TaxTMI 
TaxTMI 
2016 (6) TMI 309
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.... to him the allegations would construe offences mainly under Section 132 of the Customs Act, 1962, which is a Scheduled Offence specified in Part B of the Schedule to Prevention of Money- Laundering Act (for short PMLA). He further contends that laundering of the proceeds of crime relating to this Scheduled Offence would attract offence under Section 3 of PMLA, which would be punishable under Section 4 thereof. 2. The instant petition challenges the vires of firstly Section 2(y)(ii) of PMLA as amended vide section 145( (ii) of the Finance Act, 2015 enhancing the monetary threshold for the offences specified under Part B of the Schedule from the total value involved in such offences from "Rs. 30 lakhs or more" to "Rs. One crore or more", and secondly the insertion of Section 132 of Customs Act, 1962 in Part-B of the Schedule in PMLA, vide section 151 of the said Finance Act, 2015. These impugned amendments, which are applicable with effect from 14.05.2015, are claimed by him as unconstitutional and ultra vires, unless read down so as to make them constitutional, stringent and harmonious with the objects of PMLA. According to him presently these impugned provisions are contrary to....
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.... criminal offences and prosecuting the accused for commission of these offences. However, according to him he would not be permitted to set the criminal law into motion by approaching the jurisdictional Magistrate as prescribed in the Code of Criminal Procedure, because the Customs Act, 1962 as well as PMLA are considered as complete Code in themselves and the provisions of Code such as Section 156(3) or Section 155(2) of the Code of Criminal Procedure may not have any application in the field occupied by these special statutes. 5. He has referred to a judgment by the Division Bench of this Court in the matter of Sunil Gupta vs. Union of India reported in 2000 (118) ELT 8 (P&H). As per the said judgment notwithstanding Section 155 of the Code, in exercise of powers under Section 13 of Central Excise Act, 1944, a Central Excise officer can arrest a person without a warrant, despite the offence being a non-cognizable offence. It was held that a Central Excise Officer cannot be equated with a 'police officer' for the purpose of section 155 of the Code for investigating a non-cognizable offence punishable under Central Excise Act, 1944. He has also placed on record a copy of....
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.... Act,1962, pending grant of requisite sanction under Section 137(1) of Customs Act, 1962 for launching prosecution and filing of complaint by appropriate authority under second proviso to section 45(1) of the PMLA, both of which otherwise stipulate a bar on taking of 'cognizance'. He relied upon the judgment of Hon'ble Supreme Court in Narayandas Bhagwandas Madhavdas vs. State of West Bengal, 1999 (110) ELT 85 (SC) to buttress his argument that Courts do not take 'cognizance' while ordering investigations either under Section 156(3) or Section 155(2) of the Code. 8. A compilation of judgments has been submitted by the petitioner in support of his submissions. The following prayers are made by him in the instant petition :- i) Issue appropriate writ, order or direction in the Petitioner's challenge to the vires qua criminal cases, of firstly the sub-clause (ii) of clause (y) of section 2 of PMLA, and secondly, the insertion of Part-B in the Schedule in PMLA, as amended vide section 145(ii) and section 151 of the Finance Act, 2015, with effect from 14.05.2015, for declaring these provisions of PMLA as unconstitutional and ultra vires as the same ar....
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.... contained in Clause 33 of the Prevention of Money-Laundering (Amendment) Bill, 2011 whereby for the then existing Part A, a new Part A was proposed to be substituted, while omitting paragraphs 1 to 25 in the then existing Part B. Consequently, all those offences which were earlier under these paragraphs 1 to 25 of Part B and all heinous offences which were under the then existing Part A, were proposed to be put together in the new proposed Part A. 12.3 For deciding the issues raised by him, we have perused the Objects and Reasons, Preamble of PMLA, various definitions and provisions as well as Rules framed under PMLA. (i) Section 4 of PMLA- "4. Punishment for money-laundering-Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extent to seven years and shall also be liable to fine. Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words "which may extent to seven years", the words "whi....
