2017 (2) TMI 1 - HC - Money Laundering

Protection in respect of conviction for offences - money laundering - Held that - A lot was argued on behalf of the respondents as regards the conduct of the applicant. It was pointed out that in the past, for two times, the summons issued by the authority were not honoured. This, according to the respondents, is suggestive of the fact that the applicant is not willing to cooperate in the investigation. Mr. Chaudhary, the learned senior counsel appearing for the applicant pointed out that when the first summons was served, the father of the applicant informed that the applicant was with the C.B.I. for the purpose of interrogation. When the second summons was served, it was pointed out that since the documents have been asked for, it would take some time for the applicant to collect the same and he would, thereafter, appear before the authority. I am not so much concerned as regards the conduct of the applicant. I expect the applicant to extend full cooperation in the course of his interrogation which the authority wants to undertake in connection with the ECIR referred to above. Even otherwise, the person summoned under Section 50 of the Act, 2002 is bound to state the truth upon any subject respecting which he is examined or make statement, and produce such documents, as may be required. In view of the aforesaid, I hold that although the applicant cannot claim the relief, as a matter of right, yet as of abundant caution and prudence, I am inclined to permit the counsel of the choice of the applicant to remain present within visible distance, but beyond the hearing range. In the result, this application is allowed. Direct the respondent No.2 to permit the advocate of the applicant to be present during the interrogation of the applicant. The advocate concerned should be made to sit at a distance beyond the hearing range, but within the visible distance and the lawyer must be prepared to be present whenever the applicant is called upon to attend such interrogation. Also take notice of the fact that the applicant was directed to remain present on 2nd January 2017. It will be open for the authority to issue a fresh summons under Section 50 of the Act, 2002 to the applicant asking him to remain present on a particular date. On receipt of such summons, the applicant shall remain present before the authority for the purpose of interrogation. Rule is made absolute to the aforesaid extent. Direct service is permitted.

Issues Involved:
1. Presence of the petitioner’s advocate during interrogation.
2. Stay on further proceedings arising out of the summons.
3. Restraint on coercive action against the petitioner.
4. Awarding costs to the petitioner.

Issue-Wise Detailed Analysis:

1. Presence of the Petitioner’s Advocate During Interrogation:
The petitioner, summoned under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA), requested that his lawyer be allowed to be present at a visible but not audible distance during interrogation. The petitioner expressed concerns about potential coercion and extortion of false confessions. The petitioner cited the Supreme Court's decision in Smt. Nandini Satpathy vs. P.L. Dani, which emphasized the constitutional right to legal assistance during interrogation to prevent involuntary self-incrimination.

The respondents opposed this request, arguing that the petitioner was not yet an accused and thus not entitled to protections under Article 20(3) of the Constitution. They cited the Supreme Court's decision in Poolpandi vs. Superintendent, Central Excise, which held that the presence of a lawyer during interrogation is not a right under the Customs Act or FERA.

The court acknowledged the petitioner’s concerns and, while noting that the petitioner cannot claim the relief as a matter of right, allowed the presence of the petitioner’s advocate within visible distance but beyond hearing range during interrogation. This decision was influenced by various Supreme Court orders in similar cases, where the presence of an advocate was permitted under similar conditions to ensure that no coercive methods were used during interrogation.

2. Stay on Further Proceedings Arising Out of the Summons:
The petitioner sought a stay on all further proceedings arising out of the summons issued to him. The respondents argued that the petitioner had not honored previous summonses and that the investigation was crucial for uncovering potential money laundering activities linked to high-denomination currency notes found in the petitioner’s possession.

The court did not grant a stay on further proceedings, emphasizing the importance of the petitioner’s cooperation in the investigation. The court directed the petitioner to appear for interrogation as summoned, with the condition that his advocate could be present within visible distance but beyond hearing range.

3. Restraint on Coercive Action Against the Petitioner:
The petitioner requested that the Directorate of Enforcement be restrained from taking any coercive action against him. The respondents contended that no coercive action had been taken so far and that the petitioner’s apprehensions were unfounded.

The court did not find sufficient grounds to restrain the Directorate of Enforcement from taking coercive action, noting that the petitioner’s cooperation in the investigation was expected. The court emphasized that the presence of the petitioner’s advocate during interrogation would mitigate the petitioner’s concerns about potential coercion.

4. Awarding Costs to the Petitioner:
The petitioner sought the awarding of costs in his favor. The court did not address this issue explicitly in the judgment, focusing instead on the procedural aspects of the interrogation and the petitioner’s cooperation with the investigation.

Conclusion:
The court allowed the petitioner’s advocate to be present during interrogation within visible distance but beyond hearing range, ensuring that the petitioner’s concerns about coercion were addressed. The court did not grant a stay on further proceedings or restrain the Directorate of Enforcement from taking coercive action, emphasizing the need for the petitioner’s cooperation in the investigation. The issue of awarding costs was not explicitly addressed.

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