ED’s omnibus-like power to summon anybody without disclosing details of complaint comes under Supreme Court’s scanner

In July last year, a three-judge bench of the Supreme Court had upheld various contested provisions of the Prevention of Money Laundering Act. Less than a year later, the court has taken up the issue again.

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LESS than a year since the passing of a judgment by a three-judge bench of the Supreme Court upholding the wide-ranging powers of the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act, 2002 (PMLA), a coordinate bench of the Supreme Court on Tuesday issued notice to the Union government and the ED on a petition challenging the constitutional validity of Sections 50 and 63 of the Act.

The petition argues that these two Sections allow ED officials to summon any person to record their statement and require them to speak the truth in such a statement, militating against their right against self-incrimination under Article 20(3) of the Constitution.

A three-judge bench comprising Justices S.K. Kaul, Arvind Kumar and Ahsanuddin Amanullah directed the Union government and the ED to file counter affidavits within four weeks. It directed the listing of the matter after six weeks.

The bench was hearing a writ petition filed by Indian National Congress politician Dr Govind Singh, who is presently serving as Leader of the Opposition in the Madhya Pradesh legislative assembly and is a former minister in the Madhya Pradesh government. He has sought the quashing of a summons issued to him by the ED on January 13 this year.

He has contended that the summons to him is cryptic and visibly vague since no details of the enforcement case information report (ECIR) have been provided to him. The ECIR is the ED's equivalent of a police first information report (FIR).

Dr Singh, in his petition filed through advocate-on-record Sumeer Sodhi, has also argued that there is no criminal case against him, and he is not involved in any predicate offence whatsoever. He has alleged that the ED's summons to him is aimed at harassing him and silencing the voice of the opposition.

Regarding the challenge to Section 50 of the PMLA, the petition argues:

• "The PMLA is essentially a criminal law, therefore, the person investigating the commission of an offense under the same would, essentially be police officers. Hence, the proceedings under Section 50 of the PMLA should be considered as an investigation and the safeguards provided under the Code of Criminal Procedure, 1973 and the Constitution of India should most definitely be made available to the person summoned under PMLA.
• Provisions of Section 65 of the PMLA make the provisions of the [Code of Criminal Procedure] applicable to the PMLA, therefore, the safeguards provided under [Code of Criminal Procedure] should be applicable to proceedings under PMLA.

• Provisions of Section 50 PMLA are in direct contravention of the Fundamental Right against self-incrimination enshrined under Article 20(3) of the Constitution of India.
• Petitioner has not been supplied with a copy of the ECIR, nor have any details of the same been provided to the petitioner, therefore, the Petitioner is completely unaware of the scope of the investigation, or the allegations being investigated in relation to which the Petitioner is being called upon by ED. 
• Every citizen of the country has a right to challenge the initiation of any criminal proceedings against him/ her, and hence not providing the Petitioner with any details of the ECIR and/or the predicate offence is an utter violation of the Constitutional and Statutory rights of the Petitioner, as it deprives the Petitioner of his right to appropriately challenge any proceedings initiated against him. Without being aware of such details, it would not even be worthwhile for the Petitioner to join investigation. Non- disclosure of the ECIR or the remit of investigation of the ED would enable a roving and fishing inquiry, which is impermissible in law.
• Not informing the person being summoned as to in which capacity he is being summoned is violative of the Fundamental Rights and scheme of the [Code of Criminal Procedure].

• Every criminal statute must satisfy the test of fair play. There is no procedure in criminal jurisprudence that allows for summoning a person without informing him as to the capacity in which he is being summoned.
• Legislature in its wisdom while enacting [Indian Evidence Act, 1872], and the [Code of Criminal Procedure] incorporated safeguards to ensure that the statements made during the course of investigation would not be an admissible piece of evidence in the trial of the case, whereas the said protection is not available under the provisions of the PMLA."

On the basis of these grounds, Dr Singh, through his counsel, senior advocate Kapil Sibal, has contended that the decision of the court's three-judge bench comprising Justices A.M. Khanwilkar, Dinesh Maheshwari and C.T. Ravikumar on July 27, 2022 in Vijay Madanlal Choudhary versus Union of India is per incuriam and therefore these questions of law need to be decided by a Constitution bench of the court under Article 145(3) of the Constitution.

Upholding Section 50 of the PMLA, the bench, headed by Justice Khanwilkar, had held that the process envisaged under Section 50 is in the nature of an inquiry against the proceeds of crime and is not "investigation" in the strict sense of the term for initiating prosecution, and the ED officials, acting under the PMLA, are not police officers as such. It elaborated that the stage of recording of statement for the purpose of inquiring into the relevant facts in connection with the property being proceeds of crime is, in that sense, not an investigation for prosecution as such; in any case, there would be no formal accusation against the noticee. The bench also said that such summons can be issued even to witnesses in the inquiry so conducted by the ED officials. Thus, the person who is summoned cannot claim the right against self-incrimination under Article 20(3) of the Constitution.

On the supply of ECIR, the bench had held that as per the special mechanism envisaged by the PMLA, an ECIR could not be equated with an FIR under the Code of Criminal Procedure. The bench had accepted the ED's argument that the ECIR is an internal document created by the department before initiating penal action or prosecution against the person involved with a process or activity connected with the proceeds of crime.

A month after Vijay Madanlal Choudhary, a three-judge bench of the court headed by the then Chief Justice of India N.V. Ramana and Justices Maheshwari and Ravikumar (the latter two were part of the bench that gave the unanimous judgment in Vijay Madanlal Choudhary) issued notice to the Union government on a review petition seeking reconsideration of Vijay Madanlal Choudhary. The bench said that in its opinion, at least two aspects of the judgment required reconsideration: non-supply of the ECIR to the accused, and the reversal of the presumption of innocence of the accused.