2023 (5) TMI 1030 - HC - Money Laundering

Seeking recall of order - allegation of bias - application on which the said order was passed, does not contain any pleading in connection with the public speech made by AB - HELD THAT - The application on which the impugned order was passed was filed by ED wherein it was mentioned that one of the accused who is presently in custody in the PMLA case i.e. KG lodged a complaint before the police station making false, frivolous and baseless allegations against the officers of ED. Copy of the complaint was neither served upon the ED nor upon the learned Special Court, PMLA. Aspersions have been cast upon the investigation of ED. Based upon the inputs received from the media and elsewhere, ED came to learn that the said accused i.e. KG lodged a complaint before the CBI Court and before the Hastings police station against the officers of ED through the Superintendent, Presidency Correctional Home. The said accused along with other politically exposed persons were trying to lodge similar complaints against the officers of ED through the police authorities - Though ED did not make any specific prayer with regard to the relief(s) sought for and made an innocuous prayer for passing appropriate order on the submissions made in the body of the application, but the Court upon hearing submissions made on behalf of all the appearing counsels and upon perusal of documents placed before the Court passed the said impugned order. The offence which ED is dealing with is under the Prevention of Money Laundering Act, 2002 and the predicate offence under the Prevention of Corruption Act, 1988 and the Indian Penal Code is being investigated by CBI. It appears from records that the investigation started a couple of months back and the same has proceeded to a fair extent. Several high ranking politicians including Member of Legislative Assembly, Minister-in-Charge of Education, ex President of the West Bengal Board of Primary Education, several persons in the Bengali film industry have been arrested and taken in custody. Astronomical amount of cash, documents, evidences both physical and electronic have been seized from the custody of the accused - There is hardly any scope to afford prior opportunity of hearing in a proceeding under PMLA. If the proposition of the applicants that, prior opportunity of hearing be afforded before starting the investigation is to be accepted by the Court, then the investigating officers will never be able to conclude the investigation in a time bound manner. There may be several persons involved in an offence under the PMLA. It is for the investigating officer to decide as to who should be interrogated and when. It is not for the suspected/proposed accused or the accused to dictate terms upon the investigating officer as to how and in which manner the investigation should proceed. The principle of adherence to natural justice thereby meaning that opportunity of hearing is to be given to a person prior to summoning him to give evidence is not the same in all branches of law. The said principle has a different connotation in a proceeding involving civil consequences but has an absolute contrary implication in a criminal proceeding. Application of the principle of natural justice in connection with PMLA and the predicate offences is practically nil. Summoning a person for interrogation in connection with a public scam of such humungous magnitude does not ipso facto imply that coercive step will be taken against him; neither does it suggest that he is an accused or a suspected accused - There is no application of the principle of natural justice requiring prior opportunity of hearing to be given to a person who may be required for investigating a crime. In the instant case, the application for intervention and recalling has been filed by third parties not connected with the relief sought for in the writ petition. The applicants may be required for investigation purpose, but that does not mean that their presence will be necessary for adjudicating the writ proceeding. Intervention/addition of the applicants will in no way aid in disposal of the writ petition. The applicants can always put forward their defence and avail remedies in law, if at all, they are aggrieved by any act of the investigating agencies - The proceeds of crime have penetrated through several strata and have exchanged numerous hands. In such type of cases it is not unusual that threats and challenges will be there in practically each and every step. It is for the investigating officers to overcome the hurdle and unravel the truth to punish the offenders. The powers of the investigating officers to summon are not restricted to any particular person and the said power to investigate is to be utilized effectively to reach the goal. It appears from the prayers made in the applications that recalling has been sought only for the portion of the order where direction has been passed for causing investigation of the involvement of the applicants. The applicants do not appear to be bothered by the investigation per se. It is only where direction has been passed to investigate their involvement, that the applicants oppose the same. The act of the applicants in pressing the instant applications raises doubt in the mind of the Court that the same have been filed with mala fide intention to deter the investigating officers to follow through the process of investigation which has already opened up a box of worms with more to follow suit. The idea is to delay the entire process to the extent possible so that the real culprits can remain shielded. In fact, on account of filing the applications neither the ED nor the CBI appear to have proceeded any further - If the trend to delay the main investigation and intimidate the investigating officers is not dealt with appropriately at the very first stage, then the same will develop as a style and very many investigations in future may be held up for the same reasons. Such a move must be stubbed with an iron hand and upon imposition of exemplary costs so that the same has a deterring effect and similar offenders will be compelled to think a multiple time before adopting such a stand. Thus, no relief can be granted to the applicants - application dismissed.

Summary

Issues Involved:
1. Application for intervention and recalling of order.
2. Allegation of bias against the Hon'ble Judge.
3. Jurisdiction and determination of the Hon'ble Judge.
4. Principle of natural justice and prior opportunity of hearing.
5. Validity and procedural aspects of investigation under PMLA.

Summary:

1. Application for Intervention and Recalling of Order:
KG filed CAN 3 of 2023 to be impleaded as a party in the writ proceeding, citing his association with student politics and his arrest by the ED in a money laundering case. He also filed CAN 4 of 2023 to recall a part of the order directing investigation of his custodial torture complaint. AB filed CAN 5 of 2023 and CAN 6 of 2023, seeking intervention and recalling of the order directing investigation into his activities, claiming he was a stranger to the writ proceeding and was aggrieved by the order passed against him without his knowledge. Both applicants challenged the order dated 13th April 2023 before the Supreme Court, which stayed all actions against them but did not extend the stay upon disposal of their Special Leave Petitions.

2. Allegation of Bias Against the Hon'ble Judge:
The applicants alleged bias against the Hon'ble Judge, citing an interview where the Judge expressed intentions against AB. They argued that the Judge's actions were not in tune with the Bangalore Principles of Judicial Conduct. The Supreme Court reassigned the matter to another Judge to dispel doubts of bias.

3. Jurisdiction and Determination of the Hon'ble Judge:
The applicants contended that the Judge did not have the determination to take up matters related to criminal investigations. The Court, however, held that the Judge was overseeing the investigation and had jurisdiction to pass orders facilitating the investigation process. The Court referenced judgments affirming that orders passed without jurisdiction are void.

4. Principle of Natural Justice and Prior Opportunity of Hearing:
The applicants argued that the order was passed without granting them an opportunity of hearing, violating the principle of natural justice. The Court held that in criminal investigations under PMLA, there is no requirement to give a prior opportunity of hearing to a suspected accused. The investigation process does not necessitate prior notice to the accused.

5. Validity and Procedural Aspects of Investigation under PMLA:
The Court noted that the investigation under PMLA is criminal in nature and does not require prior opportunity of hearing. The investigating officers have wide powers to summon any person for evidence collection. The Court emphasized that the investigation should proceed unhindered and dismissed the applications for intervention and recalling with exemplary costs, highlighting the need to prevent delays in the investigation process.

Conclusion:
The applications CAN 3 of 2023, CAN 4 of 2023, CAN 5 of 2023, and CAN 6 of 2023 were dismissed with costs assessed at fifty lakh rupees, to be deposited by KG and AB in favor of the State Legal Services Authority and the High Court Legal Services Authority, respectively. The Court underscored the importance of allowing the investigation to proceed without interference and the necessity of exemplary costs to deter similar future actions.