2022 (3) TMI 807 - HC - Money Laundering

Smuggling - illegal excavation and theft of coal was taking place in the leasehold areas of Eastern Coalfield Ltd. - HELD THAT - From a bare reading of the various provisions along with the scheme of the PMLA, it is clear that sections of CrPC would apply only if the field is not covered, in any manner, by the provisions of the special enactment by way of the PMLA. The CrPC by way of Section 4 Section 5 itself provides that in case a special law exists, such law will apply over and above the CrPC. Section 65 read with Section 71 of the PMLA further provides that while certain provisions of the CrPC may apply in case there exists no provision in the PMLA, in case of any inconsistency, contradiction or confusion arises, the provisions of the PMLA will prevail and override the provisions of the CrPC. It is otherwise also settled law that special law prevails over general law. The PMLA being a special criminal enactment providing for a separate investigative procedure and power, it is imperative that due meaning and regard is given to the provisions of the PMLA in its totality and the said provisions are allowed to operate in their full force on their own. The Hon'ble Supreme Court in ASHOK MUNILAL JAIN AND ANR. VERSUS ASSISTANT DIRECTOR, DIRECTORATE OF ENFORCEMENT 2017 (3) TMI 1642 - SUPREME COURT was faced with the situation wherein there existed no provision in the PMLA which would even remotely be relatable to the power exercised by the courts in remanding arrested persons to custody, and therefore, held that Section 167 of the CrPC would apply to arrests made under the PMLA. Applicability of Section 160 of the CrPC to investigations under the PMLA, specifically with regard to the protection granted to a woman, and not with regard to the territorial limitation - HELD THAT - Considering that Section 50 of the PMLA specifically refers to any person which would include a woman, the special provision in Section 160 CrPC available to a woman would not apply in view of the overriding provision in Section 71 of the PMLA. To apply proviso to Section 160 CrPC concerning a woman to a summons issued under Section 50 of the PMLA would amount to curtailing the powers of the authorized officer under the PMLA, which extends to all persons and has not been statutory limited either on the basis of territory or on the basis of the gender of the person. With regard to the allegation of mala fide it would be apposite to note that the same is to be established to a specific assertion on the basis of proven facts and not on the basis of conjectures and surmises. The burden of establishing mala fide is very heavy on the person who alleges it and further often requires relevant persons against whom such allegations are made to be made parties to the petition so as to enable them to respond to such allegations. With regard to the reliance of the Petitioners on the the case of DIRECTORATE OF ENFORCEMENT AND ORS. VERSUS STATE OF WEST BENGAL AND ORS. 2021 (12) TMI 1311 - DELHI HIGH COURT , it is stated that the facts of the said case are clearly distinguishable from the present case as the notices under the said case were not issued under the PMLA and were rather issued under Section 160 of the CrPC and, therefore, clearly bound by the territorial limitations of the CrPC. The said interim order does not further the case of the Petitioners on any ground. The challenge of the Petitioners to the impugned notices/summons fails. The petition is hereby dismissed.

Summary

Issues Involved:
1. Applicability of Section 160 of the CrPC to investigations under the PMLA.
2. Territorial jurisdiction for summoning individuals under the PMLA.
3. Special provisions for summoning women under Section 160 of the CrPC.
4. Allegations of mala fide intentions by the investigating agency.

Issue-wise Detailed Analysis:

1. Applicability of Section 160 of the CrPC to Investigations under the PMLA:
The core issue raised is whether Section 160 of the CrPC would apply to investigations conducted under the PMLA. Section 160 CrPC provides for the power of a police officer to require the attendance of witnesses within the limits of his own or adjoining station, with specific protections for women, children, and elderly persons. Section 50 of the PMLA, however, grants authorities the power to summon any person for evidence or document production without such territorial or demographic limitations. The court noted that Section 50 of the PMLA and Section 160 of the CrPC cannot operate together due to inherent inconsistencies. The PMLA, being a special legislation, overrides the CrPC as per Section 71 of the PMLA, which states that the provisions of the PMLA will have effect notwithstanding anything inconsistent in any other law. Therefore, Section 160 CrPC does not apply to investigations under the PMLA.

2. Territorial Jurisdiction for Summoning Individuals under the PMLA:
The petitioners argued that since they are residents of Kolkata, they should be examined there. The court emphasized that the PMLA does not impose territorial limitations on the powers of the authorities, unlike the CrPC. The PMLA authorities can summon individuals irrespective of their location within India, given the nature of the offenses under the PMLA, which often involve cross-border implications. The court found no statutory limitations on the territorial jurisdiction of the PMLA authorities and upheld the summons issued to the petitioners to appear in New Delhi.

3. Special Provisions for Summoning Women under Section 160 of the CrPC:
The petitioners contended that Petitioner No.2, being a woman, should be examined at her residence as per the proviso to Section 160 CrPC. The court noted that Section 50 of the PMLA, which allows summoning any person, does not provide exceptions for women. The court referred to the judgment in Nalini Chidambaram vs. ED, which held that the protection under Section 160 CrPC does not apply to investigations under the PMLA. The court concluded that applying the proviso to Section 160 CrPC to the PMLA would curtail the powers of the authorities under the PMLA, which is not intended by the legislature.

4. Allegations of Mala Fide Intentions by the Investigating Agency:
The petitioners alleged that the investigation was motivated and mala fide, citing the premature public disclosure of the summons. The court observed that allegations of mala fide must be supported by specific facts and evidence, which the petitioners failed to provide. The court reiterated that the investigation is the sole prerogative of the investigating agency and cannot be interfered with based on unsubstantiated allegations of mala fide intentions. The court dismissed the allegations of mala fide as they were not substantiated by concrete evidence.

Conclusion:
The court dismissed the petitions, holding that Section 160 of the CrPC does not apply to investigations under the PMLA, and the authorities under the PMLA are not territorially restricted. The special provisions for summoning women under Section 160 CrPC do not apply to the PMLA, and the allegations of mala fide intentions were unsubstantiated. The court upheld the summons issued to the petitioners to appear in New Delhi.