TaxTMI 
TaxTMI 
2023 (10) TMI 890
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....ceedings emanating from the ECIR bearing No. ECIR/DLZO-I/04/2020 and now being investigated..." by the ED; and a further direction that the ED be directed not to take any coercive steps against the petitioner curtailing his personal liberty. Brief Background 2. The immediate provocation for the petitioner to approach the court is summons dated 18.08.2023 issued to him by the Assistant Director, Directorate of Enforcement, Chandigarh under section 50(2) and (3) of the Prevention of Money Laundering Act, 2002 ('PMLA'), requiring the petitioner to appear before the ED on 21.08.2023. 3. The petitioner states in the petition that he "...has a strong apprehension that he will be illegally detained/arrested by the Respondents and he will be made a scapegoat in order to protect the interest of the main promoters/alleged main beneficiaries of the company ...". [cf. para 5 of the writ petition] 4. Notably, a copy of the impugned ECIR has not been filed alongwith the petition. The petitioner says that he has not been supplied a copy of the impugned ECIR till date. Relevant Factual Matrix 5. Briefly, the contours of the matter that are relevant for deciding the present petiti....
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....0B of the IPC, sections 211/628/227/233 of the Companies Act, 1956 and sections 129/447/448 of the Companies Act, 2013, in which case he was admitted to bail vide judgment dated 03.05.2023 in Bail Appl. No. 251/2023 titled Ashish Mittal vs. Serious Fraud Investigation Office 2023 SCC OnLine Del 2484 after suffering custody for about 07 months. 6. Though notice had not yet been issued on the present petition, the respondents chose to file reply-affidavit dated 31.08.2023, by way of a pre-emptive response. 7. This court has heard Mr. Mohit Mathur, learned senior counsel appearing for the petitioner; as also Mr. Anupam S. Sharma, learned Special Counsel appearing for the respondents/ED. Written submissions have also been filed on behalf of the parties. 8. By way of a preliminary objection, Mr. Sharma has opposed the very maintainability of the present petition, submitting that the trigger for filing the present petition is merely a summons dated 18.08.2023 issued under section 50 of the PMLA and nothing more; and that it is settled law that a writ petition seeking stay or quashing of summons is not maintainable. Furthermore, Mr. Sharma submits, that in any event, the present ....
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....a show-cause notice and in any event the final relief as sought for by Respondent 1-writ petitioner in relation to the show-cause notice should not have been granted by an interim order of the nature passed by withholding any further action in this regard. It was pointed out that Respondent 1 is responsible for financial irregularities involving nearly Rs 270 crores and documents have been forged, accounts have been manipulated; and in any event Respondent 1 was free to canvass all the points that were taken in the writ petition before the authority issuing the notice. Instead of doing that, he rushed to the High Court and unfortunately the High Court not only entertained the writ application but also granted interim relief which was in effect allowing the writ petition even before it was heard on merits. The final relief sought for itself, in substance, was granted by the interim order. The High Court should have thrown out the writ petition at the threshold. * * * * * "5 [Ed. : Para 5 corrected vide Corrigendum No. F.3/Ed.B.J./40/2004 dated 2-4-2004] . This Court in a large number of cases has deprecated the practice of the High Courts entertaining writ petition....
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.... 14. In the context of summons issued by the ED under section 50 of the PMLA, a Co-ordinate Bench of this court in Virbhadra Singh vs. Enforcement Directorate & Ors. 2017 SCC OnLine Del 8930, has observed as follows : "143. ... The powers conferred on the enforcement officers for purposes of complete and effective investigation include the power to summon and examine "any person". The law declares that every such person who is summoned is bound to state the truth. At the time of such investigative process, the person summoned is not an accused. Mere registration of ECIR does not make a person an accused. He may eventually turn out to be an accused upon being arrested or upon being prosecuted. No person is entitled in law to evade the command of the summons issued under Section 50 PMLA on the ground that there is a possibility that he may be prosecuted in the future. The law declared in Nandini Satpathy (supra) concerning the statements under Section 161 Cr.P.C. recorded by the police, and in other pronouncements concerning similar powers of officers of the Customs Department, as noted earlier, provide a complete answer to the apprehensions that have been expressed." (em....