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....oney-Laundering (Amendment) Bill, 2011, which was carried out in 2013. Under the then existing Part A of the Schedule, before it's substitution, the following scheduled offences were listed- PART A PARAGRAPH 1 OFFENCES UNDER THE INDIAN PENAL CODE Section Description of offence 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. 489A Counterfeiting currency notes or bank notes. 489-B Using as genuine, forged or counterfeit currency notes or bank notes. PARAGRAPH 2 OFFENCES UNDER THE NARCOTIC DRUGS AND PHYSHOTROPIC SUBSTANCES ACT, 1985. Section Description of offence 15 Contravention in relation to poppy straw. 16 Contravention in relation to coca plant and coca leaves. 17 Contravention in relation to prepared opium. 18 Contravention in relation to opium poppy and opium. 19 Embezzlement of opium by cultivator. 20 Contravention in relation to cannabis plant and cannabis 21. Contravention in relation to manufactured dr....
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....nvironment Protection Act, Passport Act, etc were listed, which are much less in gravity and magnitude as compared to the aforesaid Part A offences. These offences under Part B included even those which were compoundable and / or bailable. 12.7 It is thus beyond any doubt that there existed an intelligible differentia in the classification which distinguished the offenders thus grouped together in Part A from those left out of that group and grouped together in Part B. The said classification therefore was reasonable for the purpose of Section 45(1) of the PMLA. This observation is supported by the following observations of a Constitution Bench of Hon'ble Supreme Court in Asgarali Nazarali Singaporewalia vs. State of Bombay, AIR 1957 SC 503- "16. The first question which we have to address to ourselves is whether there is in the impugned Act a reasonable classification for the purposes of legislation. If we look to the provisions of the impugned Act closely it would appear that the legislature classified the offences punishable under section 161, 165 or 165-A of the Indian Penal Code or sub-section (2) of Section 5 of the Prevention of Corruption Act, 1947 in one gr....
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....s. As per Section 45 (2), this limitation on granting of bail is in addition to the limitations under the Code or any other law for the time being in force. In view of Section 71 of PMLA, the said limitations under section 45(1) has overriding effect on the general provisions of bail under the Code of Criminal Procedure under Sections 438 and 439. These limitations were not applicable in relation to any persons accused of any offence under Part B of the schedule. The legislative intent was that the persons who committed any scheduled offence under Part A would form a class by themselves quite distinct from those offenders who could be dealt with by the normal provisions for bail contained in the Code, and if the offenders falling within this group or category were thus singled out for special treatment by imposing stringent twin conditions contained in section 45(1), there would be no question of any discriminatory treatment being meted out to them as compared with other offenders accused of offences under Part B who did not fall within the same group or category i.e. Part A and who continued to be treated under the normal procedure. Thus, the intelligible differentia in such class....
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....ntia in the classification which distinguished the offenders thus grouped together in Part A from those left out of that group and grouped together in Part B for the purpose of applicability of twin conditions in grant of bail under Section 45(1) of the PMLA. 12.11 So far as the effect of the omission in Section 45(1) of words "every offence punishable under this Act shall be cognizable" is concerned, we do not find it necessary to go into that issue at this stage. 12.12. The judgment of the Hon'ble Supreme Court in Union of India vs. Hassan Ali Khan, (2011) 10 SCC 235, on which reliance is placed by the petitioner, was for cancellation of bail granted by the Hon'ble Bombay High Court in a case under PMLA in the circumstances peculiar to that case and the Hon'ble Supreme Court found it appropriate to treat the said case a little differently from other cases of similar nature by observing as under- "34. Having carefully considered the submissions made on behalf of the respective parties and the enormous amounts of money which Respondent 1 had been handling through his various bank accounts and the contents of the note signed by Respondent 1 and notarised i....
