications, records, and statements may justify proceeding against a witness as an accused if prima facie involvement emerges. The investigative steps, including summoning, arrest, and change of status, were upheld.
Issues: (i) Whether Section 50(2) of the Prevention of Money Laundering Act, 2002 was unconstitutional or inapplicable to persons earlier shown as witnesses in the complaint. (ii) Whether the petitioners' summoning, arrest, and later change of status from witness to accused in the money-laundering investigation were illegal.
Issue (i): Whether Section 50(2) of the Prevention of Money Laundering Act, 2002 was unconstitutional or inapplicable to persons earlier shown as witnesses in the complaint.
Analysis: Section 50 empowers the authorised officers to summon any person during investigation or proceedings under the Act and to require truthful statements and production of records. The challenge based on Articles 20(3) and 21 and Section 132 of the Evidence Act was rejected in light of the binding interpretation that testimonial compulsion arises only when a person is an accused and is compelled to incriminate himself. A person summoned during investigation is not protected merely because he was earlier cited as a witness in a related complaint. The Court also noted that money-laundering proceedings are distinct from the scheduled offence proceedings.
Conclusion: Section 50(2) was upheld in its application to the petitioners, and the constitutional challenge failed.
Issue (ii): Whether the petitioners' summoning, arrest, and later change of status from witness to accused in the money-laundering investigation were illegal.
Analysis: The material collected during investigation, including BBM messages, records, and the petitioners' own statements, indicated involvement in transactions connected with proceeds of crime. The Court held that a person who may initially be treated as a witness in one set of proceedings can later be proceeded against as an accused under PMLA if subsequent investigation reveals prima facie involvement in the offence of money-laundering. It was further held that continuing investigation may uncover new facts and that the authorities were justified in issuing summons to trace the money trail.
Conclusion: The summoning, arrest, and change of status from witness to accused were held to be lawful.
Final Conclusion: The petitions were found to be devoid of merit, and the impugned investigative steps under PMLA were upheld.
Ratio Decidendi: Section 50 of the PMLA authorises summons and recording of statements during investigation or proceedings, and a person initially cited as a witness may still be proceeded against as an accused if subsequent material shows prima facie involvement in money-laundering.
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