Abhishek Banerjee vs Directorate Of Enforcement on 9 September, 2024

Supreme Court of India

Abhishek Banerjee vs Directorate Of Enforcement on 9 September, 2024

Author: Bela M. Trivedi

Bench: Bela M. Trivedi

2024 INSC 668                                                                     REPORTABLE

                                      IN THE SUPREME COURT OF INDIA
                                     CRIMINAL APPELLATE JURISDICTION

                                  CRIMINAL APPEAL No(s). 2221-2222 OF 2023


             ABHISHEK BANERJEE & ANR.                                          …APPELLANT(S)


                                                           VERSUS


             DIRECTORATE OF ENFORCEMENT                                     …RESPONDENT(S)



                                                 JUDGMENT

BELA M. TRIVEDI, J.

1. Both these Appeals are arising out of the Common Impugned Order

dated 11.03.2022 passed by the High Court of Delhi in W.P (Crl.) No.

1808 of 2021 and Crl. M.C. No. 2442 of 2021, filed by the Appellants

(Original Petitioners), whereby the High Court has dismissed the same.

2. The Writ Petition (Crl.) No. 1808 of 2021 was filed by the Appellants –

Abhishek Banerjee and Rujira Banerjee seeking quashing of the

Summons dated 10.09.2021 issued to them by the Respondent – ED
Signature Not Verified

Digitally signed by
under Section 50 of the Prevention of Money Laundering Act, 2002
Nisha Khulbey
Date: 2024.09.09
10:59:21 IST

(hereinafter referred to as the “PMLA”), and seeking further direction
Reason:

against the Respondent not to issue any Summons under Section 50 of

the said Act to the Appellants for their appearance in New Delhi, rather

than their hometown/ place of domicile i.e. Kolkata. The Crl. M.C. No.

2442 of 2021 was filed by the Appellant – Rujira Banerjee seeking

quashing of the Complaint dated 13.09.2021 filed by the respondent-ED

against her for the offence under Section 174 of India Penal Code (IPC),

and for quashing the Order dated 18.09.2021 passed by the Chief

Metropolitan Magistrate (CMM), Patiala House, New Delhi taking

cognizance of the complaint, as also the Order dated 30.09.2021

summoning her, passed by the said Court.

3. The facts in the nutshell are that an FIR/R.C. bearing No.

RC0102020A0022 came to be registered by the CBI, ACB, Kolkata on

27.11.2020 for the offences under Section 120B and 409 of IPC and

Section 13(2) r/w 13(1)(a) of the Prevention of Corruption Act, 1988

(hereinafter referred to as the “PC Act”), in respect of alleged illegal

excavation and theft of Coal taking place in the leasehold areas of

Eastern Coalfields Limited (ECL) by one Anup Majee alias Lala with the

active connivance of certain employees of ECL. Based on the said FIR,

on 28.11.2020, an ECIR bearing No. 17/HIU/2020 came to be registered

by the Respondent at their Head Investigative Unit situated at New

Delhi.

4. During the course of investigation of the FIR in respect of theft of Coal

and illegal excavation being done by the criminal elements in the

leasehold area of ECL, a large number of vehicles/ 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. According to the Respondent – ED one of the accused

Vikas Mishra was arrested on 16.03.2021 and another accused

Inspector Ashok Mishra of Bankura Police Station was arrested on

03.04.2021, who had become part of illegal Coal mafia and had helped

in laundering several hundred crores of rupees. It was also found during

the course of investigation that Inspector Ashok Kumar Mishra had

allegedly received Rs.168 crores in just 109 days from the co-accused

Anup Majee, to be delivered to his political bosses including co-accused

Vinay Mishra. The said Rs.168 crores were allegedly transferred

through vouchers to Delhi and Overseas.

