TaxTMI 
TaxTMI 
2021 (11) TMI 21
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....n 50 of the Prevention of Money Laundering Act, 2002. 2. The Applicant, at the relevant time, was the Home Minister in the State of Maharashtra. The then Commissioner of Police, Mr.Param Bir Singh, wrote a letter to the Chief Minister of Maharashtra on 20 March 2021 alleging that Applicant abused his position and powers to seek illegal monetary benefits. Writ Petition No.1541of 2021 was filed in this Court by one Dr. Jayashree Patil seeking a direction for investigation against the Applicant. Mr. Param Bir Singh filed a Public Interest Litigation No.6of 2021 on 24 March 2021, seeking a direction for investigation by the Central Bureau of Investigation (CBI). The Division Bench of this Court, by judgment and order dated 5 April 2021, disposed of these petitions and directed a preliminary enquiry into the complaint and allegations. The enquiry was directed to be concluded within fifteen days with liberty to the CBI to decide on further action to be taken. The Applicant challenged the order passed by the Division Bench in the Supreme Court by filing Special Leave Petition (Criminal) Diary No.9414/2021. The Supreme Court dismissed the petition by order dated 8 April 2021. 3. The ....
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....n (Cri.) No.282/2021 was filed by the Applicant along with his son in the Supreme Court. On 16 August 2021, the Supreme Court directed that this writ petition be listed along with matters raising identical legal issues. As regards interim relief, Supreme Court observed that it would be open to the Petitioners (Applicant) to take recourse to appropriate remedies available under the Code of Criminal Procedure, 1973, including by way of quashing petition in the High Court, if so advised. The challenge in the petition pending in the Supreme court was confined to the validity of the provisions in question. The Supreme Court observed that the order was passed in light of the observation made in the case Devendra Dwivedi v/s. Union of India 2021 SCC OnLine 221. The Directorate sent the fifth summons on 16 August 2021 to the Applicant, asking him to remain present, to which the authorized representative of the Applicant appeared and requested for time stating that the Applicant is taking recourse to the lawful remedies as per the liberty granted by the Supreme Court. 6. In this factual backdrop, the Applicant has approached this Court with this application with various reliefs. The reli....
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.....P. and Ors. (2012) 4 SCC 1' with respect to arbitrary arrests; (h) Issue appropriate writ(s), orders(s) or directions(s) to Respondent No.2 in furtherance of the observations; order(s) and direction(s) issued by the Hon'ble Supreme Court inter alia, vide Order dated 02.12.2020 passed in SLP (Cri.) No. 3543 of 2020 titled as 'Paramvir Singh Saini vs. Baljit Singh & Ors.' to the effect that all proceedings carried out by Respondent No.1 & 2 including those in relation to the recording of statements etc. in terms of the Notice(s)/summons(s) issued under Section 50 of PMLA in ECIR MBZO-1/66/2021 to be audio/videographed in the presence of Applicant's lawyer at a visible distance (beyond audible range) inter-alia by way of installation of appropriate CCTV cameras; (i) In the peculiar facts and circumstances of the case, entrust the investigations into ECIR/MBZO-I/66/2021 dated 11.05.2021 to a Special Investigating Team (SIT) comprising of ED officers outside the Mumbai Zonal Office and monitor/supervise the same in terms of the ratio of law laid down by the Hon'ble Supreme Court in "Babu Bhai Jamna Das Patel v. State of Gujarat (2009) 9 SCC 610. Respondent Nos.1 an....
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....b-section (2) of Section 45 of PMLA vide Section 200 of the Finance Act, 2019 (2 of 2019) (23 of 2019) w.e.f. 1.8.2019 which now contemplates that the offences under the Act are always deemed to be 'cognizable' is illegal, arbitrary and unconstitutional. (d) Issue appropriate writ(s), order(s) or direction(s) and hold that the insertion of "Explanation (i)" to Section 3 of Prevention Money Laundering Act, 2002, vide Section 193 of Finance Act (No.2) 2019 w.e.f. 01.08.2019, which requires reading the disjunctive 'or' instead of conjunctive 'and' in Section 3 before the words "projecting or claiming it as untainted property, renders Section 3 to be manifestly arbitrary, excessive, unreasonable, overbroad, and unconstitutional, by inter-alia altering the basis, pre-requisites & the very ambit as well as the scope of the offence contemplated under Section 3, contrary to the interpretation laid to rest by this Hon'ble Court in Nikesh Tarachand Shah v/s Union of India, (2018) 11 SCC 1; (e) Issue appropriate writ(s), order(s) or direction(s) to and hold that the insertion of "Explanation (ii)" to Section 3 of Prevention of Money Laundering Act, 2002, ....
