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The Supreme Court of India has delivered a significant ruling regarding the power of the Enforcement Directorate (ED) to summon individuals under the Prevention of Money Laundering Act (PMLA), 2002. The judgment, dismissing appeals filed by Trinamool Congress MP Abhishek Banerjee and his wife Rujira Banerjee against ED summons, clarifies the precedence of PMLA provisions over the Code of Criminal Procedure, 1973 (CrPC) in matters related to summoning.
The central argument put forth by the petitioners was that the ED could only summon them within the jurisdictional limits of the alleged offense, meaning they could only be summoned in Kolkata and not in New Delhi. They argued that Section 50 of the PMLA outlines the ED's power to summon but lacks details on the procedure for exercising this power. Consequently, they claimed the summons should adhere to the CrPC's procedures, specifically highlighting the proviso to Section 160 CrPC which prohibits summoning women beyond their place of residence.
The Supreme Court, however, rejected this argument, emphasizing the overriding effect of the PMLA over other laws as stated in Section 71 of the Act. The Court pointed to Section 65 of the PMLA, which specifies that the provisions of the CrPC apply only insofar as they don't conflict with the PMLA's provisions regarding arrest, search and seizure, attachment, confiscation, investigation, prosecution, and other related procedures. Additionally, the Court referred to Sections 4(2) and 5 of the PMLA to support its interpretation.
The Court noted that the judgment in Vijay Madanlal Choudhary v. Union of India (2022) had already established that the provisions of Chapter XII of the CrPC (including Section 160) are not applicable to information relating to money laundering offenses. This decision further reinforces the Court's current stance on the PMLA's precedence.
The Court then highlighted several discrepancies between Section 50 of the PMLA and Section 160 of the CrPC, including: Section 50 being gender-neutral while Section 160 is not; Section 160 dealing with 'investigation' while Section 50 addresses 'inquiry'; statements recorded under Section 50 not being subject to Article 20(3) of the Constitution, while statements under Section 160 are inadmissible as evidence except for limited purposes under Section 162. These inconsistencies, the Court argued, further strengthen the PMLA's precedence in matters of summons.
The Court also acknowledged that specific procedures for summoning individuals are outlined in the PMLA Rules, 2005. These rules, being statutory, take priority over any other procedures stipulated in the CrPC, particularly those laid out in Sections 160, 161, and 91. This prioritization is once again attributed to the overriding effect granted to the PMLA under Section 71 in conjunction with Section 65.
The petitioners had also argued that the summoning procedure violated Articles 20 and 21 of the Constitution, but the Court dismissed these claims as the Constitutional validity of Section 50 of the PMLA had already been upheld in the Vijay Madanlal case.
The Court concluded its judgment by highlighting the consequences of disobeying a summons issued under the PMLA. It referenced Sub-section (3) of Section 50, which states that individuals summoned must attend in person or through authorized representatives as directed by the officer and truthfully answer questions or provide documents. It also emphasized Sub-section (4) of Section 50, which declares proceedings under the relevant sections to be judicial proceedings under Sections 193 and 228 of the Indian Penal Code (IPC). Finally, the Court cited Sub-section (4) of Section 63, which states that individuals intentionally disobeying summons are liable to be prosecuted under Section 174 of the IPC.
Therefore, the Court upheld the notice issued by the Court of Chief Judicial Magistrate, Patiala House Courts, New Delhi, against Rujira Banerjee under Section 63 of the PMLA in conjunction with Section 174 of the IPC. This judgment signifies the Supreme Court's commitment to upholding the PMLA's provisions and ensuring the effectiveness of the ED's investigations in money laundering cases.
Source: PMLA Prevails Over CrPC Regarding Procedure For Summoning Persons : Supreme Court