5. On 22.07.2021, the Respondent issued Summons to the Appellant No.1

under Section 50 of PMLA seeking his personal appearance on

03.08.2021 in New Delhi with the documents sought for. Again on

04.08.2021, another Summons were issued to the Appellant No.1

seeking the same documents as sought in Summons dated 22.07.2021

for remaining present on 12.08.2021 in New Delhi. The Appellant No.2

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was also issued Summons on 04.08.2021 under Section 50 of PMLA for

her personal appearance in New Delhi on 13.08.2021 along with the

documents/records stated in the said Summons. Both the Appellants did

not remain present as directed and furnished their respective replies on

12.08.2021 seeking time to comply with the said Summons. The

Respondent again issued Summons on 18.08.2021 requiring the

Appellant No.1 to remain present in New Delhi on 06.09.2021 and

Appellant No.2 to remain present in New Delhi on 01.09.2021. The

Appellant No.2 replied to the Summons dated 18.08.2021 requesting

the Respondent to examine her at Kolkata as there was a functional

office of the Respondent in Kolkata and the alleged cause of action had

arisen in West Bengal. The Appellant No.1 in due compliance to the

Summons dated 18.08.2021 appeared before the Respondent – ED on

06.09.2021 at New Delhi, however he was again issued Summons on

the same day seeking his personal appearance along with the

documents in New Delhi on 08.09.2021. The Appellant No.1 did not

appear before the respondent however, submitted a reply on

08.09.2021 requesting for four weeks’ time to collect and collate the

documents sought. The Appellant No.1 was further served with another

Summons dated 10.09.2021 seeking his appearance in New Delhi on

21.09.2021. The said summons came to be challenged by the

appellants by filing the W.P. (Crl.) No.1808/2021 before the High Court.
4

6. On 13.09.2021, the Respondent filed a Complaint against the Appellant

No.2 in the Court of Chief Metropolitan Magistrate, Patiala House, New

Delhi under Section 190 (1)(a) r/w Section 200 Cr.P.C. r/w Section 63(4)

PMLA, alleging the commission of the offence under Section 174 of IPC

for non-compliance of the Summons dated 04.08.2021 and 18.08.2021.

The said Court vide the Order dated 18.09.2021 took cognizance of the

impugned offence and issued Summons to the Appellant No.2 for her

personal appearance on 30.09.2021. The Appellant No.2 on 30.09.2021

appeared virtually and sought exemption from personal appearance.

The Learned CMM passed an Order allowing the exemption application

for that day only, and directed the Appellant No.2 to remain personally

present before the Court on 12.10.2021. The said complaint filed by the

respondent and the said orders passed by the CMM Court came to be

challenged by the Appellant Rujira by filing the Crl. M.C No. 2442 of

2021 before the High Court.

7. As stated earlier, both the W.P. (Crl.) No.1808/2021 and Crl. M.C.

No.2442/2021 came to be dismissed by the High Court vide the

impugned order.

8. The Learned Senior Counsel Mr. Kapil Sibal, appearing for the Appellant

No.1 – Abhishek Banerjee made lengthy submissions, the crux of which

may be stated as under: –

i. Section 50 of the PMLA merely indicates the substantive power of

ED to summon but does not provide the procedure for exercise of

such power.

ii. The procedure relating to territoriality of investigation, or power to

summon sick, or infirm/ women/ children and record their

statements has not been provided under Section 50 PMLA, as it is

provided under Section 160 and 161 Cr.P.C.

iii. Power without guidance for manner in which it is to be exercised

could not be said to be fair, just and reasonable procedure

established by law under Article 21 of the Constitution.

iv. A combined reading of Section 4(2) Cr.P.C. and Section 65 PMLA

would show that the application of the Code is not barred as long

as the provisions of the Code are consistent with the PMLA.

v. The Judgment of this Court in Vijay Madanlal Choudhary and

Others vs. Union of India and Others1 has not dealt with the issue

of procedure for summoning under Section 50 of the PMLA.

vi. The Cr.P.C. provides that the existence of the territorial nexus to the

commission of a crime is a jurisdictional threshold for the exercise

of powers of investigation by a police officer. However, the

Respondent – ED has not demonstrated as to how it could be

1 (2022) SCC OnLine SC 929

6
prejudiced by calling the Appellant No.1 to its office in Kolkata

where the ED has the Zonal Office.