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....stance inter-alia by way of installation of appropriate CCTV cameras; It is apparent from reading of these two sets of prayers that there is an overlap between the prayers in the present Application and Writ Petition (Cri.) No.282/2021 pending in the Supreme Court. 9. Learned Counsel informs us that a group of a large number of matters is being heard by the Supreme court where various legal questions concerning the PMLA, including the applicability of provisions of Code of Criminal Procedure (CrPC), are being argued. The Counsel have also placed on record the questions of law circulated by the learned Solicitor General in this group of matters and questions of law circulated by the counsel for the Applicant in the Supreme Court. Various questions of law regarding the Prevention on Money Laundering Act are under consideration before the Supreme Court in the group of matters, including Criminal Writ Petition No.282/2021. The questions of law circulated before the Supreme Court by the learned Solicitor General relevant for the present case are- as to whether the offence under the PMLA is cognizable or non-cognizable, particularly in view of the Explanation inserted in 2019; whet....
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....urt on 16 August 2021 in Writ Petition (Cri.) No. 282 of 2021 has kept the remedies of the Applicant under the Code of Criminal Procedure by way of quashing Petition and interim relief open, and the only aspect which will now be considered by the Supreme Court is the challenge to the validity of the provisions. Even if some of the prayers made in the petition pending in the Supreme Court overlap with the present application, in view of the specific liberty, the relief prayed for can be considered. The reference to the observations made in the decision in the case of Devendra Dwivedi v/s. Union of India 2021 SCC OnLine 221 is significant and therefore, this Court can decide on the positions of law as well. In the case of Devendra Dwivedi, the Supreme Court had observed while relegating the parties to the High Court that it will benefit from the view of the High Court in respect of the matters that are to be considered by the Supreme Court. According to the learned Additional Solicitor General, the scope of the proceeding before us is narrow, and there is no mandate to consider the application filed by the Applicant, and the words used by the Supreme Court "if so advised" and the ref....
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....licant has approached this Court and the parameters of interference by the High Court at this stage and statutory scheme of the statute in question, the PMLA, will have to be referred to. 15. When the court is called upon the pass orders regarding proceedings under an enactment, it is essential to keep in mind the object and purpose of such legislation. The legislative history and the intent of the Prevention of Money-Laundering Act, 2002 is significant. Large scale money laundering affects the economic interest of the country. Menace of money laundering has international ramifications. The Political Declaration and Global Programme of Action, annexed to the resolutions adopted by the General Assembly of the United Nations on 23 February 1990 and the Political Declaration adopted by the Special Session of the United Nations General Assembly in June 1998 called upon the Member States to adopt national money-laundering legislation and programme. The PMLA was enacted to prevent money laundering and to provide for confiscation of property derived from money laundering. Money-laundering, as defined under Section 2(p) read with section 3, takes place when whosoever directly or indirec....
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.... state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) ...." Thus under section 50, the authorities can enforce the attendance of any person compelling the production of records, for receiving evidence on affidavits, for examination of witnesses and documents etc. The authorities can summon any person to give evidence or to produce any records during the course of any investigation and to attend in person or through authorized agents, as such officer may direct. Section 50(3) also states that such person shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents as may be required. The impugned summons are issued under this provision. 16. Now, we will consider the stage at which the Applicant is before us. Section 2(na) defines 'Investigation' as including all the proceedings under this Act conducted by the Director or by an authority authorised by the Central Government under the Act to collect evidence. The reference is to all Proceedings. It is quite clear that the search carried out under section 17 of th....
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....Unless a gross abuse of power is made out against those who are in charge of the investigation, the court should not generally interfere at the early stages of the investigation. The power to quash criminal proceedings and investigation is exercised very sparingly with circumspection and in the rarest of rare cases. Criminal proceedings ought not to be scuttled at the initial stage. Even to proceed on the ground of malice or abuse of powers, the High Court must be convinced that there is a clear case of abuse of power. It is not the function of the court to monitor the investigation as long as the investigation does not violate any provision of law, and it must be left to the investigating authority to decide the course of the investigation. The court cannot interfere at every stage of investigation and interrogation as it would affect the normal course of the investigation. The investigating agency must be permitted to proceed in its own lawful methodology and the procedure. The High Court should not stifle legitimate prosecution, especially when entire facts are incomplete and hazy and also when the evidence has not been collected and produced. Thus save in exceptional cases wher....
