Vijay Madanlal Chaudhary v. Union of India
Vijay Madanlal Chaudhary v. Union of India
Vijay Madanlal Chaudhary v. Union of India
REPORTABLE
VERSUS
WITH
Digitally signed by
DEEPAK SINGH
SPECIAL LEAVE PETITION (CRIMINAL) NO.10018 OF 2015
Date: 2022.07.27
11:48:08 IST
Reason:
JUDGMENT
A.M. KHANWILKAR, J.
Table of Contents
Consideration
• The 2002 Act 19-22
• Preamble of the 2002 Act 23-24
• Definition Clause 25-36
• Section 3 of the 2002 Act 37-55
• Section 5 of the 2002 Act 56-70
• Section 8 of the 2002 Act 71-76
• Searches and Seizures 77-86
• Search of persons 87
20
• Arrest 88-90
• Burden of proof 91-103
• Special Courts 104-114
• Bail 115-149
• Section 50 of the 2002 Act 150-173
• Section 63 of the 2002 Act 174
• Schedule of the 2002 Act 175 & 175A
• ECIR vis-à-vis FIR 176-179
• ED Manual 180-181
• Appellate Tribunal 182
• Punishment under Section 4 of the 183-186
2002 Act
Conclusion 187(i)-(xx)
Order 1-7
PREFACE
this Court in Nikesh Tarachand Shah vs. Union of India & Anr.3,
amended Section 45 of the 2002 Act was put in issue and answered
before this Court and the same is forming part of this batch of cases.
At the same time, separate writ petitions have been filed to challenge
several other provisions of the 2002 Act and all those cases have
(b) We have various other civil and criminal writ petitions, appeals,
other statutes including the Customs Act, 19624, the Central Goods
and Services Tax Act, 20175, the Companies Act, 20136, the
and the Code of Criminal Procedure, 19739 which are also under
(d) Instead of dealing with facts and issues in each case, we will be
the basic tenets of the criminal justice system and the rights
stage and also the right to know the allegations as an inherent part of
vs. Union of India & Anr.11 in support of this plea. Further, as per
law, the agencies investigating crimes need to provide a list of all the
was also submitted that under the Cr.P.C., every FIR registered by
Cr.P.C. was also alleged and it was submitted that this has led to
(Cr.P.C.) and the law laid down by this Court in catena of decisions.
discriminatory.
threshold of the PMLA is met and it cannot be urged that the ECIR
41A and for witnesses under Section 160. The same distinction is
absent under the PMLA. Further, Chapter XII of the Cr.P.C. is not
Constitution of India14.
13 Lalita Kumari vs. Government of Uttar Pradesh and Ors., (2014) 2 SCC 1 (Para 120.1)
14 E.P. Royappa vs. State of Tamil Nadu & Anr., (1974) 4 SCC 3; also see: S.G. Jaisinghani vs.
Union of India and Ors, (1967) 2 SCR 703 and Nikesh Tarachand Shah, (supra at Footnote No.3)
(Paras 21-23).
27
must satisfy itself that the proceeds of crime have been projected as
made vide Finance (No.2) Act, 2019. It has been submitted that such
(v) It is also stated that the general practice is that the ED registers
was sought to be criminalised was not the mere acquisition and use
was also made to the Preamble of the PMLA which refers to India’s
15United Nations adopted and signed the Convention against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances (hereinafter referred to as “Vienna Convention” or “the 1988
Convention” or “the UN Drugs Convention”, as the case may be)
16 For short, “1999 Bill”
29
that the safeguard under Section 17(1) has been totally done away
Act, yet the persons concerned should be summoned only after the
rights.
(vii) It is urged that the derivate Act cannot be more onerous than
Schedule being overbroad and inconsistent with the PMLA and the
Objects and Reasons of the 1999 Bill, it has been stated that the Act
under the PMLA so widely. It is also submitted that there are certain
itself and that the inclusion of such offences in the Schedule does
not have a rational nexus with the objects and reasons of the PMLA
18 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic
Substances, 1988 (for short, “Vienna Convention”); Basle Statement of Principles, 1989; Forty
Recommendations of the Financial Action Task Force on Money Laundering, 1990; Political
Declaration and Global Program of Action adopted by the United Nations General Assembly on
23.02.1990; and Resolution passed at the UN Special Session on countering World Drug
Problem Together – 8th to 10th June 1998.
19 (1981) 4 SCC 173 (Para 8)
32
Enforcement21.
(x) Our attention is also drawn to the provisions which have now
“8. Adjudication—
….
