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Supreme Court: PMLA accused exempt from S.45 Conditions when furnishing bonds as per summons

CASE TITLE – Tarsem Lal v. Directorate of Enforcement

CASE NUMBER – CRIMINAL APPEAL NO.2608 OF 2024

DATED ON – 16.05.2024

QUORUM – Justice Abay S. Oka & Justice Ujjal Bhuyan

 

FACTS OF THE CASE

 The Appellants have been denied the benefit of anticipatory bail by the impugned orders. The Hon’ble Supreme Court was dealing with cases of the accused who were not arrested after registration of the Enforcement Case Information Report (ECIR) till the Special Court took cognizance under the PMLA of an offense punishable under Section 4 of the PMLA.  The cognizance was taken on the complaints filed under Section 44 (1)(b). These are the cases where the Appellants did not appear before the Special Court after summons were served to them. The Special Court issued warrants for procuring their presence.   After the warrants were issued, the Appellants applied for anticipatory bail before the Special Court. The applications were rejected. Unsuccessful accused have preferred these appeals since the High Court has turned down their prayers. And the Hon’ble Supreme Court, by interim orders, had protected the Appellants from arrest.

 

LEGAL PROVISIONS

Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, prescribes the procedure to be followed by the arrest authority, the Enforcement Directorate (ED) in money laundering cases.

Section 65 of the Prevention of Money Laundering Act (PMLA), 2002, prescribes that the normal rules for criminal procedure, laid out in the Code of Criminal Procedure (CrPC), apply to investigations, arrests, seizures, and other legal actions taken under the PMLA.

Section 44 of the Criminal Procedure Code (CrPC), 1973, prescribes the powers vested in the Magistrate to make an arrest, and following that, can then decide on bail as per CrPC provisions.

Section 88 of the Criminal Procedure Code (CrPC), 1973, it empowers the court to take a bond for appearance from someone who could be issued a summons or warrant for their presence in court or from someone who is already present in court.

 

CONTENTIONS BY THE PETITIONER

The learned senior counsel, appearing for the Appellants in Criminal Appeal at Special Leave Petition (Crl.) No.121 of 2024 and the learned counsel representing other appellants have made detailed submissions that the power to arrest vesting in the officers of the Directorate of Enforcement (for short, ‘the ED’) under Section 19 of the PMLA cannot be exercised after the Special Court takes cognizance of the offense punishable under Section 4 of the PMLA, and that ff an accused appears according to the summons issued by the Special Court, there is no reason to issue a warrant of arrest against him or to take him into custody. They further stated that there is nothing inconsistent between Section 88 of the Code of Criminal Procedure, 1973 (for short, ‘the CrPC’) and the provisions of the PMLA. On a conjoint reading of Sections 4 and 5 of the CrPC with Section 65 of the PMLA, was of the view that it was apparent that all the provisions of the CrPC would apply to proceedings before the Special Court from the stage of filing a complaint under Section 44 (1)(b). Only those provisions of the CrPC that are inconsistent with the specific provisions of the PMLA will not apply. As there is no inconsistency between Section 88 of the CrPC and the provisions of the PMLA if, after service of summons, the accused offers to furnish bonds for appearance in terms of Section 88 of the CrPC, the Special Court should normally accept the bonds. After furnishing the bonds, if the accused fails to appear before the Special Court, recourse can always be taken by the Special Court to Section 89 by issuing a warrant for procuring the presence of the accused before the Special Court. And noted that once cognizance is taken based on a complaint, the Special Court cannot exercise the power of remand under Section 167 (2) of the CrPC.

CONTENTIONS BY THE RESPONDENT

The Respondent submitted that once an accused appears before the Special Court, he is deemed to be in it’s custody. Though an accused against whom an allegation of commission of an offense punishable under Section 4 of the PMLA is made can apply for the grant of anticipatory bail, such application shall also be governed by the conditions in Section 45 (1). They further contended that money laundering is an offence against the nation. Therefore, taking into consideration the gravity and severity of the offence under the   PMLA, mandatory compliance with the requirements of Section 45 (1) must always be ensured.

 

COURT ANALYSIS AND JUDGEMENT

As the punishment for an offence punishable under Section 4 of the PMLA is of imprisonment for more than three years, in view of clause (x) of Section 2 of the CrPC, the complaint will be treated as a warrant case. Under Section 204(1)(b), the Court can issue either a warrant or summons in a warrant case. Therefore, while taking cognizance, the Special Court has the discretion to issue either a summons or warrant. The Hon’ble Supreme Court also referred to on of it’s previous Judgement, Inder Mohan Goswami & Anr. v. State of Uttaranchal & Ors where it held that as a general rule, unless an accused is charged with an offence of heinous crime and it is feared that he is likely to tamper with or destroy the evidence or evade the process of law, the issue of summons is the rule. This Court held that in a complaint case, at the first instance, the Court should directly serve the summons along with the copy of the complaint. If service is avoided by the accused, initially, a bailable warrant should be issued. If that is not effective, a non­bailable warrant should be issued. The Hon’ble Supreme Court stated that it failed to understand the basis of the submission of the learned ASG that after an accused appears before a Special Court in compliance with the summons, he shall be deemed to be in custody. And noted the object of issuing a summons is to secure the accused’s presence before the Court.  It is not issued for taking an accused in custody. if a bond is not furnished under Section 88 by an accused and if the accused remains absent after that, the Court can always issue a warrant under Section 70 (1) of the CrPC for procuring the presence of the accused before the Court. In both contingencies, when the Court issues a warrant, it is only for securing the accused’s presence before the Court. When a warrant is issued in such a contingency, the accused don’t need to apply for bail. The Hon’ble Supreme Court stated that after cognizance is taken of the offence punishable under Section 4 of the PMLA based on a complaint under Section 44 (1)(b), the ED and its officers are powerless to exercise power under Section 19 to arrest a person shown as an accused in the complaint. And since the Appellants were not arrested by the ED until the complaint was filed, the appeals succeed, subject to some conditions The appellants shall appear before the concerned Special Court within one month from the date of the Judgement and shall file an undertaking before the Special Court that they shall regularly and punctually appear before the Special Court. And further stated that warrants issued against the Appellants shall be cancelled only after one month and held that the grant of the Anticipatory Bail is unnecessary.

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Judgement Reviewed by – Gnaneswarran Beemarao

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