TaxTMI 
TaxTMI 
2022 (11) TMI 502
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.... A crime comes to be registered in Crime No.48 of 2022 before the Chowk Police Station, Kalaburagi in which the petitioner is one of the accused. The same is transferred to the 2nd respondent, the Investigating Agency. Another crime comes to be registered in Crime No.60 of 2022 before the High Grounds Police Station against 34 persons in which petitioner is accused No.29. The latter crime was registered during the time when the earlier crime was under investigation. On 26.07.2022 the police filed charge sheet in Crime No.60 of 2022. The petitioner throughout has been in prison either concerning crime No.48 of 2022 or crime No.60 of 2022. 4. The issue in the case at hand is not with regard to merits of the matter concerning either of the crimes. What drives the petitioner to this Court is that on 30-08-2022 the 3rd respondent/ Directorate of Enforcement ('ED' for short) files an application under Section 50(3) of the Prevention of Money Laundering Act, 2002 ('the PMLA' for short) before the concerned Court i.e., the learned Magistrate in C.C.No.25035 of 2022 seeking permission to record written statement of five accused including the petitioner who are in judicial custody....
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....ubmission. 7. I have given my anxious consideration to the submissions made by the respective learned counsel and perused the material on record. 8. Before embarking upon the consideration of respective contentions on merit, I deem it appropriate to notice the statutory frame work of the PMLA. Section 2 of the PMLA deals with definitions. Section 2(1)(z) defines a 'Special Court' to mean a Court of Session designated as Special Court under sub-section (1) of Section 43. It is not in dispute that an ECIR is filed against the petitioner and it is in furtherance of the said registration of the crime, statements of the petitioner are sought to be recorded by the respondent/ED to consider whether there is an offence made out against the petitioner for offences punishable under the PMLA. Now PMLA would mean offences punishable under Chapter II which deals with offence of money laundering. Chapter-II encompasses within itself Sections 3 and 4 of the PMLA. Sections 3 and 4 thereof read as follows: "3. Offence of money-laundering.-Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activit....
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.... High Court of the State in which a Sessions Court designated as Special Court was functioning immediately before such designation. (2) While trying an offence under this Act, a Special Court shall also try an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial." (Emphasis supplied) Section 43 directs constitution of a Special Court or a designated Court and such Court to be the Court of Session. Therefore, in terms of Section 43 for trying the offence punishable under the PMLA designated Court is the Court of Session. Section 44 of the PMLA reads as follows: "44. Offences triable by Special Courts.-(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) an offence punishable under Section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed: Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall continue to try....
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....4 deals with offences triable by Special Court. Special Court would mean the Court of Session. Section 44(1)(c) mandates that if the Court which has taken cognizance of a scheduled offence is other than the Special Court, it shall immediately commit the same to the Special Court. Section 50 of the PMLA reads as follows: "50. Powers of authorities regarding summons, production of documents and to give evidence, etc.-(1) The Director shall, for the purposes of Section 13, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:- (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a reporting entity, and examining him on oath; (c) compelling the production of records; (d) receiving evidence on affidavits; (e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose at....
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....led and the petitioner continues to be in judicial custody and the matter is pending consideration before the Court of the learned Magistrate in C.C.No.25035 of 2022. The issue involved is the alleged scam with regard to recruitment of Police Sub-Inspectors in the year 2021. Huge cash flow is also alleged in the case at hand. It is, therefore, to get into the angle of money laundering an ECIR comes to be registered against the petitioner. Pursuant to registration of ECIR, the authorities, as obtaining under Section 50 of the PMLA, sought to record the statements of the petitioner with regard to registration of crime. In terms of Section 50(2) of the PMLA which empowers the Director or an authority authorized for collection of evidence, the statements of the petitioner including others who are in judicial custody concerning C.C.No.25035 of 2022 are sought to be recorded. Therefore, the application was filed before the concerned Court. The application so filed before the concerned Court by the ED is titled "APPLICATION TO RECORD STATEMENTS UNDER SECTION 50(3) OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002" and the plea of the ED before the learned Magistrate is as follows: ....
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....s of subsections (2) and (3) of Section 50. Therefore, the provisions of PMLA were invoked against the petitioner and it is during investigation where the offence under Sections 3 and 4 is made out the statements are sought to be recorded. 10. If the ED wants to invoke the provisions of the PMLA to discern the offence under Section 3 of the PMLA, the designated Court is the Court of Session alone which had the power to even consider any application emanating from the provisions of the PMLA as the offence supra, Section 43 supra and Section 71 clearly mean that the designate Court to try anything emanating from the PMLA is the Special Court and the Special Court is the Court of Session. Section 71 has overriding effect on any law. The petitioner may have been in custody concerning C.C.No.25035 of 2022 and the said custody is ordered by the learned Magistrate. Merely because custody is ordered by the learned Magistrate, he cannot be clothed with the powers of a Court of Session, which alone has the power to consider any application of the kind that was made before the learned Magistrate. The learned Magistrate was dealing with an application filed under Section 50 of the PMLA. It ....
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....ecial Courts for such area or areas or for such case or class or group of cases as may be specified in the notification. Explanation.-In this sub-section, "High Court" means the High Court of the State in which a Sessions Court designated as Special Court was functioning immediately before such designation. (2) While trying an offence under this Act, a Special Court shall also try an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Criminal Procedure Code, 1973 (2 of 1974), be charged at the same trial." 353. The Special Courts established under Section 43 of the 2002 Act are empowered to try the offences under the 2002 Act. Section 44 bestows that power in the Special Courts. The same reads thus: "44. Offences triable by Special Courts.-(1) Notwithstanding anything contained in the Criminal Procedure Code, 1973 (2 of 1974),- (a) an offence punishable under section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed: Provided that the Special Court, trying ....
