TaxTMI 
TaxTMI 
2024 (5) TMI 980
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....and manifest violation of law in the manner in which respondent is conducting investigation raising serious apprehension both about the veracity and purpose of the investigation which investigation appears to be a tool for propaganda than any serious or sincere endeavour to inquire facts and affix responsibility therefore, b. issue a writ, order or direction in the nature of certiorari quashing the second ECIR/13/LKZO/2019 registered at zonal office Lucknow and all subsequent communications/ proceedings emanating therefrom, c. issue a writ, order or direction in the nature of certiorari quashing the third ECIR/25/LKZO/2023 registered at zonal office Lucknow and all subsequent communications/ proceedings emanating therefrom, d. issue a writ, order or direction in the nature of mandamus directing the respondent and its officers to show scrupulous regard for their statutory responsibilities to avoid misconduct in discharge thereof and not to use their investigation to violate the fundamental rights of citizens and the successive ECIR not only being impermissible in law but infringing both the reputation and fair treatment of the persons against whom such inv....
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....d. The reliance has been placed on the law laid down by the Hon'ble Supreme Court in T.T. Antony Vs. State of Kerala (2001)6 SCC 181. 7. It is vehemently submitted that the petitioner in order to know the facts on the basis of subsequent ECIR has been lodged while replying to the said summons sought copy of the ECIR's and also posted a copy thereof through speed post but no copy of ECIRs have been provided and in all probability the summons which have been sent pertaining to the above mentioned two subsequent ECIRs are with regard to the same companies which have already been investigated by the Directorate of Enforcement and pertaining to which a fulfledged complaint has already been filed before the Special Court Companies Act, Dwarika, Delhi and it is not revealed as to whether any further investigation or inquiry is being done by the Enforcement Directorate, in the same matter. 8. It is vehemently submitted that the instant case is an example wherein the authority vested in State has been abused and exploited by the State Authorities. The two ECIRs lodged subsequently cannot be contemplated to be having new cause of action as copy of the same has never been provid....
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....0. Shri Rohit Tripathi, learned counsel appearing for Enforcement Directorate while relying on the short counter affidavit filed by the Directorate of Enforcement submits that by means of the instant application the petitioner has clubbed two separate cases and separate cause of actions pertaining to 2 separate cases of PMLA and the same is not maintainable. 11. It is vehemently submitted that the summons which have been issued to the petitioner have been issued by the Enforcement Directorate in exercise of power contained under Section 50 of P.M.L.A. and the same has been issued in furtherance of 2 ECIRs thus the present application under Section 482 Cr.P.C. is not maintainable in view of the law laid down by the Full Bench in Ram Lal Yadav and others Vs. State of U.P. and others reported in MANU/U.P./0576/1989. 12. It is further submitted that at this point of time it is neither clear nor decided whether the applicant has been summoned as an accused or simply as a witness in the cases which are under investigation and the same depends upon the outcome of the investigation /interrogation of the petitioner and any judicial intervention at this stage is likely to create a hurd....
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....h Court in Virbhadra Singh Vs. Enforcement Directorate (MANU/DE/1813/2015), it is observed that writ petition cannot be entertained at the stage of summons. While relying on the law laid down by the Privy Council in Emperor v. Khwaja Nazir Ahmed (1945) 47 BOMLR 245, it is submitted that the department is having a statutory right to investigate the ECIR (FIR). 17. Learned counsel for the Enforcement Directorate has placed reliance on the following case laws:- (i) Ram Lal Yadav and others Vs. State of U.P. and others reported in MANU/U.P./0576/1989. (ii) Dukhishyam Benupani, Assistant Director, Enforcement Directorate (FERA) Vs. Arun Kumar Bajoria reported in (1998)1 SCC 52. (iii) Mr. Talib Hasan Darvesh Vs. The Directorate of Enforcement passed in W.P. (Crl.) 780/2024, CRL. M.A.7287/ 2024, Decided on 13.3.2024. (iv) Kirit Shrimankar Vs. Union of India reported in (2018) 12 SCC 651. (v) C.M. Raveendran Vs. Union of India and Assistant Director Enforcement Directorate passed on W.P. (C) No. 28049 of 2020 (E), Decided on 17.12.2020. 18. Having heard learned counsel for the parties and having perused the record, it is reflected that aga....