vii. The Department of Revenue, Ministry of Finance has issued

administrative instructions consistent with Section 51 of PMLA that

demarcate the specific territorial jurisdiction of various Zonal

Offices of the ED. The said instructions must be strictly complied

with by the ED in consonance with Article 21 of the Constitution of

India.

viii. The Appellant No.1 is a permanent resident of Kolkata and being

Member of Parliament has a residence in Delhi, which however

does not alter his permanent residence at Kolkata.

ix. Section 91 of Cr.P.C. only deals with summons for production of

documents, whereas the summons issued to the Appellant No.1

under PMLA are for personal appearance before the Respondent

at New Delhi is nothing but an abuse of process of law.

9. In addition to the above submissions, Learned Senior Counsel Mr.

Abhishek Manu Singhvi along with Learned Senior Counsel Mr. Gopal

Sankaranarayanan appearing for the Appellant No.2 broadly made

following submissions: –

i. The Appellant No.2 has been summoned to appear in New Delhi

despite she being a home maker and a mother of two children. The

ED has created Zonal Offices and has an office at Kolkata.

Therefore, summoning the Appellant No.2 in Delhi is illegal and

reeks mala fide.

ii. The Appellant No.2 is neither an accused in the predicate offence

nor in the money laundering offence.

iii. Protection of woman provided under Section 160 of Cr.P.C would

be applicable to the PMLA also.

iv. Section 65 of PMLA makes provisions of Cr.P.C. applicable in so

far as they are not inconsistent with the provisions of PMLA with

regard to arrest, search and seizure, attachment, confiscation,

investigation, prosecution and all other proceedings under the said

Act. Therefore, in the absence of any specific procedure for

summoning of witnesses the Cr.P.C. will apply.

v. Article 21 of the Constitution provides that a person’s life and liberty

can be curtailed by State only in accordance with the procedure

established by law, and therefore the procedure for Summons

curtailing the right of the Appellant No.2 to life and liberty must be

just and reasonable.

10. The Learned Senior Counsel, Mr. S.V. Raju also made elaborate

submissions on behalf of the Respondent – ED which may be

summarized as under: –

i. Section 91 Cr.P.C. neither encompasses any territorial jurisdictional

limit nor does it contain any proviso for women, minors or elderly
8
akin to Section 160 Cr.P.C. A police officer has to resort to Section

91 Cr.P.C. to mandate the provision of any document. Hence,

Section 91 Cr.P.C. cannot be equated with the powers under

Section 50 of PMLA.

ii. Section 160 Cr.P.C. applies to a Police Officer who is making an

investigation under Chapter XII of Cr.P.C., whereas the process

envisaged by Section 50 of PMLA is in the nature of an inquiry and

is not an Investigation in the strict sense of the term as held in case

of Vijay Madanlal (supra).

iii. ED has the power to summon any person whose attendance is

considered necessary whether to give evidence or to produce any

record as contemplated in Section 50 of the PMLA. A statement

made under Section 50 is admissible in evidence, whereas the

statement made under Section 161 is inadmissible as provided

under Section 162 Cr.P.C.

iv. There are stark inconsistencies between Section 50 PMLA and

Section 160 Cr.P.C., and therefore Section 160 Cr.P.C would not

apply to the proceedings under Section 50 of PMLA.

v. The procedure to exercise power under Section 50 PMLA is laid

down in the Rules called the Prevention of Money Laundering

(Forms, Search and Seizure or Freezing and the Manner of

Forwarding the Reasons and Material to the Adjudicating Authority,
9
Impounding and Custody of Records and the Period of Retention)

Rules, 2005.

vi. The Appellant No.1 had attempted to mislead the Court by

suppressing the fact that he had residence in New Delhi also.

vii. The statement made under Section 50 of PMLA would not infringe

any fundamental right of the person contained in Article 20(3)

inasmuch as the person making the statement is not an accused at

the time when the statement under Section 50 is recorded.