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....ognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the conc....
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....mons, 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 attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are exam....
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...., be taken to a Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that ..... (emphasis supplied) 27. The power under section 50 of the PMLA to issue summons to a person and to require the production of documents and record statements, which is akin to the powers of a civil court, is different and distinct from the power under section 19 to arrest a person. These are two separate and distinct provisions. The exercise of the powers under one, cannot be restrained on the apprehension that it could lead to the exercise of powers under the other. If that is permitted, any and every person summonsed under section 50 of the PMLA, to produce documents or give a statement on oath, could resist such summons expressing mere apprehension that he may face arrest at the hands of the ED, in exercise of the powers under section 19 of the PMLA. Such a position would be antithetic to the statutory scheme. 28. Based on the provisions and precedents referred-to above; on a bare perusal of section 50 of the PMLA under which summons have been issued to the petitioner; and the fact that the petitioner is not an accused i....
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....son who is named as an accused in relation to a non-bailable offence. 34. The anxiety expressed on behalf of the petitioner in this regard however, is that in State of Gujarat vs. Choodamani Parmeshwaran Iyer 2023 SCC OnLine SC 1043, the Supreme Court has held that a person summonsed under section 69 (sic, section 70) of the Central Goods & Service Tax Act, 2017 ('CGST Act') for recording his statement cannot invoke section 438 Cr.P.C. since no FIR gets registered before the power of arrest is invoked under section 69(1) of the CGST Act; and that therefore, such person can seek protection against arrest only by invoking the jurisdiction of the High Court under Article 226 of the Constitution of India; arguing therefore, that since no FIR is registered even under the PMLA, the petitioner would face the same impediment as in Choodamani (supra) and can only seek relief in writ proceedings. However, it may be noted that firstly, the observation by the 2-Judge Bench in Choodamani has been made in the context of the CGST Act; and besides, two separate Constitution Benches of 5-Judges each have in Gurbaksh Singh Sibbia vs. State of Punjab (1980) 2 SCC 565 and in Sushila Aggarwal vs. St....
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....ction 438 cannot be exercised in regard to offences punishable with death or imprisonment for life unless, the court at the stage of granting anticipatory bail, is satisfied that such a charge appears to be false or groundless. Now, Section 438 confers on the High Court and the Court of Session the power to grant anticipatory bail if the applicant has reason to believe that he may be arrested on an accusation of having committed "a non-bailable offence". We see no warrant for reading into this provision the conditions subject to which bail can be granted under Section 437(1) of the Code. That section, while conferring the power to grant bail in cases of non-bailable offences, provides by way of an exception that a person accused or suspected of the commission of a non-bailable offence "shall not be so released" if there appear to be reasonable grounds for believing that he has been guilty of an offence punishable with death or imprisonment for life. If it was intended that the exception contained in Section 437(1) should govern the grant of relief under Section 438(1), nothing would have been easier for the legislature than to introduce into the latter section a similar provision. ....
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....expanding the scope and ambit of the discretion conferred on the High Court and the Court of Session but, for the purpose of limiting it. Accordingly, we are unable to endorse the view of the High Court that anticipatory bail cannot be granted in respect of offences like criminal breach of trust for the mere reason that the punishment provided therefor is imprisonment for life. Circumstances may broadly justify the grant of bail in such cases too, though of course, the court is free to refuse anticipatory bail in any case if there is material before it justifying such refusal. * * * * * "21. The High Court says in its fourth proposition that in addition to the limitations mentioned in Section 437, the petitioner must make out a "special case" for the exercise of the power to grant anticipatory bail. This, virtually, reduces the salutary power conferred by Section 438 to a dead letter. In its anxiety, otherwise just, to show that the power conferred by Section 438 is not "unguided or uncanalised", the High Court has subjected that power to a restraint which will have the effect of making the power utterly unguided. To say that the applicant must make out a "special....