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....ncorporated in Para 3(j) in the Prevention of Money- Laundering (Amendment) Bill, 2011, the only object for the amendment carried out in 2013 in the Schedule to PMLA was to overcome this monetary threshold limit of Rs. 30 Lakhs so that for invocation of PMLA in respect of the laundering of proceeds of crime involved in offences earlier listed under Part B of the Schedule, there is no embargo of minimum value of Rs. 30 Lacs. 12.16 In our opinion the presumption of the petitioner that rigors in grant of Bail contained in Section 45(1) of PMLA extends to all the offences mentioned in such amended Part A is neither logical nor intended by the legislation. The offences which were in the earlier Part A of the Schedule (prior to 2013 Amendment) are evidently henious offences such as waging war against the country, offences under NDPS Act and Terrorist activities etc. Other scheduled offences, which prior to 2013 amendment were under Part B of the Schedule, cannot be equated with such heinous offences in the context of Section 45(1) of PMLA. 12.17 Despite the above substantive amendment in the Schedule, we find no corresponding amendment simultaneously carried out in 2013, in Section....
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.... even such Scheduled Offences which were earlier listed in Part B. 12.18. Therefore, in our opinion the reference to the offences under Part A of the Schedule in the context of Section 45 (1) requires to read down to apply only to those scheduled offences, which existed under the Part A of the Schedule prior to the said 2013 amendment in Schedule. Having arrived at the said opinion, we have also given our anxious consideration to the issue whether we can simply fold our hands and blame the draftsman, or whether we are duty bound to work on the constructive task of finding the intention of Parliament and to iron out the creases to harmonise the law with the prevailing objects sought to be achieved, reasons and concepts and to make it an effective instrument for delivery of justice eschewing the construction which will lead to absurdity. The Hon'ble Constitution Bench in S.P. Gupta v. Union of India, 1981 Supp SCC 87 had observed as follows : "63.............The interpretation of every statutory provision must keep pace with changing concepts and values and it must, to the extent to which its language permits or rather does not prohibit, suffer adjustments through jud....
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....xtension of the same when the provisions of those Acts are narrowly and literally interpreted. Though the function of the Courts is only to expound the law and not to legislate, nonetheless the legislature cannot be asked to sit to resolve the difficulties in the implementation of its intention and the spirit of the law. In such circumstances, it is the duty of the court to mould or creatively interpret the legislation by liberally interpreting the statue. 25. In Maxwell on interpretation of Statutes, Tenth Edn. at page 229, the following passage is found : "Where the language of a statute, in its ordinary meaning and grammatical construction, lead to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence. .....Where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used." ....
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....tion from the words of the Constitution or the Act, as the case may be......" and eschew the construction which will lead to absurdity and give rise to practical inconvenience or make the provisions of the existing law nugatory. A.P. Sen, J. in Organo Chemical Industries v. Union of India has stated thus: (SCR p. 586, para 23) "A bare mechanical interpretation of the words 'devoid of concept or purpose' will reduce most of legislation to futility. It is a salutary rule, well established, that the intention of the legislature must be found by reading the 30. Krishna Iyer, J. has pointed out in his inimitable style in Chairman, Board of Mining Examination and Chief Inspector of Mines vs. Ramjee: "To be literal in meaning is to see the skin and miss the soul of the Regulation." 31. True, normally courts should be slow to pronounce the legislature to have been mistaken in its constantly manifested opinion upon a matter resting wholly within its will and take its plain ordinary grammatical meaning of the words of the enactment as affording the best guide, but to winch up the legislative intent,it is permissible for courts to take into account of the....