(5) Whereon conclusion of a trial for any scheduled
offence, the person concerned is acquitted, the attachment
of the property or retention of the seized property or record
under sub-section (3) and net income, if any, shall cease to
have effect.”
which posits that a trial under the PMLA can proceed independent
the Special Court and not the trial of the scheduled offence. It is
submitted that a Special Court can never convict a person under the
committed.
and fairness. It is submitted that the Act itself, under Section 65,
22Ashok Munilal Jain & Anr. vs. Assistant Director, Directorate of Enforcement, (2018) 16 SCC
158 (Paras 3-5)
34
Constitution.
the same depends on: (1) what is the object and purpose of the
gauge the objective of the statute, reference has been made to State
stated that it is not necessary to be enrolled under the 1861 Act, but
if one is invested with the same powers i.e., the powers for prevention
and detection of crime, one will be a police officer. Then, the PMLA
Central Excise Act, 194427 and the CGST Act. The dissenting
(xiv) Reliance was also placed on Raja Ram Jaiswal vs. State of
Bihar30. Further, it has been stated that even in Tofan Singh vs.
State of Tamil Nadu31, the case of Raja Ram Jaiswal32 has been
Another crucial point raised is that most statutes where officers have
not passed the muster of ‘police officers’ in the eyes of law, contain
Section 50 of the PMLA. A parallel has also been drawn between the
Section 2(h) of the Cr.P.C. Further, it is urged that the test of power
44(1)(b), both the conditions i.e., ‘filing of a police report’, as well as,
offence under this Act or”. Next amendment made was insertion of
can only file a complaint and not a police report. Therefore, the
officer and the other by the authorities specified under Section 48.
only a nomenclature norm and they are essentially the same thing.
Cr.P.C. and the 1872 Act, the provisions under the PMLA are
this Court in Nandini Satpathy vs. P.L. Dani & Anr.35, while also
different from and does not amount to the proof of the matter
upon, as has been held in Tahsildar Singh & Anr. vs. State of
U.P.38.
the first report of the Law Commission of India and the Cr.P.C.,
Act, police officer and confession has been settled. Therefore, the
under Article 21. Reliance has also been placed on Selvi & Ors. vs.
physical state, but also mental state of mind and it is argued that
within its fold ‘to appear as a witness’ and it is said that it must
summoned. What makes it worse is the fact that the ED claims the
statement even in the NDPS Act. The much harder and harsher
term has been defined in Section 2(i) of the Cr.P.C. which includes
outset, we had mentioned that this issue is not a part of the ongoing
52Gudikanti Narasimhulu & Ors. vs. Public Prosecutor, High Court of Andhra Pradesh, (1978) 1
SCC 240 (paras 1, 2, 10)
46
innocence under Sections 22, 23 and 45 cannot even meet the test
cannot escape the rigors of custody as per Section 167 of the Cr.P.C.
fair trial.54 After the Constitution came into existence, it has formed
as envisaged under the PMLA, especially under Section 17, vests the
53Ranjitsing Brahmajeetsing Sharma vs. State of Maharashtra & Anr., (2005) 5 SCC 294 (paras
10, 11 and 21).
54 Attygalle & Anr. vs. The King, AIR 1936 PC 169
55 Noor Aga vs. State of Punjab & Anr., (2008) 16 SCC 417
56 State of West Bengal & Ors. vs. Committee for Protection of Democratic Rights, West Bengal &
Ors., (2010) 3 SCC 571 (Para 68)
47
realized. It may also hamper the ability to prepare for the trial at a
later stage58. Further, it is submitted that even under the 1962 Act
57 Sakiri Vasu vs. State of Uttar Pradesh & Ors., (2008) 2 SCC 409 (paras 15-17)
58Youth Bar Association of India (supra at Footnote No.11); Also see: D.K. Basu vs. State of W.B.,
(1997) 1 SCC 416
59 For short, “FERA”
60 Directorate of Enforcement vs. Deepak Mahajan & Anr., (1994) 3 SCC 440
48
as they have no control. Further, the PMLA has two sets of processes
Supply Co. vs. Union of India & Ors.61, Collector of Malabar &
Anr. vs. Erimmal Ebrahim Hajee62, G.J. Fernandes vs. The State
of Mysore & Ors.63 and Bijoe Emmanuel & Ors. vs. State of
(ii) It is also argued that the PMLA has inadequate safeguards for
to Sections 41 to 41D, 46, 49, 50, 51, 55, 55A, 58, 60A of the Cr.P.C.
that of the executive which is against the rule of law and right of fair
and 411 of the IPC are scheduled offences overlapping with Sections
also to be noted that the PMLA does not expressly exclude the
people67.
(iii) The next leg of the argument is to the effect that subsequent
same could have not been revived by the 2018 and 2019
66 Subramanian Swamy vs. Director, Central Bureau of Investigation & Anr., (2014) 8 SCC 682
(paras 49, 70).