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....au of Investigation. The first one contained allegations against two persons, viz., Malik and Mehra under Section 120B of the Indian Penal Code read with Sections 406 and 420 thereof wherein the CBI filed a chargesheet. Later on, however, some subsequent events emerged resulting in lodging the FIR not only against Malik and Mehra but also against Narang and his two brothers. This Court opined: The offences alleged in the first case were Section 120B read with Section 420 and Section 406 IPC, while the offences alleged in the second case were Section 120B read with Section 411 IPC and Section 25 of the Antiquities and Art Treasures Act, 1972. It is true that the Antiquities and Art Treasures Act had not yet come into force on the date when the FIR was registered. It is also true that Omi Narang and Manu Narang were not extradited for the offence under the Antiquities and Art Treasures Act, and, therefore, they could not be tried for that offence in India. But the question whether any of the accused may be tried for a contravention of the Antiquities and Art Treasures Act or under the corresponding provision of the earlier Act is really irrelevant in deciding whether the two....
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....of Articles 20(3) and 21 of the Constitution opined as under :- "SECTION 50 OF THE 2002 ACT 150. The validity of this provision has been challenged on the ground of being violative of Articles 20(3) and 21 of the Constitution. For, it allows the authorised officer under the 2002 Act to summon any person and record his statement during the course of investigation. Further, the provision mandates that the person should disclose true and correct facts known to his personal knowledge in connection with the subject matter of investigation. The person is also obliged to sign the statement so given with the threat of being punished for the falsity or incorrectness thereof in terms of Section 63 of the 2002 Act. Before we proceed to analyse the matter further, it is apposite to reproduce Section 50 of the 2002 Act, as amended. The same reads thus: 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 matter....
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....of commission and omission by the banking companies, financial institutions and intermediaries. From the setting in which Section 50 has been placed and the expanse of empowering the Director with same powers as are vested in a civil Court for the purposes of imposing fine Under Section 13, is obviously very specific and not otherwise. 153. Indeed, Sub-section (2) of Section 50 enables the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to issue summon to any person whose attendance he considers necessary for giving evidence or to produce any records during the course of any investigation or proceeding under this Act. We have already highlighted the width of expression "proceeding" in the earlier part of this judgment and held that it applies to proceeding before the Adjudicating Authority or the Special Court, as the case may be. Nevertheless, Sub-section (2) empowers the authorised officials to issue summon to any person. We fail to understand as to how Article 20(3) would come into play in respect of process of recording statement pursuant to such summon which is only for the purpose of collecting information or evidence in respect o....
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....and such evidence can be furnished through the lips or by production of a thing or of a document or in other modes. So far as production of documents is concerned, no doubt Section 139 of the Evidence Act says that a person producing a document on summons is not a witness. But that Section is meant to regulate the right of cross-examination. It is not a guide to the connotation of the word "witness", which must be understood in its natural sense, i.e., as referring to a person who furnishes evidence. Indeed, every positive volitional act which furnishes evidence is testimony, and testimonial compulsion connotes coercion which procures the positive volitional evidentiary acts of the person, as opposed to the negative attitude of silence or submission on his part. Nor is there any reason to think that the protection in respect of the evidence so procured is confined to what transpires at the trial in the court room. The phrase used in Article 20(3) is "to be a witness" and not to "appear as a witness". It follows that the protection afforded to an Accused in so far as it is related to the phrase "to be a witness" is not merely in respect of testimonial compulsion in the court room bu....