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....we deal with at the outset is not providing the ECIR to the Applicant. This contention was on two facets. First, the copy of ECIR being akin to FIR ought to have been supplied as it is a right of the Applicant to receive the ECIR. The second contention is as an incidence of malafides as the ECIR of 11 May 2021 was made available only on 9 August 2021 by appending to the proposed attachment order under section 5 of the PMLA. It was contended that ECIR has been given even at the stage of remand in some cases; and in the Applicant's case, it is deliberately withheld. Learned Senior Advocate for the Applicant clarified during the submissions that since the issue of applicability of Chapter-XII of Cr.P.C. to the PMLA is pending before the Supreme Court, the question of ECIR be equated with FIR will be decided in the Applicant's writ petition pending in the Supreme Court, and the aspect of ECIR should be considered here as a ground of legal malice. 21. The Division Bench of this Court in the judgment and order dated 29 July 2015 in the case of Charu Kishore Mehta v. State of Maharashtra WP No.2961/2015 decided on 29 July 2015 has held that ECIR is an internal document of the E....
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....etition challenging the direction as regards the proposed investigation. It was also argued that the provision of the amended Companies Act, 1956 was offending the protection given under Article 20(3). The Constitution Bench negating the contention based on Article 20(3), observed that though it is true that as a result of the investigation, it may be discovered that the affairs of the company not only disclose irregularity but commission of the offence, the prosecution will not retrospectively change the complexion or character of the proceeding. 23. According to us, this aspect need not detain us. The legal questions as regards section 50(3) of the PMLA offending constitutional guarantee under Article 20(3) is being considered by the Apex Court in the Applicant's petition, and the stage of Applicant's arrest under section 19 has not yet reached. We have to keep in mind the stage at which the Applicant has approached before us. The stage at which the Applicant has approached before us is only under section 50 of the PMLA. This facet is relevant for other prayers of the Applicant as well. 24. Now, we come to the main contention of the Applicant. On law, it was contended b....
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.... the Applicant for the documents relevant to the case in ECIR pertaining to the Applicant. The Applicant duly complied with the summons by appearing through his authorized representative. With a reply, the Applicant asked for a copy of the ECIR and the list of documents. On the same date, the Personal Secretary of the Applicant Mr. Palande and Personal Assistant, Mr. Kundan Shah, were arrested. b) Immediately thereafter, on 28 June 2021, again, a summons was issued by Respondent No.2. This time the Applicant was asked to appear in person on 29 June 2021 in connection with the evidence collected and statements recorded during the investigation in respect of the concerned ECIR. This summons was issued without giving a copy of the ECIR to the Applicant. On 29 June 2021, the Applicant co-operated through the authorized representative and again asked for the documents and ECIR. The Applicant also requested for recording his statement through Video Conference. c) The third summons was received by the Applicant on 2 July 2021. This summons directed the Applicant to appear on 5 July 2021. There was no other reference to the documents and schedule. The letter annexed to th....
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....ued on 16 August 2021. The summons was issued even without waiting for the text of the order to be uploaded, and this was a clear attempt to scuttle the Applicant's attempt to approach this Court. h) When the first summons was issued, the Applicant was asked to bring documents relating to ECIR, and the ECIR was never shared with the Applicant. Even the list of documents was not given to the Applicant. This was calculated to embarrass the Applicant, and it cannot be considered as a bona fide approach of the Authority. The Applicant in the first summons was asked to appear in person or through his representative, and even after his authorized representative attended, this option was not given in the subsequent summons, and the Applicant was asked to remain present. The social standing of the Applicant in public, his age and health condition ought to have been considered. The Applicant was forced to appear in person without any reason, and selected news items were released to media tarnishing his image. This is a complete abuse of discretion under section 50(2) of the PMLA. i) The summonses were issued to exactly coincide with the proceedings in the Court. For in....
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....n, and what was the material. The summons was in respect of the same search. The Respondent- Directorate, in the course of the investigation, then issued a second summons wherein it was made clear to the Applicant that the Applicant should remain present in connection with the evidence collected and the statements recorded. The Applicant gave a lengthy reply and again reiterated that he should be given a copy of the ECIR. The reply was also under the belief that once his statement was recorded on 25 June 2021 during the search, it need not be recorded again, which is an incorrect position. Thereafter two persons were arrested after the search, and they had given their statements. Therefore, the matter had travelled beyond the ECIR, which is only a document at the inception. The third summons issued on 2 July 2021 was accompanied by a detailed letter. This letter clarified that the Applicant's presence is required to confront the evidence collected, including the statements recorded. The Respondent- Directorate informed the Applicant that he was adopting dilatory tactics, the ECIR is only an internal document, and it is a settled position that the investigating agency will decid....
