PMLA Offences Non-Cognizable In The Sense Local Police Can't Arrest, Says Supreme Court During Hearing

The Supreme Court on Wednesday remarked that the PMLA Act offences are not cognisable only to the extent of the scheme of the Cr. P. C.- that they are cognisable in the sense that arrests can be effected without a warrant by authorities specified in the Act, but they are non-cognisable qua the local police so that arrests cannot be made under the Cr. P. C.The Court was hearing SG Tushar Mehta's response to the primary contention of the Petitioners that the offence of money laundering under the PMLA is a non-cognisable offence, and that therefore, as a corollary, without obtaining an order from a competent magistrate under section 155 of the Cr. P. C., no investigation could have been initiated under the PMLA. By the Amendment Act of 2005, the erstwhile section 45(1)(a) of the PMLA, which said that 'every offence punishable under this Act shall be cognisable', was deleted.At the outset, the SG advanced, "This compartmentalisation as cognisable and non-cognisable for the purpose of PMLA is only irrelevant. I will show Your Lordships that money laundering offences are cognisable but it may ultimately lead us nowhere. Because a cognisable offence, as defined under the Cr. P. C., is one where the police officer can arrest a person without warrant. He is not supposed to go to the court, wait till the court hears the matter and then issues the warrant. Whereas in case of the non-cognisable offences, he has to take a warrant and only then he can arrest. Because of the very peculiar nature of the money laundering offence, the very volatile nature of the evidence which can be erased with the click of a button, we have a separate provision for arrest, that is, section 19 of the PMLA. It has several safeguards. It is of a very high standard. Under section 41 Cr. P. C, a police officer making arrest can include even a head constable, and arrests can be made even on credible information or even a reasonable suspicion. But here, there are several safeguards- only the director or other designated officer can arrest, you have to record reasons, you must have material in your possession, you will have that material sent in sealed cover to a neutral authority namely the adjudicating authority which will be retained for 10 years so that you don't tamper with the material, which is very easy in case of Cr. P. C. arrest. So when there is a specific contrary provision in section 19, the argument whether it is cognisable or non-cognisable is irrelevant. Because there is a specific provision providing for power of arrest without warrant!""In so far as section 45, as it stood then, said that a PMLA offence is cognisable, police officers started using powers of arrest under the PMLA on the ground that it is a cognisable offence. The police said that since it is cognisable offence, in terms of section 2(c) of the Cr. P. C., I have the power to arrest without warrant. But that was not the intention of the legislature. The intention of the legislature was to have a separate team of officers appointed especially for the purpose because of the peculiar nature of the offence. And therefore, with a view to clarify that a police officer is not supposed to arrest or undertake the investigation, the amendment was made, which is now misused! But this was the mischief sought to be remedied by deleting the word 'cognisable'", he continued.Further, it was the SG's case that not only the authorities are not 'police officers', the scheme of PMLA provides for filing of a complaint before the Special Court. In other words, in case of an investigation by police officers under Cr. P. C., the Court takes cognisance on a police report filing under section 173(2) while in case of investigation by authorities under PMLA, the Court takes cognisance upon a complaint made by an authority. "To remove this anomaly and only for the said purpose, the said words viz. 'cognisable' were deleted... Interestingly, with a view to obviate any possible misinterpretation, the definition of 'investigation' was also inserted. This is very crucial since in absence of definition of the term "investigation in PML Act" [till the said amendment of 2005], someone can rely upon the definition 'investigation' given in section 2[h] of Cr. P. C...Since the term 'police officer' was creating confusion which was sought to be removed by the amendment made in 2005, the definition of the word 'investigation' was inserted wide section 2[na] in the PML Act which reads as under- (na) 'investigation' includes all the proceedings under this Act conducted by the Director or by an authority authorised by the Central Government under this Act for the collection of evidence", it was submitted.At this, Justice Dinesh Maheshwari noted, "Even while introducing this 2005 amendment, the heading of section 45- 'offences to be cognisable and non-bailable'- was not changed. The section itself starts with 'notwithstanding anything contained in the Cr. P. C.', so this is not supposed to mean 'cognisable' in ...

PMLA Offences Non-Cognizable In The Sense Local Police Can't Arrest, Says Supreme Court During Hearing

Mehal Jain

Tags