2018 (7) TMI 708 - HC - Money Laundering

Offense under Prevention of Money-Laundering - question of determination of sex - Held that - It is an admitted fact that initially the appellant was permitted to appear through the authorised agent. The impugned notice was issued on finding certain new facts and contradiction in the statements given, which could not be satisfactorily explained by the authorised agent. The appellant has been rendering a professional service by travelling extensively throughout the country. While doing so, the question of determination of sex did not stand in any way. However, for appearing before an authority, which is mandated by law, she seeks protective discrimination as a woman. A legal profession stands apart on its own. In discharge of a professional duty, there is no difference between a man and woman. The summons were issued to the appellant in her discharge and capacity as a professional and not otherwise. It is clear from reading of Section 160 of the Code of Criminal Procedure, certainly, the fair construction principle as discussed supra would apply. This Court is unable to see any demon in the summons issued at this stage. There is no need to speculate. Neither a likelihood of bias nor malice can be seen through the summons issued. The appellant did not choose to challenge the summons earlier. She did rightly appear through the authorised agent. Issues have been raised only when the second respondent had asked her to appear in person. The Submissions on the CBI enquiry vis-a-vis the summons cannot be countenanced with the scope being totally different. Similarly, the scope and applicability of Sections 126 to 129 of the Indian Evidence Act, 1872, is not required to be gone into at this stage as otherwise we will be entering into a realm of speculation. We also find that the appellant is not entitled to invoke Section 160 of the Code of Criminal Procedure since the special enactment specifically deals with the power, authority and procedure for issuance of summons under Section 50 of the Act and therefore, there is no requirement to read the proviso to Section 160 of the Code of Criminal Procedure into Section 50 of the Act. The contention of the learned Senior Counsel appearing for the appellant that the averments not being controverted, there is a deemed acceptance, in our considered view cannot be countenanced. When there is no material to substantiate the averments, there is no need to deny them. The appellant has not produced sufficient materials, even prima facie so as to enable us either to hold the existence to likelihood of bias or malice either in fact or law. In fine, both the appeals stand dismissed. However, liberty is given to the respondents to issue a fresh summons to the appellant requiring her appearance in person. No costs.

Issues Involved:
1. Challenge to the summons issued under Sections 50(2) and 3 of the Prevention of Money-Laundering Act, 2002.
2. Applicability of Section 160 of the Code of Criminal Procedure, 1973 to the appellant.
3. Allegations of bias and malice in the issuance of the summons.
4. Privilege available to a lawyer under Sections 126 and 129 of the Indian Evidence Act, 1872.

Issue-wise Detailed Analysis:

1. Challenge to the Summons Issued under Sections 50(2) and 3 of the Prevention of Money-Laundering Act, 2002:
The appellant, a senior lawyer, challenged the summons issued under Sections 50(2) and 3 of the Prevention of Money-Laundering Act, 2002, arguing that the summons were unwarranted given the findings of the Central Bureau of Investigation (CBI), which did not find any incriminatory evidence against her. The court noted that the Prevention of Money-Laundering Act, 2002, is designed to prevent and prohibit money laundering and provides authorities with extensive powers, including the issuance of summons for the production of documents and evidence. Section 50(2) empowers authorities to summon any person whose attendance is considered necessary for investigation or proceedings under the Act. The court emphasized that the appellant was summoned due to discrepancies between her statements and those of another individual involved in the case, which necessitated her personal appearance.

2. Applicability of Section 160 of the Code of Criminal Procedure, 1973 to the Appellant:
The appellant sought protection under Section 160 of the Code of Criminal Procedure, 1973, which exempts women from being required to attend an inquiry at any place other than where they reside. The court clarified that Section 65 of the Prevention of Money-Laundering Act, 2002, allows for the application of the Code of Criminal Procedure, 1973, only when there is no inconsistency with the provisions of the Act. Section 71 of the Act further provides that in case of any inconsistency, the provisions of the Act will prevail. The court concluded that the specific powers conferred under Section 50 of the Act override the general provisions of Section 160 of the Code of Criminal Procedure, thus mandating the appellant's personal appearance.

3. Allegations of Bias and Malice in the Issuance of the Summons:
The appellant alleged bias and malice in the issuance of the summons, arguing that the investigation was conducted with an element of bias and that the summons were issued with malicious intent. The court examined the principles of bias, noting that bias can be personal or official and must be substantiated with sufficient material evidence. The court found no concrete evidence to support the allegations of bias or malice in the issuance of the summons. The court emphasized that the summons were issued based on discrepancies in the statements and were necessary for the investigation process.

4. Privilege Available to a Lawyer under Sections 126 and 129 of the Indian Evidence Act, 1872:
The appellant argued that as a lawyer, she was entitled to privilege under Sections 126 and 129 of the Indian Evidence Act, 1872, which protect communications between a lawyer and their client. The court did not delve into the applicability of these sections at this stage, as it would require speculative analysis. The court noted that the appellant had disclosed the income received for her professional services and had paid the necessary taxes, indicating transparency in her professional dealings.

Conclusion:
The court dismissed the appeals, upholding the summons issued under the Prevention of Money-Laundering Act, 2002. The court granted liberty to the respondents to issue fresh summons to the appellant, requiring her personal appearance. The court found no merit in the appellant's claims of bias, malice, or the applicability of Section 160 of the Code of Criminal Procedure, 1973. The court emphasized the importance of allowing the investigation to proceed smoothly and in accordance with the provisions of the Prevention of Money-Laundering Act, 2002.

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