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....f PMLA after Part-A, Section 132 of the Customs Act, 1962 was inserted in Part- B. The amendment of 2015, increasing the monetary threshold from Rs.Thirty Lakhs to Rs. One Crore for invocation of PMLA, now shows further shift and liberalisation in the earlier legislative intent of removing the monetary threshold for invoking PMLA. If it is construed that the limitation imposed by Section 45(1) on granting bail would apply to the persons arrested on accusation of offences which were earlier listed under Part B, but not to a person arrested on accusation of offence punishable under Section 132 of the Customs Act, 1962 which is now in Part B, the same would be unreasonable and in violation of Article 14 and 21 of the Constitution of India. We findthat the intelligible differentia in classification of offences in Part A and Part B in the context of Section 45(1) was absolutely reasonable prior to the said 2013 amendment in Schedule. However, it would not be so in respect of all those offences later shifted from Part B to Part A, which was for a limited purpose stated in the "Statement of Objects and Reasons" as incorporated in the Prevention of Money-Laundering (Amendment) Bill, 2011. ....
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....n of scheduled offences which were listed under the Part A of the Schedule existing prior to 2013 amendment. In other words, the limitations in grant of bail under Section 45(1) of PMLA are not applicable to those persons who are arrested under PMLA on accusation of commission of such scheduled offences which were earlier listed under Part B of the Schedule (prior to amendment in Schedule carried out in 2013). 12.24. Consequently, the provisions containing twin limitations in grant of bail under Section 45(1) would override the normal principles governing bail under Sections 438 and 439 qua the persons arrested on accusation of commission of such Scheduled Offences which were earlier listed under Part A of the Schedule. However, only the normal principles governing bail under Section 438 or 439 of the Code would apply in relation to a person arrested under PMLA on accusation of commission of such scheduled offences, which were earlier listed under Part B of the Schedule. In respect of such persons of latter category, the following observations of the Hon'ble Constitution Bench in Gurbaksh Singh Sibbia v. State of Punjab, (1980) 2 SCC 565, may apply with full force: ....
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....tention or imprisonment of the accused is to secure his appearance and submission to the jurisdiction and the judgment of the court, the primary inquiry is whether a recognizance or bond would effect that end." 12.25 Consequently, we find that the basis on which vires of the 2015 amendments has been challenged do not have any merit and the first two prayers in this regard are accordingly rejected. 13 The petitioner has also raised another important issue. He intends to file a composite private complaint to seek an order for investigating the alleged schedule offence punishable under the Customs Act, 1962 and also the offence under PMLA. 14 After perusing both the Acts, we do not find any specific provision which completely overrides in this regard the provisions of Sections 200,156(3) and 155(2) of the Code. Both the Acts however create a bar on taking cognizance vide section 137(1) of the Customs Act,1962 and second proviso to Section 45(1) of PMLA. 15.1 The sub-section (4) of Section 104 of Customs Act, 1962 commences with a non-obstante clause-"notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)..............". This sub-section prov....
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....ories. On behalf of the petitioners, it was contended that persons of the Central Excise are vitally different from those under the Railway Property (Unlawful Possession) Act, 1966. It may be so. We do not consider it necessary to go into the different provisions of different Acts. 25. In view of the above, we hold that the contention of the counsel for the petitioners that no arrest can be made without a warrant cannot be accepted. Consequently, it is rejected. 15.3 Sub-sections (4) and (5) of Section 104 of the Customs Act, 1962 were inserted by substitution vide sections 126 of Act 23 of 2012 for the earlier sub-section (4) with effect from 28.05.2012. The sub-section (4) prior to the substitution stood as under - "(4) Notwithstanding anything contained in the Code of Criminal Procedure. 1898 (5 of 1898), any offence under this Act shall not be cognizable." Similarly in the case of the Central Excise Act,1944 in view of Section 9-A, all offences under the said Act were also made noncognizable. The judgment in the case of Sunil Gupta (supra) was rendered prior to the aforesaid amendments carried out to make two categories of offences, namely 'cognizabl....