67 Tofan Singh (supra at Footnote Nos. 24 and 31) (para 4.10)
68 Supra at Footnote No.3
69Saghir Ahmad vs. State of U.P. & Ors., AIR 1954 SC 728 (para 23); Also see: Deep Chand vs.
The State of Uttar Pradesh & Ors., (1959) Supp. 2 SCR 8 (para 21)
51
decision of this Court72. It was urged that even other statutes have
pointed out that it has been held that such onerous conditions were
whether the allegation is prima facie true while granting bail, but in
case of PMLA, the Court has to reach a finding that there are
reasonable grounds for believing that the accused is not guilty before
disentitled to apply for bail as prima facie case is made out, which
conditions even under the UAPA and the NDPS Act are restricted
only to parts of these Acts and not to the whole of them. However,
the same is not the case under the PMLA, as it is applicable to all
76 Ayya alias Ayub vs. State of U.P. & Anr., (1989) 1 SCC 374 (paras 11-17)
77 107 S.Ct. 2095 (1987)
53
such as Sections 21, 22, 23 and 45 of the PMLA reverse the burden
of the findings of this Court79. Thus, various counts that have been
argued herein point out that the PMLA suffers from manifest
proof right from investigation till the judgment was on the accused.
Even though this has changed post 2013 amendment and some
balance has been restored, it has not fully cured this section of its
78 Union of India vs. K.A. Najeeb, (2021) 3 SCC 713 : 2021 SCC Online SC 50 (para 18)
79 Krishna Lal Chawla & Ors. vs. State of Uttar Pradesh & Anr., (2021) 5 SCC 435
80 (2017) 9 SCC 1 (paras 87, 101)
81 (2019) 3 SCC 39 (paras 61, 103, 105)
54
the Act and stated that originally the presumption was raised even
prior to the trial and state of charge, this was diluted by the
for the prosecution to prove any facts once the charges are framed.
The entire burden of disproving the case, as set out in the complaint,
was provided, this Court has read such necessity into the Act. As
for sub-section (b), it is pointed out that the ‘may presume’ provision
(iii) The next point of attack for Dr. Singhvi, learned senior counsel
pointed out that such searches or seizures can take place even
search and seizure operations would take place only after forwarding
wait for the filing of a complaint before a Court. In this way, in the
clarify that these rules are not ultra vires Sections 17 and 18 of the
is also submitted that the proviso cannot travel beyond the scope of
it is stated that the PMLA did not originally contain the second
in the predicate offence. For the first time, in 2009, this proviso was
made, with no fetters. Our attention is also drawn to the use of word
‘any’ for person and property and its distinction from the term
‘proceeds of crime’, having a direct nexus with the ambit of the main
83Dwarka Prasad vs. Dwarka Das Saraf, (1976) 1 SCC 128, Also see: Satnam Singh & Ors. vs.
Punjab & Haryana High Court and Ors., (1997) 3 SCC 353
59
specific challenge is raised against Rules 4(4), 5(3), 5(4) and 5(6).
may crop up, such as taking of the shares and the ED becoming the
worth far more than the value of proceeds of crime. Under Section
Ors.86.
(viii) It is then urged by the learned counsel that Section 45(1) of the
the 2018 amendment has not removed invalidity, pointed out in the
Limited and Ors.90 has also been asserted. The 2018 amendment
proposed for the 1962 Act in the year 2012 and, yet, the same were
comparing the same to other offences under the IPC which are far
88 Arnab Manoranjan Goswami vs. State of Maharashtra & Ors., (2021) 2 SCC 427 (para 70)
89 Order dated 11.4.2019 in S.L.P. (Criminal) No.1698 of 2019
90 (2020) 6 SCC 1
91 Speech of Shri. Arun Jaitley dated 26.3.2012 in the Rajya Sabha
63
certain cases, has also been highlighted. It was also stated that it is
a near impossibility to get bail as under the UAPA, TADA Act, or the
was laid on the expression “shall not be dependent upon any order
by the Trial Court in the scheduled offence”. It was argued that both
continue with the trial for Section 3 offence once acquittal in the
(i) It was also pointed out that the usual practice is of filing an
ECIR on the same day or right after the FIR has been filed by
under the PMLA, reference was also made to other Acts, such as
Activities Act, 197494 and the 1962 Act, being Acts which would not
(ii) It was also argued that often the ED widens the investigation
same. For predicate offence and Section 3, it was stated that if the
The Finance Minister’s 2012 Rajya Sabha Speech was also relied
96 Special Session of the United Nations held for 'Countering World Drug Problem Together' held
in June 1998.