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...., when the matter was pending in this Court, a complaint was filed before the Chief Metropolitan Magistrate for an offence under section 174 of the Indian Penal Code. The Applicant submitted that this is one more facet of malice wherein even though there is a specific section, i.e. section 63 of the PMLA, which makes non-compliance of direction to appear pursuant to summons punishable, which was not invoked. According to us, this argument does not lead the case of the Applicant any further. Section 63 of the PMLA provides for punishment for false information or failure to give information. Section 63(c) states that if a person to whom a summon is issued under section 50 either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce books of account or documents at the place or time does not do so, he is liable for penalty. Section 63(4), however, states that, notwithstanding anything contained in clause (c) of sub-section (2), a person who intentionally disobeys any direction issued under section 50 shall also be liable to be proceeded against under section 174 of the IPC. From section 63(4), it is quite clea....
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....gation was either beyond the jurisdiction or was illegal. The Applicant's argument that the investigation under the PMLA in the present case cannot go beyond the proceeds of crime identified in the schedule, and predicate offence, is without merit. This ground is taken in the Petition; however, how exactly the proceedings are beyond the predicate offence ought to have been demonstrated before us in oral arguments. As a matter of fact, nothing was argued in that regard. That an FIR is registered against the Applicant by the Central Bureau of Investigation under the provisions of the Prevention of Corruption Act is an admitted position. Also that the offence under the Prevention of Corruption Act is a part of the schedule appended to PMLA, which sets out the predicate offences. In the absence of any factual particulars placed before us demonstrating from the FIR such finding that in fact, the investigation is proceeding beyond the scope of the predicate offence, cannot be rendered in abstract. Suffice it to note that the Applicant is one of the main accused in the FIR filed under the Prevention of Corruption Act. 33. On the ground of illegality, nothing is pointed out to us as to ....
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....hall apply in so far as it is not inconsistent with the provisions of the PMLA to arrest, search, seizure and investigation and other proceedings under the Act. The Division Bench held that there is nothing in the scheme of the PMLA that sections 41 and 41A of Cr.P.C. would not apply to the exercise of the power of arrest under section 19 of the PMLA, and the PMLA does not impliedly exclude the application of sections 41 and 41A of Cr.P.C. The Directorate of Enforcement has challenged the decision in the case of Vakamulla Chandrashekar in Special Leave Petition (Cri.) Diary No.36918/2017 and while issuing notice on 4 January 2018, the Supreme Court has stayed the operation of the impugned order of the Delhi High Court. The learned counsel for the parties have sought to advance arguments on the implication of the order passed by the Supreme Court staying the operation of the order of the Delhi High Court. Based on the decision of the Supreme Court in the case of Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association CSI CINOD Secretariat. Madras (1992) 3 SCC 1, it was sought to be contended by the Applicant that the stay order of the Supreme Court does not mean that t....
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....Court had failed to exercise its powers. In the case of Arnab Goswami, the appellant was a TV journalist who had broadcast certain material raising issues which, according to him, were not palatable to political parties ruling the State. The FIR filed in the year 2018 was closed by submitting a Closure Report in the year 2019, which the learned Magistrate also accepted. After the closure report, there were transactions between the parties. Thereafter, after almost a year, multiple FIRs were filed. The Supreme Court had clubbed the multiple FIRs against the appellant, and then at the instance of the home department of the State, the matter was reopened. The appellant was then arrested. These facts, on the face of it, were striking, and the Supreme Court found that the Petitioner made out a case before it. Quite clearly, the case at hand does not have the features as in the case of Arnab Goswami, which on the face of it, demonstrated the need for intervention. It is equally important to note that the Supreme Court in this decision also emphasized the need to ensure proper enforcement of criminal law, and both ends of the spectrum need to be balanced. Therefore facts of each case will....