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....inction on the basis that while Section 13 of the 1944 Act refers to a "person" and not to an "accused" or "accused person", the power under the Central Excise Act is for arrest of any person who is suspected of having committed an offence and is not an accused, but is a person who would become an accused after the filing of a complaint or lodging of an FIR, as was held by this Court in Directorate of Enforcement v. Deepak Mahajan. 30. Mr.Parasaran also urged that the power to arrest must necessarily be vested in the officer concerned under the 1944 Act for the efficient discharge of his functions and duties, inter alia, in order to prevent and tackle the menace of black money and moneylaundering. Mr. Parasaran submitted that in Union of India v. Padam Narain Aggarwal, this Court has held that even though personal liberty is taken away, there are norms and guidelines providing safeguards, so that such a power is not abused, but is exercised on objective facts with regard to commission of any offence. 31. Reference was also made to the decision of the Punjab and Haryana High Court in Sunil Gupta v. Union of India and Bhavin Impex (P) Ltd. v. State of Gujarat, in wh....
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....n regard to the Central Excise Act, 1944, must succeed and are, accordingly, allowed in terms of the determination herein above, and we hold that the offences under the Central Excise Act, 1944, are bailable. 48. The remaining writ petitions which deal with offences under Customs Act, 1962, namely, WP (Cri) No. 74 of 2010, Choith Nanikram Harchandani v. Union of India, which has been heard as the lead case, and WPs (Cri) Nos. 36, 37, 51, 76 and 84 of 2011 and Crl. MP No. 10673 of 2011 in WP (Cri) No. 76 of 2011, all deal with offences under the Customs Act, though the issues are exactly the same as those canvassed in the cases relating to the provisions of the Central Excise Act, 1944. 52. It was further pointed out that as in the case of Section 20 of the Central excise Act, 1944, under subsection (3) of Section 104 of the customs Act, an officer of Customs has been vested with the same power and is subject to the same provisions as an officer in charge of a police station has under the Code of Criminal Procedure, for the purpose of releasing the arrested person on bail or otherwise. Mr. Rohatgi submitted that as in the case of Section 20 of the 1944 Act, the pro....
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.... 2010] and the other connected writ petitions in respect of the Customs Act, 1962. 68. Accordingly, on the same reasoning, the offences under the Customs Act, 1962 must also be held to be bailable and the writ petitioners must, therefore, succeed. The same are, accordingly, allowed..........." 15.5 From a perusal of the above extracts from the said binding precedent of a 3-Judge Bench decision of the Hon'ble Supreme Court, it is clear that the Hon'ble Supreme Court held the question earlier decided in Sunil Gupta (supra) to the contrary, and thus the decision in Sunil Gupta (supra) stands over-ruled by the Hon'ble Supreme Court. Similarly, the decision of the Hon'ble Gujarat High Court in Bhavin Impex Pvt. Ltd. v. State of Gujarat, 2010 (260) E.L.T. 526 (Guj.) which followed the view taken in Sunil Gupta (supra) on the same question of law was also over-ruled in Om Parkash (supra). The relevant extract of Bhavin Impex Pvt. Ltd. (supra) is as follows - "1. The key question that arises for consideration in this writ petition is as to whether the authorities under the Central Excise Act, 1944 (hereinafter referred to as 'the Act') have the ....
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....ti Savant case we are of the view that a Customs Officer, under the Act of 1962, is not a police officer within the meaning of Section 25 of the Evidence Act and the statements made before him by a person who is arrested or against whom an inquiry is made are not covered by Section 25 of the Indian Evidence Act." Therefore, the conclusions of the Constitution Bench of Hon'ble Supreme Court that the Customs Officer is not a police officer are only in the context of Section 25 of the Indian Evidence Act or Article 20(3) of the Constitution of India, and not for the purpose of excluding applicability of the provisions of Code in those areas covered by Section 4(2) of the Code in respect of which the special statute do not have any overriding provision. 15.7 The Code of Criminal Procedure is - "An Act to consolidate and amend the law relating to Criminal Procedure." The application thereof is not restricted only to Indian Penal Code. We are of the view that merely because the Code uses the expressions which are compatible with Indian Penal Code and investigations by Police Officers, the same would not come in the way of application of the provisions of the Code of Crimi....
