S.50 PMLA | Confession Made To ED Not Hit By Evidence Act, Whether Made Voluntarily Or Coercively Would Be Decided At Trial: Madras HC

The Madras High Court recently reiterated that the officers of the Enforcement Directorate, who record statements of accused under Section 50 of the Prevention of Money Laundering Act, are not police officers and such statements would not come under the Indian Evidence Act. The court added that whether the statements were recorded voluntarily or under coercion could be decided only on trial and such a defence could not be brought in during the discharge stage. “Under section 50 of the PML Act, officers of Enforcement Director (ED) have the power to summon individual, enforce attendance and recorded statements. The officers of ED are not considered as police officers and statement made under section 50 of PML Act, not come under the Indian Evidence Act, 1872. Whether the statements recorded from the accused are voluntarily or obtained under coercion would be decided only at the time of the Trial and therefore the ground raised by the petitioner that the respondents relied upon the confession statement of accused at this stage is unsustainable,” Justice R Poornima said. The bench of Justice GR Swaminathan and Justice R Poornima gave a split verdict in a criminal revision petition filed by a man charged under Section 4 of the PMLA. Justice GR Swaminathan noted that the order of discharge by the Special Court was virtually a non-speaking order and vitiated by non-application of mind and thus remitted the matter back to the Special Court for fresh adjudication. Justice Poornima, however found prima facie material to proceed against the accused and thus dismissed the plea. Background The petitioner, S Nagarajan, was one of the directors of M/s. Olympus Granites Private Limited, a company carrying on the business of mining minerals of all types in India and abroad. The case against the company and its directors was that they had violated the lease conditions and conducted illegal quarrying in leased Government land, with the connivance of Government officials, using explosives and caused wrongful loss to the Government. Thus, the case was registered under Section 120(b), 411, 420, 471, 304(ii) of IPC read with Sections 3 and 4 of the Explosives Substance Act. Since the offense are schedule offences under the PMLA, a copy of the chargesheet was forwarded by the Superintendent of Police and based on the same, the ECIR was recorded. A complaint was filed before the Special Court and cognisance was taken. Though the petitioners filed a discharge petition, the court dismissed the same against which the present revision petition was filed. The revision petitioner argued that even if there were any violation of the lease agreement or license, charges could be framed only under the penal provisions of The Mines and Minerals (Development and Regulations) Act,1957 and the Tamil Nadu Minor Minerals Concessions Rules 1959. Thus, it was argued that the charges under the IPC was improper. Justice Poornima refused to accept these contentions and noted that the complaint was filed by the ED based on prima facie materials gathered by the collector of Madurai, evidence recorded from the officials, balance sheet, bank accounts, cancellation of quarry by the State Government, copy of Evaluation letter of Deputy Director of Geology and Mining and Assistant Director Geology of Mining for evaluation of poramboke land, and copies of documents from Sub Registrar Office. The judge concluded that there was no illegality in framing the charges. The court also rejected the argument of the petitioners against the reliance on statements recorded under Section 50. The court further rejected the argument that the Enforcement could not reply on the documents and evidence collected during the investigation of predicate offence. Thus, finding that there was no reason to interfere with the order of the trial judge, the judge was in favour of dismissing the revision petition. On the other hand, Justice Swaminathan opined that the special court's order had to be set aside on the sole ground that it was a non-speaking order and vitiated by non-application of mind. The judge remarked that the special judge had taken a casual approach in the order and had not demonstrated how the prima facie case was made out against the revision petitioner. The judge said that prosecution under PMLA was a serious think and foundational facts should be established. “The court below was obliged to scan the materials on record and give a finding if there is sufficient ground for proceeding against the accused. No such exercise appears to have been undertaken by the trial court. Such an exercise was warranted because in the complaint filed by the authorised officer of the ED, copies of confessional statements of the co-accused in the predicative offence have been relied upon. An order dismissing a discharge petition ought to contain proper reasons. Mere employment of stereotyped ...

S.50 PMLA | Confession Made To ED Not Hit By Evidence Act, Whether Made Voluntarily Or Coercively Would Be Decided At Trial: Madras HC

Upasana Sajeev

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