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.... cannot be laid down as an inexorable rule that anticipatory bail cannot be granted unless the proposed accusation appears to be actuated by mala fides; and, equally, that anticipatory bail must be granted if there is no fear that the applicant will abscond. There are several other considerations, too numerous to enumerate, the combined effect of which must weigh with the court while granting or rejecting anticipatory bail. The nature and seriousness of the proposed charges, the context of the events likely to lead to the making of the charges, a reasonable possibility of the applicant's presence not being secured at the trial, a reasonable apprehension that witnesses will be tampered with and "the larger interests of the public or the State" are some of the considerations which the court has to keep in mind while deciding an application for anticipatory bail. ..... * * * * * "37. Thirdly, the filing of a first information report is not a condition precedent to the exercise of the power under Section 438. The imminence of a likely arrest founded on a reasonable belief can be shown to exist even if an FIR is not yet filed." (emphasis supplied) Sushila Agg....
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....5], when a person complains of apprehension of arrest and approaches for order, the application should be based on concrete facts (and not vague or general allegations) relatable to one or other specific offence. The application seeking anticipatory bail should contain bare essential facts relating to the offence, and why the applicant reasonably apprehends arrest, as well as his side of the story. These are essential for the court which should consider his application, to evaluate the threat or apprehension, its gravity or seriousness and the appropriateness of any condition that may have to be imposed. It is not essential that an application should be moved only after an FIR is filed; it can be moved earlier, so long as the facts are clear and there is reasonable basis for apprehending arrest." (emphasis supplied) 35. It is argued however, that what Gurbaksh Singh Sibbia (supra) and Sushila Aggarwal (supra) lay-down are general propositions; but since PMLA is more akin to the regime under the CGST Act in that it does not contemplate the recording of an FIR but only filing of a complaint before the court, the recent observations of the Supreme Court in Choodamani (supr....
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....ourt. (1-B) The presence of the applicant seeking anticipatory bail shall be obligatory at the time of final hearing of the application and passing of final order by the Court, if on an application made to it by the Public Prosecutor, the Court considers such presence necessary in the interest of justice. (2) When the High Court or the Court of Session makes a direction under sub-section (1), it may include such conditions in such directions in the light of the facts of the particular case, as it may think fit, including- (i) a condition that the person shall make himself available for interrogation by a police officer as and when required; (ii) a condition that the person shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer; (iii) a condition that the person shall not leave India without the previous permission of the court; (iv) such other condition as may be imposed under sub-section (3) of Section 437, as if the bail were granted under that section. (3) If su....
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....n 65 of the PMLA makes the provisions of the Cr.P.C. applicable inter-alia to an arrest made under PMLA "... insofar as they are not inconsistent with the provisions ..." of the PMLA. To be sure, though section 71 of the PMLA contains a non-obstante clause, there is nothing in the PMLA which restricts the court from granting relief under section 438 Cr.P.C. in an appropriate case. The only rider being that the twin conditions in section 45 of the PMLA will also have to be satisfied [Vijay Madanlal Choudhary (supra) at paras 411-412, 467(xiii)(d)]. In the opinion of this court therefore, there is no requirement in law for a prosecution complaint to have been filed for a person to maintain an application under section 438 Cr.P.C. Save for the stringent twin-conditions contained in section 45 PMLA, there is no provision in the PMLA which modifies the provisions of section 438 Cr.P.C. 40. In fact it is the respondent's stand that the petition is not maintainable since the petitioner has no locus standi to seek quashing of an ECIR or the prosecution complaint in which he is not an accused. The respondent has also said that there is an alternate, efficacious remedy available to the pe....