viii. As regards territorial jurisdiction, it is submitted in the alternative

that as per the case of ED, the proceeds of crime to the tune of

Rs.168 Crores were transferred through vouchers to Delhi and

Overseas, and therefore, there was adequate nexus with the

territory of Delhi with the alleged offence. Even a prosecution

complaint could have been filed in Delhi, which would be consistent

with the law laid down by this Court in Rana Ayyub vs. Directorate

of Enforcement2.

ix. The Regional Offices created in the Directorate of Enforcement are

for administrative convenience and do not in any manner limit the

2 (2023) 4 SCC 357

10
scope of enquiry of those concerned offices or officers, if the

offence of money laundering spreads over multiple States.

x. Section 5 r/w Section 4 (2) of Cr.P.C. itself contemplates that

nothing contained in the Code of 1973 would apply or affect any

special law in force regulating the manner of place of investigation,

inquiring into or dealing with such special offences.

xi. There was no illegality in summoning the Appellant No.2 to New

Delhi, as according to the ED the proceeds of crime had travel to

New Delhi, which would be the area in which part of the offence has

been allegedly committed.

xii. Section 50 of PMLA is gender neutral as it does not make any

distinction between a man and a woman. The Court cannot carve

out an exception in favour of women in Section 50, when there is

none. Whenever the legislature felt the need to carve out an

exception in favour of women, it has done so as evident from the

proviso to Section 45 of PMLA. Therefore, there cannot be any

presumption that a casus omissus exists in Section 50.

11. For the sake of convenience, let us refer to some of the provisions of

Cr.P.C and PMLA, relevant for the purpose of deciding these Appeals,

as also relied upon by the learned counsels for the parties.

11
Relevant Provisions of Cr.P.C.:

4. Trial of offences under the Indian Penal Code and other
laws. —
(1) All offences under the Indian Penal Code (45 of 1860) shall
be investigated, inquired into, tried, and otherwise dealt with
according to the provisions hereinafter contained.

(2) All offences under any other law shall be investigated,
inquired into, tried, and otherwise dealt with according to the
same provisions, but subject to any enactment for the time being
in force regulating the manner or place of investigating, inquiring
into, trying or otherwise dealing with such offences.

5. Saving. —Nothing contained in this Code shall, in the absence
of a specific provision to the contrary, affect any special or local
law for the time being in force, or any special jurisdiction or power
conferred, or any special form of procedure prescribed, by any
other law for the time being in force.

91. Summons to produce document or other thing. —
(1) Whenever any Court or any officer in charge of a police station
considers that the production of any document or other thing is
necessary or desirable for the purposes of any investigation,
inquiry, trial or other proceeding under this Code by or before
such Court or officer, such Court may issue a summons, or such
officer a written order, to the person in whose possession or
power such document or thing is believed to be, requiring him to
attend and produce it, or to produce it, at the time and place
stated in the summons or order.

(2) Any person required under this section merely to produce a
document or other thing shall be deemed to have complied with
the requisition if he causes such document or thing to be
produced instead of attending personally to produce the same.
(3) Nothing in this section shall be deemed—

(a) to affect sections 123 and 124 of the Indian Evidence Act,
1872 (1 of 1872), or the Bankers’ Books Evidence Act, 1891 (13
of 1891), or

(b) to apply to a letter, postcard, telegram or other document or
any parcel or thing in the custody of the postal or telegraph
authority.

160. Police officer’s power to require attendance of
witnesses. —
(1) Any police officer making an investigation under this Chapter
may, by order in writing, require the attendance before himself of
any person being within the limits of his own or any adjoining
station who, from the information given or otherwise, appears to
be acquainted with the facts and circumstances of the case; and
such person shall attend as so required:

Provided that no male person [under the age of fifteen years or
above the age of sixty-five years or a woman or a mentally or
physically disabled person] shall be required to attend at any
place other than the place in which such male person or woman
resides.

(2) The State Government may, by rules made in this behalf,
provide for the payment by the police officer of the reasonable
expenses of every person, attending under sub-section (1) at any
place other than his residence.”

Relevant Provisions of PMLA:

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 matters,
namely: —

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer
of a banking company or a financial institution or a company, and
examining him on oath;

(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.

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(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 examined or make statements, and produce such
documents as may be required.

