Karnataka HC Quashes LOC Against Brother Of Bitcoin Scam Accused, Says ED Can't Repeatedly Summon A Person U/S 50 PMLA On Mere Suspicion

The Karnataka High Court has held that summoning of a person repeatedly under Section 50 of the Prevention of Money Laundering Act, without probable cause or reasonable ground and only on the ground of suspicion alone is not in accordance with the principles of due causes and fairness. A single judge bench of Justice Hemant Chandangoudar said,“Section 50 is a crucial provision and states that a person, who is being summoned for investigation must be provided with a written notice specifying the nature and the reasons for it. While the said provision does not explicitly use the term " Probable cause", it emphasises the importance of providing valid reasons and grounds for summoning an individual. The purpose of this provision is to protect the right of the person being summoned and ensure that investigation is not arbitrary.”The bench made observations while allowing a petition filed by Sudarshan Ramesh, brother of bitcoin scam accused Sirkrishna, and declared that the LOC issued against the petitioner by Bureau of Immigration, is unenforceable.Earlier, High Court had rejected Sudarshan's plea challenging an endorsement affixed on his passport for cancellation. Subsequently, the Court had directed the ED complete the probe in six weeks and consider the representations made by Sudarshan to recall the LOC.The petitioner had contended that in the absence of cognizable offence registered against the petitioner and in the absence of reasonable grounds, the petitioner cannot be repeatedly summoned which would otherwise result in violating the principles of fairness, justice and the Rule of Law, more so when the petitioner has cooperated with the investigation. He cannot be expected to give a self incriminating statement which would otherwise result in dilution of rights under Section 50 of the Act. The prosecution opposed the plea saying that the present petition under Article 226 r/w 482 of Cr.P.C. is not maintainable, since the fundamental rights enshrined in the constitution can be enforced only under Article 226 of Constitution of India. Secondly, it was argued there are reasonable grounds for summoning the petitioner to record his statement for investigation of the offence under PMLA against his brother. Therefore, if the LOC issued against the petitioner is withdrawn, in all probability he will abscond and not available for further investigation in future, it was submitted.Prosecution claimed petitioner is not cooperating in the investigation by providing information with regard to the Password and email I.D. of the transaction that has taken place between his father and third party, wherein a sum of Rs.50,000 GBP (Great Britain Pounds) was transferred from the account of the petitioner to the account of one Mr. Hanish Patel and though the petitioner has the knowledge of the said transaction, he has not divulged the information.The bench on going through the records noted that the concept to issue Look-out circular is to secure a person against whom the cognizable offence is registered. LOC can be issued in a cognizable offences under IPC or other penal laws, where the accused was deliberately evading arrest or not appearing before the Trial Court despite Non Bailable Warrant (NBW) and other coercive measures, and the accused is not participating in the trial, and every likelihood of the accused leaving the country. In exceptional circumstances, the LOC can be issued against the witness, in the event, he does not cooperate with the investigation. Following which it said “In the instant case, there is no cognizable offence registered against the petitioner nor a non-bailable warrant is issued against the petitioner. The petitioner is summoned solely on the ground that his brother has been implicated as an accused in the scheduled offences and under the PMLA, and also alleging that his father had transferred 50,000 GBP which is the proceeds of the crime to a third party.” Court noted Petitioner was summoned under Section 50 of the PMLA, 2002, on several occasions, and in pursuance of the same, he appeared and his statement was recorded, and in the statement so recorded, nothing incriminating is elicited to summon him for further investigation.“LOC cannot be issued solely on the ground that the petitioner has not provided information to the convenience and satisfaction of the respondent No.2. The petitioner cannot be repeatedly summoned to give information to suit the convenience of the prosecution,” it thus held.The court then opined that a person can be summoned to give statements during the course of investigation only when there exists a reasonable ground to believe that the said person has knowledge or information with regard to the commission of a crime. "The principle of reasonable suspicion/ probable cause is fundamental to the criminal justice system and it ensures that persons are not subjected to investigation or summoned to give statements during the course of investigation which would otherwise...

Karnataka HC Quashes LOC Against Brother Of Bitcoin Scam Accused, Says ED Can't Repeatedly Summon A Person U/S 50 PMLA On Mere Suspicion

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