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....can apply only to cases governed by Sub-S(1), that is, to persons arrested by Police Officers under the provisions of the Code and not to persons arrested by the Customs Officers under the provisions of the Act. This argument ignores S.4(2) of the Code. Section 4(2) of the Code makes all the differences. This provision renders the provisions of the Code applicable in areas not covered by the provisions of the Act. The code mainly purports to deal with offences under the Indian Penal Code and investigation by police officer or officers in charge of police station. That is why S.167(1) refers to S. 57 of the Code and officer in charge of police station. This cannot lead to the conclusion that provisions of S. 167 of the Code cannot be applied to cases under the Customs Act. In relation to matters of investigation, inquiry, trial or other matter not covered by the provisions of the Act, the parallel provisions of the code must necessarily be applied. That is the clear affect of the operation of S. 4(2) of the code. Such operation cannot be negatived merely because a section in the Code uses expression which are compatible with an offence under Penal Code or with investigation being co....
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.... of Customs Act can be said to be a person "accused of any offence" within the meaning of the said article, held that a person so arrested was not an accused within the meaning of Article 20(3) of the constitution and the Customs Officer acting under the Customs Act was not a police officer for the purpose of Section 25 of the Indian Evidence Act, vide lllias v. The Collector of Customs, Madras AIR 1970 SC 1065: (1970 Cri LJ 998) and Ramesh Chandra Mehta v. State of West Bengal AIR 1970 SC 940 : (1970 Cri LJ 863). In both the cases, it is nowhere mentioned that the provisions of Chapter XII of the Code and the provision of Section 167(2) thereof, would not be available when the person is detained under the Customs Act and produced before the Magistrate by the Officer appointed under the said Act." 15.10 The said two judgments were approved by the Hon'ble Supreme Court in Directorate of Enforcement v. Deepak Mahajan, (1994) 3 SCC 440. It was also held that in view of Section 4(2), provisions of the Code would necessarily apply to the extent in the absence of any contrary provision in the Special Act or any special provision excluding the jurisdiction or applicability of the C....
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....ent in Deepak Mahajan (supra) that- "91. Though this Bench is bound by the decisions of all the above Constitution Benches yet these decisions are distinguishable since none of the above decisions relates to the interpretation of Section 167 of the Code explaining the meaning of the word 'accused' or 'accused person' limited to the purpose of Section 167. On the other hand, all those decisions are rendered only on the question of admissibility or otherwise of the statement of a person arrested under the provisions of the general Act or special Acts concerned and recorded while in the custody of the arrester. 110. As we have pointed out in the preceding part of this judgment, Section 167(1) falls under Chapter XII relating to "Information to the Police and their powers to investigate". Sub Section (1) of Section 167 speaks of the arrest by a police officer and the follow up investigation by him...." 111. Neither the Police Act , 1861 (Act V of 1861) nor any other statute defines the expression 'police officer'. Shortly stated, the main duties of the police are the prevention, detention and investigation of crimes. As the powers and ....
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....ied and otherwise dealt with according to the provisions of the Code of Criminal Procedure." 127. In A. R. Antulay v. Ramdas Sriniwas Nayak a Constitution Bench of this Court while examining the similar question with regard to applicability of Section 4 with reference to the Prevention of Corruption Act has laid down the law thus: (SCR P.935 : SCC P-517 para 16) "In the absence of a specific provision made in the statute indicating that offences will have to be investigated, inquired into, tried and otherwise dealt with according to that statute, the same will have to be investigated, inquired into, tried and otherwise dealt with according to the Code of Criminal Procedure. In other words, Code of Criminal is the parent statute which provides for investigation, inquiring into and trial of cases by criminal courts of various designations." 128. To sum up, Section 4 is comprehensive and that Section 5 is not in derogation of Section 4(2) and it only relates to the extent of application of the Code in the matter of territorial and other jurisdiction but does not nullify the effect of Section 4(2). In short, the provisions of this Code would be applicable to ....