(4) Every proceeding under sub-sections (2) and (3) shall be
deemed to be a judicial proceeding within the meaning of section
193 and section 228 of the Indian Penal Code (45 of 1860).
(5) Subject to any rules made in this behalf by the Central
Government, any officer referred to in sub-section (2) may
impound and retain in his custody for such period, as he thinks
fit, any records produced before him in any proceedings under
this Act: Provided that an Assistant Director or a Deputy Director
shall not—

(a) impound any records without recording his reasons for so
doing; or

(b) retain in his custody any such records for a period exceeding
three months, without obtaining the previous approval of the
Director.

51. Jurisdiction of Authorities. —
(1) The authorities shall exercise all or any of the powers and
perform all or any of the functions conferred on, or, assigned, as
the case may be, to such authorities by or under this Act or the
rules framed thereunder in accordance with such directions as
the Central Government may issue for the exercise of powers
and performance of the functions by all or any of the authorities.
(2) In issuing the directions or orders referred to in sub-section
(1), the Central Government may have regard to any one or more
of the following criteria, namely: —

(a) territorial area;

(b) classes of persons;

(d) any other criterion specified by the Central Government in this
behalf

63. Punishment for false information or failure to give
information, etc.—
(I) Any person wilfully and maliciously giving false information
and so causing an arrest or a search to be made under this Act
shall on conviction be liable for imprisonment for a term which

14
may extend to two years or with fine which may extend to fifty
thousand rupees or both.

(2) If any person,—

(a) being legally bound to state the truth of any matter relating to
an offence under section 3, refuses to answer any question put
to him by an authority in the exercise of its powers under this Act;
or

(b) refuses to sign any statement made by him in the course of
any proceedings under this Act, which an authority may legally
require to sign; or

(c) to whom a summon is issued under section 50 either to attend
to give evidence or produce books of account or other documents
at a certain place and time, omits to attend or produce books of
account or documents at the place or time,
he shall pay, by way of penalty, a sum which shall not be less
than five hundred rupees but which may extend to ten thousand
rupees for each such default or failure.

(3) No order under this section shall be passed by an authority
referred to in sub-section (2) unless the person on whom the
penalty is proposed to be imposed is given an opportunity of
being heard in the matter by such authority.

(4) Notwithstanding anything contained in clause (c) of sub-
section (2), a person who intentionally disobeys any direction
issued under section 50 shall also be liable to be proceeded
against under section 174 of the Indian Penal Code (45 of 1860).

65. Code of Criminal Procedure, 1973 to apply. —The
provisions of the Code of Criminal Procedure, 1973 (2 of 1974)
shall apply, in so far as they are not inconsistent with the
provisions of this Act, to arrest, search and seizure, attachment,
confiscation investigation, prosecution and all other proceedings
under this Act.

71. Act to have overriding effect. —The provisions of this Act
shall have effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force.

12. In exercise of the powers conferred by sub-Section (1) read with clause

(a), clause (m), clause (n), clause (o), clause (pp) and clause (w) of sub-

section (2) of Section 73 of the PMLA, 2002, the Central Government
15
has also framed the Rules called “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”. As per

Rule 11 of the said Rules, the Summoning Officer, while exercising the

powers under sub-section (2) and (3) of Section 50 of the PMLA, has to

issue Summons in Form V, appended to the said Rules. Rule 11 of the

said Rules reads as under: –

“Rule 11: – Forms of records. – The Summoning Officer shall,
while exercising powers under sub-sections (2) and (3) of Section
50 of the Act, issue summons in Form V appended to these
rules.”

