PMLA Rules Of Summoning Prevails Over CrPC Provisions: Supreme Court Dismisses TMC MP Abhishek Banerjee's Plea Challenging ED Summons

The Supreme Court has dismissed the appeal preferred by MP (Member of Parliament) Abhishek Banerjee, TMC (All India Trinamool Congress) seeking quashing of summons issued by the Enforcement Directorate (ED) under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA).

The Court held that the procedure prescribed under the Prevention of Money Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention) Rules, 2005 for summoning the person under sub-sections (2) and (3) of Section 50 of PMLA,  would prevail over any other procedure prescribed under the Code.

The Court was dealing with the appeals challenging the order of the Delhi High Court by which it dismissed the petitions filed by Abhishek and his wife Rujira Banerjee.

The two-Judge Bench comprising Justice Bela M. Trivedi and Justice Satish Chandra Sharma observed, “… the Authorities referred to in Section 48 of PMLA are not the Police Officers as held in Vijay Madanlal. It has been specifically laid down in the said decision that the statements recorded by the Authorities under Section 50 of PMLA are not hit by Article 20(3) or Article 21 of the Constitution, rather such statements recorded by the authority in the course of inquiry are deemed to be the Judicial proceedings in terms of Section 50(4), and are admissible in evidence, whereas the statements made by any person to a Police Officer in the course of an investigation under Chapter XII of the Code could not be used for any purpose, except for the purpose stated in the proviso to Section 162 of the Code. In view of such glaring inconsistencies between Section 50 PMLA and Section 160/161 Cr.P.C, the provisions of Section 50 PMLA would prevail in terms of Section 71 read with Section 65 thereof.”

The Bench said that the process envisaged by Section 50 of the PMLA is in the nature of an inquiry against the proceeds of crime and is not ‘Investigation’ in strict sense of the term for initiating prosecution.

Senior Advocates Kapil Sibal, Abhishek Manu Singhvi, and Gopal Sankaranarayanan appeared for the appellants (accused) while Senior Advocate S.V. Raju appeared for the respondent (ED).

Factual Background -

In 2020, an FIR was registered by the Central Bureau of Investigation (CBI) for the offences under Sections 120B and 409 of the Indian Penal Code (IPC) and Sections 13(2) read with 13(1)(a) of the Prevention of Corruption Act, 1988 (PC Act) in respect of an alleged illegal excavation and theft of Coal taking place in the leasehold areas of Eastern Coalfields Limited (ECL). During the investigation, a large number of vehicles and equipments used in the illegal coal mining and its transportation were seized. It was also found that the said case involved money laundering to the tune of Rs. 1300 Crores. One of the accused was arrested and another accused Inspector was arrested thereafter, who had allegedly become part of illegal Coal mafia and had helped in laundering several hundred crores of rupees.

It was also found that the accused Inspector had allegedly received Rs. 168 crores from the co-accused to be delivered to his political bosses. Therefore, ED issues summons to Abhishek Banerjee seeking his personal appearance in New Delhi with the documents sought for. His wife Rujira was also issued summons, however, both did not remain present as directed and furnished respective replies, seeking time to comply with the same. The appellants (accused) challenged the summons issued by ED before the High Court but it dismissed their pleas. Being aggrieved, they were before the Apex Court.

The Supreme Court in view of the facts and circumstances of the case noted, “Apart from the fact that Section 50 is a gender neutral, as it does not make any distinction between a man and a woman, there are glaring inconsistencies between the provisions contained in Section 50 of PMLA and Section 160/161 of Cr.P.C. The Chapter XII of Cr.P.C. pertains to the “Information to the Police and their Powers to Investigate”. Section 160 which falls under Chapter XII empowers the Police Officer making an investigation under the said Chapter to require any person to attend within the limits of his own or adjoining station who, from the information given or otherwise appears to be acquainted with the facts and circumstances of the case”

The Court elucidated that there being specific procedure prescribed under the Statutory Rules of 2005 for summoning the person under sub-sections (2) and (3) of Section 50 of PMLA, the same would prevail over any other procedure prescribed under the Code, particularly the procedure contemplated in Section 160/161, as also the procedure for production of documents contemplated in Section 91 of the Code, in view of the overriding effect given to the PMLA over the other Acts including the CrPC under Section 71 read with Section 65 of the PMLA.

“The consequences of Article 20(3) of the Constitution or Section 25 of the Evidence Act may come into play only if the involvement of such person (noticee) is revealed and his or her statements is recorded after a formal arrest by the ED official”, it added.

The Court, therefore, did not find any illegality in the summons issued by the respondent-ED summoning the appellants to its Office at Delhi, which also has the territorial jurisdiction, a part of the offence having been allegedly committed by the accused persons as alleged in the complaint.

“In that view of the matter, we do not find any substance in the challenge made by the Appellants to the Summons issued to the Appellants under Section 50 of the PMLA. As contemplated in the sub-section (3) of Section 50, all the persons summoned are bound to attend in person or through authorized agents as the officer may direct and are bound to state the truth upon any subject respecting which they are examined or make statements, and to produce the documents as may be required”, it remarked.

The Court further emphasised that as per sub-section (4) thereof every proceeding under sub-sections (2) and (3) is deemed to be a Judicial proceeding within the meaning of Section 193 and Section 228 of the IPC and as per sub-section (4) of Section 63, a person who intentionally disobeys any direction issued under Section 50 is liable to be proceeded against under Section 174 of the IPC.

Accordingly, the Apex Court dismissed the appeals.

Cause Title- Abhishek Banerjee & Anr. v. Directorate of Enforcement (Neutral Citation: 2024 INSC 668)

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