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Sept 13, 2024
PRIMACY OF PMLA OVER CRPC IN SUMMONING PROCEDURE
In a significant judgment of Abhishek Banerjee and Anr. Vs. Directorate of Enforcement, the Supreme Court of India ruled that the provisions of the Prevention of Money Laundering Act (PMLA), 2002, take precedence over the Code of Criminal Procedure (CrPC), 1973, when it comes to summoning individuals. This ruling came in response to an appeal by Trinamool Congress MP Abhishek Banerjee and his wife Rujira Banerjee, who challenged the summons issued by the Enforcement Directorate (“ED”) in connection with a coal scam case.
HISTORICAL OVERVIEW
The Supreme Court dismissed the challenge by Trinamool Congress MP Abhishek Banerjee and his wife Rujira Banerjee against the ED summons to New Delhi in a coal smuggling scam investigation. The petitioners argued that the summons exceeded territorial jurisdiction and that Section 160 of the CrPC, which restricts summoning women beyond their residence, should prevail. However, the Court held that the procedural framework of the PMLA overrides the CrPC in money laundering cases.
PETITIONERS’ ARGUMENTS
The Banerjees contended that they could not be summoned to New Delhi as the alleged offence took place in Kolkata, beyond the territorial limits of their residence. They argued that Section 50 of the PMLA only grants substantive power to summon but does not specify the procedure. Therefore, the petitioners claimed that the procedure for summoning should align with the CrPC, particularly citing Section 160 CrPC, which protects women from being summoned beyond their place of residence.
SUPREME COURT’S FINDINGS
The Supreme Court through a bench comprising two judges, rejected the petitioners’ arguments. The Court held that Section 71 of the PMLA gives it overriding effect over other laws, including the CrPC. Section 65 of the PMLA further clarifies that the CrPC shall only apply where it is not inconsistent with the provisions of the PMLA.
INCONSISTENCIES BETWEEN PMLA AND CRPC
The Court noted several inconsistencies between Section 50 of the PMLA and Sections 160 and 161 of the CrPC. Firstly, Section 50 of the PMLA is gender-neutral, unlike Section 160 of the CrPC. Secondly, Section 160 of the CrPC pertains to “investigation,” while Section 50 of the PMLA deals with “inquiry.” Thirdly, statements recorded under Section 50 of the PMLA are admissible in evidence and not barred by Article 20(3) of the Constitution, whereas statements under Section 160 of the CrPC have limited evidentiary use as per Section 162 of the CrPC. Due to these inconsistencies, the Court held that Section 50 of the PMLA prevails, as per Sections 71 and 65 of the PMLA.
SPECIFIC PROCEDURE UNDER PMLA RULES
The PMLA Rules, 2005, prescribe a specific procedure for summoning individuals under Section 50(2) and (3) of the Act. The Court noted that this procedure overrides the general procedures outlined in the CrPC, including those related to summoning under Section 160 & Section 161 and the production of documents under Section 91 CrPC.
CONSTITUTIONAL VALIDITY OF SECTION 50 PMLA
The Court referred to the Vijay Madanlal judgment, which upheld the constitutional validity of Section 50 PMLA. Consequently, the Court did not entertain the petitioners’ arguments that the procedure violated Articles 20 and 21 of the Constitution.
NON-COMPLIANCE WITH SUMMONS AS A CRIMINAL OFFENCE
The Court emphasized that under Section 50(3) of the PMLA, individuals summoned must attend, provide truthful information and produce necessary documents. Non-compliance can lead to prosecution under Section 174 Indian Penal Code, 1860, as proceedings under Section 50(2) and (3) of PMLA are judicial in nature within the meaning of Sections 193 and 228 Indian Penal Code, 1860. Consequently, the Court found no illegality in the summons issued by the Chief Judicial Magistrate of Patiala House Courts, New Delhi, against Rujira Banerjee and upheld the application of Section 63 PMLA read with Section 174 Indian Penal Code, 1860.
KEY INSIGHTS
The Supreme Court’s ruling underscores the PMLA’s overriding authority over the CrPC concerning the summoning procedure, especially in money laundering cases. The decision strengthens the power of enforcement agencies like the ED in conducting inquiries under the PMLA, providing them with a clear and independent procedural framework that supersedes the general provisions of the CrPC.
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