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....bed under any provision of PMLA or Customs Act, 1962 which is in conflict with the provisions of the Code, such provision of PMLA or Customs Act, 1962 would have overriding effect on the conflicting provision of the Code. If there is no such overriding provision in these special statutes, the provisions contained in the Code would surely apply in view of section 4(2) read with section 5 of the Code. 15.13 All the aforesaid judgments in the context of Customs Act, 1962 or Central Excise Act, 1944 are in respect of "noncognizable" offences under these Acts. After the judgment in Om Parkash (supra) amendments were carried out and now some of the offences specified under these Acts are made 'cognizable' and rest remain 'non-cognizable' After substitution of sub-section (4) with effect from 28.05.2012, sub-section (4) and (5) of section 104 of the Customs Act read as under -- "(4) Notwithstanding anything contained in the Code of Criminal Procedure. 1973 (2 of 1974), any offence relating to - (a) Prohibited goods: or (b) Evasion or attempted evasion of duty exceeding fifty lakh rupees, shall be cognizable (5) Save as otherwise provi....
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....toms Act, 1962 no Court shall take cognizance of any offence under the Act, except with the mandatory sanction as prescribed. Section 137 of the Customs Act, 1962 is reproduced as follows- "137. Cognizance of offences.-(1) No Court shall take cognizance of any offence under Section 132, Section 133, Section 134 or Section 135 or Section 135-A except with the requisite sanction of the Commissioner of Customs. (2) No Court shall take cognizance of any offence under Section 136,- (a) where the offence is alleged to have been committed by an officer of customs not lower in rank than Assistant Commissioner of Customs, except with the previous sanction of the Central Government; (b) where the offence is alleged to have been committed by an officer of customs lower in rank than Assistant Commissioner of Customs, except with the previous sanction of Commissioner of Customs. (3) Any offence under this chapter may, either before or after the institution of prosecution, be compounded by the Chief Commissioner of Customs on payment, by the person accused of the offence to the Central Government, of such compounding amount and in such manner of compo....
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........... It was, however, argued that when Mitra applied for a search warrant on 16.09.1952, the Additional District Magistrate had recorded an order thereon, "Permitted. Issue search warrant". It was on this date that the Additional District Magistrate took cognizance of the offence. We cannot agree with this submission because the petition of Inspector Mitra clearly states that "As this is non-cognizable offence, I pray that you will kindly permit to investigate the case under Section 155, Criminal P.C." That is to say that the Additional District Magistrate was not being asked to take cognizance of the offence. He was merely requested to grant permission to the police officer to investigate a non-cognizable offence. The petition requesting the Additional District Magistrate to issue a warrant of arrest and his order directing the issue of such a warrant cannot also be regarded as orders which indicate that the Additional District Magistrate thereby took cognizance of the offence ....... Obviously, it is only when a Magistrate applies his mind for the purpose of proceeding under Section 200 and subsequent sections of Chapter XVI of the Code of Criminal Procedure or under Section 2....
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.... lays down that as soon as the investigation is completed the officer in charge of a police station should forward to a Magistrate empowered to take cognizance of an offence on a police report, a report in the prescribed form stating the various particulars mentioned in that sub-section. 10. Chapter XIV deals with the conditions requisite for initiation of proceedings and as to the powers of cognizance of a Magistrate. For our purpose it is enough if we extract Section 190(1) alone. "190. (1) Cognizance of offences by Magistrates.- Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under sub-section (2), may take cognizance of any offence- (a) upon receiving a complaint of facts which constitute such offence; (b) upon a police report of such facts; (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed." 11. Chapter XV which contains Sections 200 to 203 deals with "Complaints to Magistrates". A Magistrate taking cognizance of an offence on complai....