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....eference to a "Special Court" designated under section 43." 354. This provision opens with a non-obstante clause making it clear that the dispensation provided therein is notwithstanding anything contained in the 1973 Code regarding the matters provided therein in relation to trials concerning offence of money-laundering to be conducted by the Special Court. This provision has undergone amendment vide Act 20 of 2005, Act 2 of 2013 and Finance (No. 2) Act, 2019. In the present set of matters, we are essentially concerned with the provision as obtaining after Act 2 of 2013 and the subsequent amendment vide Finance (No. 2) Act, 2019. To begin with, Clause (a) in sub-section (1) of Section 44, as existed prior to amendment Act 2 of 2013, stood thus: "44. Offences triable by Special Courts.-(1) Notwithstanding anything contained in the Criminal Procedure Code, 1973 (2 of 1974),- (a) the scheduled offence and offence punishable under Section 4 shall be triable only by the Special Court constituted for the area in which the offence has been committed: Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall ....
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....diction that is not conferred under the Act cannot be conferred even by the Court. The Apex Court in the said judgment holds as follows: "7. The State Government on 15-1-1983, notified the appointment of Shri R.B. Sule as the Special Judge to try the offences specified under Section 6(1) of the 1952 Act. On or about 25-7-1983, it appears that Shri R.B. Sule, Special Judge discharged the appellant holding that a member of the Legislative Assembly is a public servant and there was no valid sanction for prosecuting the appellant. 8. On 16-2-1984, in an appeal filed by Respondent 1 directly under Article 136, a Constitution Bench of this Court held that a member of the Legislative Assembly is not a public servant and set aside the order of Special Judge Sule. Instead of remanding the case to the Special Judge for disposal in accordance with law, this Court suo motu withdrew the Special Cases No. 24/82 and 3/83 (arising out of a complaint filed by one P.B. Samant) pending in the Court of Special Judge, Greater Bombay, Shri R.B. Sule and transferred the same to the Bombay High Court with a request to the learned Chief Justice to assign these two cases to a sitting Judge....
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....f Articles 14 and 21 of the Constitution and whether such directions were at all valid or legal, and (2) if such directions were not at all valid or legal in view of the order dated 17-4-1984 referred to hereinbefore, is this appeal sustainable or the grounds therein justifiable in these proceedings. In other words, are the said directions in a proceeding inter partes binding even if bad in law or violative of Articles 14 and 21 of the Constitution and as sued are immune from correction by this Court even though they cause prejudice and do injury? These are the basic questions which this Court must answer in this appeal. ... ... ... 22. The only question with which we are concerned in this appeal is, whether the case which is triable under the 1952 Act only by a Special Judge appointed under Section 6 of the said Act could be transferred to the High Court for trial by itself or by this Court to the High Court for trial by it. Section 406 of the Code deals with transfer of criminal cases and provides power to this Court to transfer cases and appeals whenever it is made to appear to this Court that an order under this section is expedient for....
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....ces under Section 6(1) of the said Act. The condition is that notwithstanding anything contained in the Code of Criminal Procedure or any other law, the said offences shall be triable by Special Judges only. (emphasis supplied). Indeed conferment of the exclusive jurisdiction of the Special Judge is recognised by the judgment delivered by this Court in A.R. Antulay v. Ramdas Sriniwas Nayak [(1984) 2 SCC 500: 1984 SCC (Cri) 277: (1984) 2 SCR 914] where this Court had adverted to Section 7(1) of the 1952 Act and at p. 931 (SCC p. 514) observed that Section 7 of the 1952 Act conferred exclusive jurisdiction on the Special Judge appointed under Section 6 to try cases set out in Sections 6(1)(a) and 6(1)(b) of the said Act. The court emphasised that the Special Judge had exclusive jurisdiction to try offences enumerated in Section 6(1)(a) and (b). In spite of this while giving directions in the other matter, that is, R.S. Nayak v. A.R. Antulay [(1984) 2 SCC 183, 243: 1984 SCC (Cri) 172: (1984) 2 SCR 495, 557] this Court directed transfer to the High Court of Bombay the cases pending before the Special Judge. It is true that Section 7(1) and Section 6 of the 1952 Act were referred to whi....
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....anding anything inconsistent therewith contained in any other law for the time being in force. Section 14 is the rule-making power of the Central Government. Section 15 repeals the Ordinance. ... ... ... ... 22. The Special Court may not be a criminal court as postulated by Section 6 of the Code. All the same, it is a criminal court of original jurisdiction. On this count the doubt, if any, stands resolved by the decision of the Constitution Bench of this Court in A.R. Antulay v. Ramdas Sriniwas Nayak [(1984) 2 SCC 500 (p. 527, para 27) : 1984 SCC (Cri) 277] . In Antulay case [(1984) 2 SCC 500 (p. 527, para 27) : 1984 SCC (Cri) 277] the Constitution Bench said that shorn of all embellishment, the Special Court is a court of original criminal jurisdiction and to make it functionally oriented some powers were conferred by the statute setting it up and except those specifically conferred and specifically denied, it has to function as a court of original criminal jurisdiction not being hidebound by the terminological status description of Magistrates or a Court of Session. Under the Code, it will enjoy all powers which a court of original criminal ju....