13. At the outset, it may be noted that as well settled by now, the provisions

of PMLA are not only to investigate into the offence of money laundering

but more importantly to prevent money laundering and to provide for

confiscation of property derived from or involved in money laundering

and the matters connected therewith and incidental thereto. As held by

the Three-Judge Bench in Vijay Madanlal (supra), the PMLA is a self-

contained Code and the dispensations envisaged thereunder, must

prevail in terms of Section 71 thereof, which predicates that the

provisions of the Act shall have effect notwithstanding anything

inconsistent therewith contained in any other law for the time being in

force, which includes provisions of the Cr.P.C. The Section 65 of the Act

16
predicates that the provisions of the Cr.P.C. shall apply insofar as they

are not inconsistent with the provisions of the PMLA in respect of arrest,

search and seizure, attachment, confiscation, investigation, prosecution

and all other proceedings under the Act. It is pertinent to note that

Section 4(2) of the Code states that all offences under any other law

shall be investigated, inquired into, tried, and otherwise dealt with

according to the same provisions but subject to any enactment for the

time being in force regulating the manner or place of investigating,

inquiring into, trying or otherwise dealing with such offences. Further,

Section 5 of the Code states that nothing contain in the Code shall, in

absence of specific provision to the contrary, affect any special or local

law for the time being in force, or any special jurisdiction or power

conferred, or any special form of procedure prescribed, by any other law

for the time being in force. Thus, having regard to the conjoint reading

of Section 71 and Section 65 of the PMLA as also Section 4(2) and

Section 5 of the Code, there remains no shadow of doubt that the

provisions of PMLA will have the effect notwithstanding anything

inconsistent therewith contained in any other law for the time being in

force, including the provisions of the Cr.P.C.

14. Though, it was sought to be vehemently submitted by the learned

counsels for the appellants that the sweep of Section 160 of Cr.P.C.

would extend to summoning any person irrespective of whether that
17
person is an accused of that offence or a mere witness, the said

submission deserves to be discarded outrightly in view of the specific

observations made by the three-Judge Bench in Vijay Madanlal, to the

effect that the provisions of Chapter XII of the Code (under which

Section 160 falls) do not apply in all respects to deal with information

derived relating to the commission of money laundering offence much

less investigation thereof. The precise observations made by the Court

in Vijay Madanlal, while considering the issue, whether an ECIR could

be equated with an FIR under the 1973 Code or not, are reproduced as

under: –

“456…. Considering the scheme of the 2002 Act, though the
offence of money-laundering is otherwise regarded as
cognizable offence (cognizance whereof can be taken only by the
authorities referred to in Section 48 of this Act and not by
jurisdictional police) and punishable under Section 4 of the 2002
Act, special complaint procedure is prescribed by law. This
procedure overrides the procedure prescribed under 1973 Code
to deal with other offences (other than money-laundering
offences) in the matter of registration of offence and
inquiry/investigation thereof. This special procedure must prevail
in terms of Section 71 of the 2002 Act and also keeping in mind
Section 65 of the same Act. In other words, the offence of money-
laundering cannot be registered by the jurisdictional police who
is governed by the regime under Chapter XII of the 1973 Code.
The provisions of Chapter XII of the 1973 Code do not apply in
all respects to deal with information derived relating to
commission of money-laundering offence much less
investigation thereof. The dispensation regarding prevention of
money-laundering, attachment of proceeds of crime and
inquiry/investigation of offence of money laundering upto filing of
the complaint in respect of offence under Section 3 of the 2002
Act is fully governed by the provisions of the 2002 Act itself. To
wit, regarding survey, searches, seizures, issuing summons,
recording of statements of concerned persons and calling upon
production of documents, inquiry/investigation, arrest of persons
involved in the offence of money-laundering including bail and

18
attachment, confiscation and vesting of property being proceeds
of crime. Indeed, after arrest, the manner of dealing with such
offender involved in offence of money-laundering would then be
governed by the provisions of the 1973 Code – as there are no
inconsistent provisions in the 2002 Act in regard to production of
the arrested person before the jurisdictional Magistrate within
twenty-four hours and also filing of the complaint before the
Special Court within the statutory period prescribed in the 1973
Code for filing of police report, if not released on bail before expiry
thereof.”

