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2016 (1) TMI 833 - HC - Money LaunderingMoney Laundering - offenses are bailable or not - whether the offence is cognizable or non-cognizable in view of the amendment made and whether the authorities under the Act have any jurisdiction to investigate into the cognizable offence. - offences under Sections 406, 419, 420, 467, 471, 120B of IPC and under Sectins 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988 - Held that - The first schedule of the Cr.P.C. specifically provides the classification of offences which are cognizable or non-cognizable, bailable or non-bailable and by what Court triable apart from the punishment which is provided for the said offences. Under Part II of the first schedule, classification of offences against other laws provide that offences punishable with imprisonment for more than 3 years and upwards would be cognizable and non-bailable. - as noticed, Section 4 provides for punishment for more than 3 years and thus offences would be cognizable as provided in the Cr.P.C. itself and thus, the first submission raised by counsel for the petitioner is without any basis. Whether the petitioners have been prejudiced - Held that - It is not disputed that the summons issued to the petitioners which are subject matter of challenge are as per Form V. The petitioner has not challenged any of the rules or the sections of the Act and neither any challenge has been raised to the vires of the Act that it is violative of any procedure and that his fundamental rights under the Constitution are infringed. Thus, it is apparent that it is in pursuance of the statutory powers, the authorities have issued summons. In the present case, as noticed, the complaint has to be filed and with the investigation being at the initial stage the same cannot be quashed at a thresh hold in the absence of any legal bar provided under the Statute. - The ancillary prayers made for videography at the time of investigation in the presence of the advocate while recording statements thus is the only issue left for consideration in view of the above discussion. It is to be noticed that counsel for the respondent, vide order dated 19.03.2015, had undertaken that on the petitioners joining the investigation, they would have no objection to the interrogation/examination being videographed and necessary arrangements would be made for the same. - Petition dismissed - Decided against the petitioner.
Issues Involved:
1. Jurisdiction and authority of the Enforcement Directorate (ED) to investigate under the Prevention of Money Laundering Act, 2002 (PMLA). 2. Nature of the offences under PMLA - whether cognizable or non-cognizable. 3. Compliance with procedural safeguards during investigation. 4. The legality of the summons issued to the petitioners. 5. The necessity for videography during interrogation. Detailed Analysis: Jurisdiction and Authority of the Enforcement Directorate (ED): The petitioners challenged the authority of the ED to investigate the matter under ECIR No.CDZO/05 dated 25/03/2013, arguing that the offences under PMLA are non-cognizable and require prior sanction/order of a Magistrate for investigation. The court noted that the PMLA is a special statute with provisions for investigation by authorized officers of the ED. Section 45(1A) of the PMLA explicitly bars police officers from investigating offences under the Act unless specifically authorized by the Central Government. Therefore, the ED has the jurisdiction to investigate the offences under the PMLA. Nature of the Offences Under PMLA - Cognizable or Non-Cognizable: The petitioners argued that the offences under PMLA are non-cognizable and bailable due to amendments made in 2005. However, the court held that the offences under Section 3 of the PMLA, punishable with imprisonment for more than three years, are cognizable and non-bailable. The court referred to the First Schedule of the Cr.P.C., which classifies offences punishable with imprisonment for more than three years as cognizable. Thus, the ED has the authority to investigate and arrest without a warrant. Compliance with Procedural Safeguards During Investigation: The petitioners contended that the ED's investigation violated procedural safeguards prescribed under the Cr.P.C., including maintaining case diaries and obtaining necessary permissions. The court observed that the PMLA provides a detailed procedure for investigation, including the power of arrest under Section 19, which requires reasons to be recorded in writing and forwarded to the adjudicating authority. The court emphasized that the PMLA has an overriding effect over the Cr.P.C. as per Section 71 of the PMLA, and the provisions of the Cr.P.C. apply only insofar as they are not inconsistent with the PMLA. The Legality of the Summons Issued to the Petitioners: The court examined the summons issued under Section 50(2) and (3) of the PMLA and found them to be in compliance with the prescribed format (Form V) under the Prevention of Money-Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention) Rules, 2005. The court noted that the petitioners had not challenged the vires of the Act or the rules, and therefore, the summons were valid. The Necessity for Videography During Interrogation: The petitioners requested videography of their interrogation and the presence of their advocate during the recording of statements. The court referred to an undertaking given by the respondent's counsel on 19.03.2015, agreeing to videograph the interrogation. The court held that this undertaking should be complied with, ensuring that the interrogation is videographed as and when the investigation/interrogation of the persons summoned is under way. Conclusion: The court dismissed the petitions, holding that the ED has the jurisdiction to investigate the offences under the PMLA, which are cognizable and non-bailable. The investigation by the ED was found to be in compliance with the procedural safeguards prescribed under the PMLA. The summons issued to the petitioners were held to be valid, and the court directed the respondents to comply with the undertaking to videograph the interrogation.
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