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....ised officials can certainly proceed against him for his acts of commission or omission. In such a situation, at the stage of issue of summons, the person cannot claim protection Under Article 20(3) of the Constitution. However, if his/her statement is recorded after a formal arrest by the ED official, the consequences of Article 20(3) or Section 25 of the Evidence Act may come into play to urge that the same being in the nature of confession, shall not be proved against him. Further, it would not preclude the prosecution from proceeding against such a person including for consequences Under Section 63 of the 2002 Act on the basis of other tangible material to indicate the falsity of his claim. That would be a matter of Rule of evidence. 162. It is, thus, clear that the power invested in the officials is one for conducting inquiry into the matters relevant for ascertaining existence of proceeds of crime and the involvement of persons in the process or activity connected therewith so as to initiate appropriate action against such person including of seizure, attachment and confiscation of the property eventually vesting in the Central Government. 163. We are consci....
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....n a case. 22. In the case of Commissioner of Customs, Calcutta v. M.M. Exports (2010) 15 SCC 647, the Hon'ble Apex Court, while dealing with a case of issuance of summons under Section 108 of Customs Act, had expressed that except in exceptional cases, High Courts should not interfere at the stage of issuance of summons. 23. In Poolpandi and Ors. vs. Superintendent, Central Excise and Ors. (14.05.1992 - SC) : MANU/SC/0339/1992, while discussing the question as to whether the petitioners, who are required to be questioned during the investigation under the provisions of the Customs Act, 1962 and the Foreign Exchange Regulation Act, 1973 are entitled to the presence of their lawyers during such questioning, Apex Court opined as under:- "11. We do not find any force in the arguments of Mr. Salve and Mr. Lalit that if a person is called away from his own house and questioned in the atmosphere of the customs office without the assistance of his lawyer or his friends his constitutional right under Article 21 is violated. The argument proceeds thus: if the person who is used to certain comforts and convenience is asked to come by himself to the Department for answering ....
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.... case cannot be faulted. The ECIR may contain details of the material in possession of the Authority and recording satisfaction of reason to believe that the person is guilty of money-laundering offence, if revealed before the inquiry/investigation required to proceed against the property being proceeds of crime including to the person involved in the process or activity connected therewith, may have deleterious impact on the final outcome of the inquiry/investigation. So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution. Moreover, the arrested person before being produced before the Special Court within twenty-four hours or for that purposes of remand on each occasion, the Court is free to look into the relevant records made available by the Authority about the involvement of the arrested person in the offence of money-laundering. In any case, upon filing of the complaint before the statutory period provided in 1973 Code, after arrest, the person would get all relevant materials forming part of the complaint filed by the Authority Under Section 44(1)(b) of the 2002 Act before the Special C....
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....t 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. Sub-clause (3) stipulates that 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 examined or make statements, and produce such documents as may be required. Section 50(1)(b) of the Act stipulates that enforcing the attendance of any person, including any officer of a reporting entity and examining him on oath.The very object of the provision is unambiguously enumerated in Section 50 of the "PMLA" states that the Director for the purpose of Section 12 shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, while trying a suit in respect of the matters stipulated. Therefore, enforcing the attendance of any person is certainly permissible for the purpose of proceeding with the investigation. Sub-clause (3) to Section 50 states that the persons who received such summons from the competent ....
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....vestigation and with built-in safeguards to ensure fairness, transparency and accountability at all stages. The powers conferred on the enforcement officers for purposes of complete and effective investigation include the power to summon and examine "any person". 27. 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 summons issued under Section 50 PMLA on the ground that there is a possibility that he may be arrested in the future. The investigation in the present ECIR,S are still continuing and the petitioner has only been summoned to appear and submit certain documents which may be in his possession as he had been an employee of the Companies under scanner, thus the petitioner's prayer for quashing of ECIR'S itself is premature as at this stage even the status of the applicant before the ED is not known and the same is in the realm of future. 28. The copy of ECI....