15. In view of the above, it is abundantly clear that the dispensation

regarding Prevention of Money Laundering, Attachment of Proceeds of

Crime, and Inquiry/Investigation of offence of Money Laundering

including issuing summons, recording of statements, calling upon

persons for production of documents etc. upto filing of the Complaint in

respect of offence under Section 3 of PMLA is fully governed by the

provisions of the said Act itself. The jurisdictional police who is governed

by the regime of Chapter XII of the Code, can not register the offence of

money laundering, nor can investigate into it, in view of the special

procedure prescribed under the PMLA with regard to the registration of

offence and inquiry/investigation thereof, and that the special procedure

must prevail in terms of Section 71 of the PMLA.

16. 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.

19
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, whereas, 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; and 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.

17. So far as the procedure to be followed by the Summoning Officer while

exercising the powers under sub-section (2) and (3) of Section 50 of the

PMLA is concerned, it is pertinent to note that Rule 11 of the said Rules

2005, requires the Summoning Officer to follow the procedure as

prescribed therein, i.e., to issue Summons in Form V appended to the

said Rules. The said prescribed Form V requires Summoning Officer to

mention not only the Name, Designation and Address of the Summoning

Officer but also the details of the persons summoned as also the

documents sought therein. The foot note of Form V also mentions that

the proceedings shall be deemed to be judicial proceedings within the

meaning of Section 193 and Section 228 of the IPC, and if the person

summoned fails to give evidence as mentioned in the Schedule, he

would be liable to penal proceedings under the Act. Thus, 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

the Act, 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 Cr.P.C. under

Section 71 r/w Section 65 of the PMLA.

18. The submission made on behalf of Learned Counsels for the Appellants

that the conferment of power upon the Authority under Section 50 of

PMLA excluding the procedural safeguards would be contrary to the

standard of “procedure established by law” under Article 21 of the

Constitution, is also thoroughly misconceived. The validity of Section 50

was sought to be challenged in Vijay Madanlal on the ground of being

violative of Article 20(3) and Article 21 of the Constitution and the Court

upholding the validity observed as under: –

“425. 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 of
proceeding under this Act. Indeed, the person so summoned, is
bound to attend in person or through authorised agent and to
state truth upon any subject concerning which he is being
examined or is expected to make statement and produce
documents as may be required by virtue of sub-section (3) of
Section 50 of the 2002 Act….

426 to 430…..

431. In the context of the 2002 Act, it must be remembered that
the summon is issued by the Authority under Section 50 in
connection with the inquiry regarding proceeds of crime which
may have been attached and pending adjudication before the
Adjudicating Authority. In respect of such action, the designated
officials have been empowered to summon any person for
collection of information and evidence to be presented before the
Adjudicating Authority. It is not necessarily for initiating a

22
prosecution against the noticee as such. The power entrusted to
the designated officials under this Act, though couched as
investigation in real sense, is to undertake inquiry to ascertain
relevant facts to facilitate initiation of or pursuing with an action
regarding proceeds of crime, if the situation so warrants and for
being presented before the Adjudicating Authority. It is a different
matter that the information and evidence so collated during the
inquiry made, may disclose commission of offence of money-

laundering and the involvement of the person, who has been
summoned for making disclosures pursuant to the summons
issued by the Authority. At this stage, there would be no formal
document indicative of likelihood of involvement of such person
as an accused of offence of money laundering. If the statement
made by him reveals the offence of money -laundering or the
existence of proceeds of crime, that becomes actionable under
the Act itself. To put it differently, at 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; and in any
case, there would be no formal accusation against the noticee.
Such summons can be issued even to witnesses in the inquiry
so conducted by the authorised officials. However, after further
inquiry on the basis of other material and evidence, the
involvement of such person (noticee) is revealed, the authorised
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.”

19. The above ratio laid down in Vijay Madanlal clinches the contentions

raised by the learned counsels for the appellants with regard to the

provisions of Section 50 being violative of Article 20(3) or Article 21 of

the Constitution, and we need not further elaborate the same, nor do we

need to deal with the decisions of this Court on the said issue which

23
have already been dealt with in Vijay Madanlal. Suffice it to say that

Section 50 enables the authorized Authority to issue summon to any

person whose attendance he considers necessary for giving evidence

or to produce any records during the course of the proceedings under

the Act, and that the persons so summoned is bound to attend in person

or through authorized agent, and to state truth upon the subject

concerning which he is being examined or is expected to make

statement and produce documents as may be required by virtue of sub-

section (3) of Section 50. At the stage of issue of summons, the person

cannot claim protection under Article 20(3) of the Constitution, the same

being not “testimonial compulsion”. At the stage of recording of

statement of a person for the purpose of inquiring into the relevant facts

in connection with the property being proceeds of crime, is not an

investigation for prosecution as such. The summons can be issued even

to witnesses in the inquiry so conducted by the authorized officers. 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. In our opinion, the learned counsels for the