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....tified in passing the order of not to arrest and/or "no coercive steps" either during the investigation or till the investigation is completed and/or till the final report/chargesheet is filed under Section 173 Cr.P.C., while dismissing/disposing of the quashing petition under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India." (emphasis supplied) The above-quoted observation state that when the investigation is in progress, and the facts are not clear, the High Court should restrain itself from passing interim order of not to arrest or "no coercive steps to be adopted" and should relegate the Applicant to apply Section 438 Cr.P.C. before the competent court. 42. The learned ASG contended that when the Applicant has invoked section 482 of Cr.P.C., a discretionary relief, the Applicant's conduct will also have to be seen. Learned ASG submitted that while the Applicant keeps on proclaiming that he is ready and willing to co-operate, his conduct is entirely otherwise. For some reason or other, the Applicant is avoiding attending pursuant to the summons. We find this submission as justified. If there are no mala fides and no illegality, then there i....
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....021, the Supreme Court has referred to the remedies available to the Applicant under the Cr.P.C., which includes section 438 for anticipatory bail. We have not been shown any reason as to why the Applicant cannot take recourse to this remedy by approaching the competent court, like any other person apprehending arrest. It is obvious if the Applicant intends to avail of this remedy under Section 438 of the Cr.P.C., it will be decided on its own merits. 45. We conclude that no case is made out by the Applicant for the exercise of our jurisdiction under Section 482 Cr. P.C to restrain Respondent No.1 and Respondent No.2 from taking any penal/coercive action against the Applicant. If the applicant has apprehension of arrest, he has the statutory remedy under section 438 of Cr. P.C by approaching the competent court. 46. Grant of prayer clause (c) to direct recording of Applicant's statement through electronic mode and not to compel his presence will amount to interfering with the discretion of the investigating authority as to the manner in which they intend to carry out the investigation. The Supreme Court in the case of P. Chidambaram v. Directorate of Enforcement (2019) 9 ....
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....ement of the Applicant be recorded in the presence of his advocate and the advocate be permitted to be present at the time of questioning at a distance, the Applicant relied upon the decision of the Supreme Court in the case of Birendra Kumar Pandey v. Union of India WP (Crl.) No.28/2012 decided on 16 April 2012. In this decision, the Supreme Court observed thus: "The prayer has been opposed by the learned Additional Solicitor General, Mr.P.P. Malhotra, who has brought to our notice the decision of a Three Judges Bench in the case of Poolpandi and Others v. Superintendent, Central Excise and Others (1992) 3 SCC 259. Mr. Malhotra pointed out that the very first paragraph of the said judgment mentions that the common question arising in the said case before their Lordships was the stand taken by the petitioners that they were entitled to-the presence of their lawyers when they were being questioned during the interrogation under the provisions of the Customs Act, 1962, or the Foreign Exchange Regulation Act, 1973. Their Lordships had noticed the difference of opinion of different High Courts in this connection and had rejected the submission made on behalf of the petition....
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....ould be made to sit at a distance beyond hearing range, but within visible range and the Lawyer must be prepared to be present whenever the petitioners are called upon to attend such interrogation. The criminal miscellaneous petition is disposed of accordingly." The learned ASG sought to contend that the order passed in the case of Birendra Kumar Pandey is per incuriam in the light of the decision of Poolpandi v. Superintendent, Central Excise (1992) 3 SCC 259 which is a decision of three learned Judges in which the request for presence of the lawyer was rejected. The learned ASG submitted that the decision in the case of Poolpandi was followed in the case of Senior Intelligence Officer, Directorate of Revenue Intelligence v. Jugal Kishore Samra (2011) 12 SCC 362: (2012) 1 SCC (Cri) 573. The learned ASG submitted that the decision in the case of Birendra Kumar Pandey incorrectly records that Poolpandi was a case of direct involvement during actual interrogation and, thus, the decision in the case of Poolpandi being of three learned Judges, this Court should follow the same. It is, however, needs to be noted that the decision in the case of Birendra Kumar Pandey has refe....
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....ce. Whenever such prayers have come before the court for consideration, both in Apex Court and in this Court, the counsel for Directorate of Enforcement has taken the stand that allowing lawyers presence as above is the position of law. We find no reason as to why this legal position be deviated in the case of the present Applicant. This does not interfere with the investigation in any manner, and there is no specific reason why the Applicant should not be made entitled to this direction as in all other cases of investigation under PMLA, and the prayer deserves to be grated. 51. To recapitulate, under the provisions of PMLA, the issuance of summons is part of the investigation. The High Courts would not interfere and interdict a lawful investigation under its powers under section 482 of Cr.P.C. unless exceptional circumstances as per the settled law are present. None of these grounds exists in the present case. There is no jurisdictional error in the issuance of summonses as they have been issued by the officers duly authorized under the PMLA. The object and purpose of PMLA show that it not only confers powers on the authority to investigate the offence of money laundering but a....