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....ch an order is made, the police will have to investigate the matter and submit a report under Section 173 (2). On receiving the police report the Magistrate may take cognizance of the offence under Section 190(1) (b) and issue process straightway to the accused. The Magistrate may exercise his powers in this behalf irrespective of the view expressed by the police in their report whether an offence has been made out or not. This is because the police report under Section 173(2) will contain the facts discovered or unearthed by the police as well as the conclusion drawn by the police therefrom. If the Magistrate is satisfied that upon the facts discovered or unearthed by the police there is sufficient material for him to take cognizance of the offence and issue process, the Magistrate may do so without reference to the conclusion drawn by the Investigating Officer because the Magistrate is not bound by the opinion of the police officer as to whether an offence has been made out or not. Alternately the Magistrate, on receiving the police report, may without issuing process or dropping the proceeding proceed to act under Section 200 by taking cognizance of the offence on the basis of t....
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....proaching a Magistrate and seeking directions for investigations into any offence under Customs Act, 1962 by any officer authorised under the said Act is concerned, there is no bar and the Magistrate may direct such investigations under Section 155(2) or 156(3) depending upon whether the alleged offence under Customs Act, 1962 in the complaint is 'cognizable' or 'non-cognizable'. However, the Magistrate cannot take cognizance of the offence unless the conditions specified in the overriding provisions of Section 137(1) or 137(2) are satisfied. Once such directions are issued by the Court, the officer authorised under the said act will follow the procedure specified under the Customs Act, 1962, Rules made thereunder and all those provisions of the Code for which there is no inconsistent provision in the Act. 16. In PMLA, the position would be slightly different than Customs Act, 1962, although the principles governing the application of the procedure prescribed under the Code would remain the same. The offence of Money Laundering punishable under Section 4 is defined in Section 3. As per the said Section 3, the offence of money laundering necessarily requires "know....
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....he Scheduled Offence is registered under Section 154 and a report thereof is sent under Section 157 of the Code to the Magistrate, or, a complaint is filed for taking cognizance of a Scheduled Offence by an officer authorised to investigate Scheduled Offence. Further, cognizance of offence under PMLA can be taken only by a Special Court notified and designated under Section 43 for the specified area, and trial shall be in accordance with Section 44 read with Section 46 of PMLA. Section 46 of PMLA specifies that save as otherwise provided under PMLA, the provisions of Code, including the provisons of bails or bond, shall apply to the proceedings before a Special Court. Section 65 of PMLA provides that- 65. Code of Criminal Procedure, 1973 to apply. The provisions of the Code of Criminal Procedure, 1973(2 of 1974) shall apply, in so far 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." 16.4 Under PMLA, various notifications have been issued by the Central Government notifying the procedural rules in respect of the procedures required t....
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.... "28. Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of the PMLA are binding on the High Court while considering the application for bail under Section 439 of the Code of Criminal Procedure. There is no doubt that PMLA deals with the offence of money laundering and the Parliament has enacted this law as per commitment of the country to the United Nations General Assembly. PMLA is a special statute enacted by the Parliament for dealing with money laundering. Section 5 of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will not affect any special statute or any local law. In other words, the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict. 29. Section 45 of the PMLA starts with a non obstante clause which indicates that the provisions laid down in Section 45 of the PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. Section 45 of the PMLA imposes following two conditions for grant of bail....
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.... PMLA specific bar contained in the second proviso to Section 45(1) would necessarily be applicable and the Special Court cannot take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by the officer specified therein. 17. Now, in view of the above, we would have to consider the following prayer made by the petitioner : "iii) to hold that a private criminal complaint by the petitioner would be maintainable for setting the criminal law into motion and to seek any direction for investigation of offence under Section 3 r/w 4 of PMLA along with the offence under Part B of the Schedule inserted in PMLA w.e.f. 14.05.2015, either under Section 156(3) or under Section 155(2) of the Code of Criminal Procedure, as the case may be, pending grant of sanction requisite for taking 'cognizance' in said Scheduled Offence or under PMLA" 18. In the instant case, admittedly, as of now for the alleged Scheduled Offence under the Customs Act, 1962 neither any case is registered under Section 154 by the Customs Authorities for investigating any cognizable offence under the said Act, nor is there any report in respect of the same forwarded ....