appellants have sought to reagitate the issues which have already been

settled in Vijay Madanlal.

20. Much reliance has been placed by the Learned Counsels for the

Appellants on the Annual Report of Ministry of Finance, GOI, which

according to them has stated about the Organizational Structure of

Directorate of Enforcement, demarcating the territorial jurisdiction of

various Zonal Office of the ED. According to them, such instructions by

the Department of Revenue are for exercise of powers of investigation

by the ED as mandated by Section 51 PMLA and therefore must be

strictly complied with. The said submission also being fallacious cannot

be accepted. Apart from the fact that the document relied upon is an

Annual Report by the Ministry of Finance, showing the Organizational

Structure of the ED, the same could not be construed as the directions

issued by the Central Government for the purpose of exercise of powers

and performance of the functions by the Authorities as contemplated in

Section 51 of the said Act. As stated in the said Report, the said Offices

of the Directorate of Enforcement all over India are set up to ensure that

the Money Laundering offences are investigated in an effective manner

and they act as deterrence for the potential offenders of the Money

Launderers. Pertinently, the Headquarters Investigation Unit (HIU) has

not been restricted to any territorial jurisdiction in the said Organizational

Structure. The present ECIR bearing ECIR/17/HIU/2020 is recorded at

the HIU. Further, as per the specific case of the ED in the complaint,

filed against the accused persons before the Special Court, PMLA,
25
Rouse Avenue Courts, New Delhi, Rs.168 Crores were allegedly

received by the Inspector Ashok Kumar Mishra from the co-accused

Anup Majee to be delivered to his political bosses, and the said Rs. 168

Crores were transferred through vouchers to Delhi and Overseas, which

clearly established adequate nexus of the offence and the offenders with

the territory of Delhi. We therefore do 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. It is also not disputed that the Appellant No.1

being a Member of Parliament has also an official residence at Delhi.

21. 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.

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. As per sub-section (4) of

Section 63, a person who intentionally disobeys any direction issued
26
under Section 50 is liable to be proceeded against under Section 174 of

the IPC.

22. As transpiring from the Status Report submitted by the Deputy Director,

Directorate of Enforcement, New Delhi, pursuant to the Order passed

by this Court on 18.07.2024, the Appellant No.2 – Rujira Banerjee had

not appeared and not produced the documents as required vide the

Summons dated 04.08.2021 and 18.08.2021. The ED therefore had

filed the Complaint in the Court of Chief Judicial Magistrate, Patiala

House Courts, New Delhi against her under Section 63 PMLA r/w

Section 174 IPC. It is also pertinent to note that though the Appellant

No.2 by filing the Crl. M.C. No. 2442 of 2021 before the High Court had

challenged the Order dated 18.09.2021 passed by the said Court taking

cognizance of the said Complaint and the Order dated 30.09.2021

summoning her before the Court, she has not even bothered to produce

the said Orders before this Court in the instant Appeals. Since the said

Complaint is pending before the concerned Court of Chief Judicial

Magistrate, we do not express any opinion on the merits of the said

Complaint. Suffice it to say that we do not find any illegality in the said

orders passed by the concerned court and that the said complaint shall

be proceeded further by the said Court in accordance with law.

23. For the reasons stated above, both the Appeals being devoid of merits

are dismissed.

..…………………………………J.
[BELA M. TRIVEDI]

……………..……………………. J.

[SATISH CHANDRA SHARMA]

NEW DELHI
09.09.2024

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Abhishek Banerjee vs Directorate Of Enforcement on 9 September, 2024

Supreme Court of India