2021 (1) TMI 1319 - HC - Money Laundering

Money Laundering - scheduled offences - recording of ECIR as a prosecution exhibit - objection by the defence on the ground that the said document was not the original but a photocopy and insisted on marking of the original - HELD THAT - Suo motu FIRs are normally registered by the police in white-collar offences where the date and timings in the FIR have least significance. The Enforcement Directorate is not conducting an investigation under Chapter XII of the Cr.P.C., but, on the strength of the powers of search, seizure, recording of statements and arrest, conferred on them by various provisions of the PML Act - A person cannot be convicted or acquitted based on the entries in the ECIR form, because, an offence under the PML Act has to be proved by examining witnesses and proving documents in order to establish that the accused had involved himself in a criminal activity, acquired assets and had projected the proceeds of the crime as untainted property. In this scheme of things, the ECIR document really has no significance. The Special Public Prosecutor placed strong reliance on Section 294 Cr.P.C. to justify his request to the trial Court for marking an office copy of the ECIR form - The Special Public Prosecutor could have obtained the original of the ECIR form from the Adjudicating Authority in New Delhi either by sending a letter to him or filing a petition under Section 91 Cr.P.C. Instead of guiding the Court properly, he has relied upon a non-existent provision', viz. Section 300 C.R.P. In the worst scenario, where, the ECIR form itself is not marked during trial, that by itself, will not vitiate the trial, for the simple reason that, the objective satisfaction arrived at and recorded in the ECIR form by the Enforcement Officer that an investigation under the PML Act has to be commenced based on the knowledge acquired by him that the police have registered a case for a 'schedule offence', can, by no stretch of imagination, either lead to the proof of guilt or otherwise of the person prosecuted under the PML Act. Conviction or acquittal of an accused under the PML Act, can be based only on substantive evidence and not on the mere objective satisfaction arrived at and recorded by the Enforcement Officer in the ECIR form - an ECIR form is only an opinion of the Enforcement Officer based on the case registered for a 'schedule offence' that an investigation under the PML Act should be commenced. The melancholic part in criminal justice system is that, it is often found one blind leading another and the two finally ending up in a cul-de-sac. The impugned order is set aside and the trial Court is directed to permit the prosecution to mark the copy of the ECIR form recording the objections of the defence - this criminal revision is allowed.

Summary

Issues Involved:
1. Registration of FIRs under various sections of IPC and TNPID Act.
2. Investigation by the Enforcement Directorate under the PML Act.
3. Admissibility and significance of the ECIR form.
4. Procedural errors by the Special Public Prosecutor in marking the ECIR form.
5. Trial Court's rejection of the memo to dispense with the original ECIR form.

Detailed Analysis:

1. Registration of FIRs under various sections of IPC and TNPID Act:
The case originated from complaints lodged by individuals alleging that JBJ City Developers and its proprietor/Managing Director, Justin Devadoss, cheated them by promising plots and doubling investments. FIRs were registered under Section 420 IPC and other sections, including 341, 352, 506(1) IPC, and Section 5 of the TNPID Act.

2. Investigation by the Enforcement Directorate under the PML Act:
The Enforcement Directorate initiated a suo motu investigation under the PML Act, registering a case in ECIR No. 10 of 2011. The investigation aimed to determine if the accused were involved in money laundering, as Section 420 IPC is a scheduled offence under the PML Act.

3. Admissibility and significance of the ECIR form:
The trial court emphasized the importance of the ECIR form, requiring the original for prosecution. The High Court clarified that the ECIR is an administrative form used to commence investigation and is not akin to an FIR under Section 154 Cr.P.C. It is not essential for proving guilt or innocence in a PML Act case, which relies on substantive evidence.

4. Procedural errors by the Special Public Prosecutor in marking the ECIR form:
The Special Public Prosecutor attempted to mark a photocopy of the ECIR form, which was objected to by the defense. The trial court demanded the original, which was with the Adjudicating Authority in New Delhi. The High Court criticized the Special Public Prosecutor for citing a non-existent provision (Section 300 C.R.P.) and not properly guiding the court.

5. Trial Court's rejection of the memo to dispense with the original ECIR form:
The trial court's refusal to accept the photocopy of the ECIR form halted the trial. The High Court noted that the trial court could have marked the document, subject to defense objections, as per the Supreme Court's ruling in Bipin Shantilal Panchal v. State of Gujarat and Another. The High Court set aside the trial court's order and directed it to allow the prosecution to mark the ECIR form copy, recording defense objections, and decide on its relevance in the final judgment.

Conclusion:
The High Court allowed the criminal revision, set aside the trial court's order, and directed the trial court to permit the prosecution to mark the ECIR form copy, recording objections, and decide its relevance in the final judgment. The court emphasized the need for proper procedural guidance and criticized the undue importance given to the ECIR form.