97“objective was to enact a comprehensive legislation inter alia for preventing money laundering
and connected activities confiscation of proceeds of crime, setting up of agencies and
mechanisms for coordinating measures for combating money-laundering, etc”. It was also
indicated that the proposed Act was “an Act to prevent money-laundering and to provide for
confiscation of property derived from, or involved in, money-laundering and for matters
connected therewith or incidental thereto”.
67
counsel also challenges the rigors of the twin conditions for being
offence was in 2013 and Section 13 of the PC Act was inserted into
the PMLA Schedule for the first time in 2009. This, it is maintained
cannot fit into the term “proceeds of crime” under Section 2(1)(u),
the same having been done prior to 2009. It has also been submitted
any other provision of the Act, the relevant time has to be the time
which ingredients for an offence must exist on the day the crime is
Enforcement104.
offence to the Schedule of the PMLA. Another point that has been
the PMLA.
that offences punishable for less than seven years allows a person
and the Constitution of India. It is also pointed out that Section 437
Under no condition can it be said that the bail conditions under the
Court and the special powers under Section 439 Cr.P.C. It was
MCOCA & NDPS Act, since securing the presence was difficult in all
organised crime syndicate, which was in fact the real intent, the bail
points out that the ED has maintained the former stance. It has
been pointed out that this view has been rejected by the High Courts
that the same are only for special circumstances. Learned counsel
then refers to the sequence of conducting the matters and points out
Sections 43(2) and 44(1), whereby the Special Court can try the
said two cases. The High Courts of Jharkhand and Kerala have
scheduled offence has been tried. It has been submitted that the
dependent on the scheduled offence. The High Court for the State
attention is drawn towards Section 212 of the IPC, where the High
Courts have taken a view that unless the original offence is proved,
being totally unrelated third parties, are also being roped in to the
laundering money.
Sections 2(1)(u), 3, 8, 24, 44, etc. It has also been brought to our
the High Court of Andhra Pradesh, the Madras High Court and the
new legal question. Today, the line between civil and criminal
made to the finding of the Hyderabad High Court where Section 8(5)
that this Court dealt with ‘due process’ rights in the Mohammed
Learned counsel has also gone into the facts of the case, where it is
stated that there has been a six year long pre-trial procedure in both
(i) It has also been argued that Section 50 infringes upon the right
to liberty of a person summoned under the Act and violates the right
to Tofan Singh107. It is argued that the use of the term “any person”
105Mohd. Arif alias Ashfaq vs. Registrar, Supreme Court of India & Ors., (2014) 9 SCC 737 (para
28); Also see: Sunil Batra vs. Delhi Administration & Ors., (1978) 4 SCC 494; Mithu vs. State of
Punjab, (1983) 2 SCC 277.
106 (2012) 9 SCC 1
107 Supra at Footnote No.31 (also at Footnote No.24)
75
the due process. No safeguards provided under the Cr.P.C. and the
44(1)(d), it is stated that the right to a fair trial is taken away and
108 Nahar Singh Yadav & Anr. vs. Union of India & Ors., (2011) 1 SCC 307
76
dealing with two different sets of rights for the same accused
Further, reliance has also been placed on Suo Motu Writ (Crl.) No. 1
Section 44 takes away the right of appeal from the predicate offences
109 Hanumant Govind Nargundkar & Anr. vs. State of Madhya Pradesh, AIR 1952 SC 343 (para
10)
110Criminal Trials Guidelines Regarding Inadequacies and Deficiencies, In re, vs. State of Andhra
Pradesh & Ors., (supra at Footnote No.12)
111 Himanshu Singh Sabharwal vs. State of Madhya Pradesh & Ors., (2008) 3 SCC 602
77
for the general public. Reference is also made to the decision of the
approach of non-disclosure.
(iv) It has also been argued that the Schedule of the PMLA renders
repeatedly held that bail is the rule and jail is the exception115.
Predicate offences which under their original act such as the Bonded
that the attachment procedure under the PMLA runs contrary to the
Ashok Kumar Aggarwal, (2014) 14 SCC 295; and State of Jharkhand through SP, Central Bureau
of Investigation vs. Lalu Prasad Yadav alias Lalu Prasad, (2017) 8 SCC 1.
115State of Rajasthan, Jaipur vs. Balchand alia Baliay, (1977) 4 SCC 308; Also see: Sanjay
Chandra vs. Central Bureau of Investigation, (2012) 1 SCC 40; State of Kerela vs. Raneef, (2011)
1 SCC 784 (para 15).
116 For short, “1976 Act”
79
under the predicate offence, attachment can take place only after
offence. Even the Cr.P.C. provides for depriving criminals of the fruit
of the crimes and allows for the true owner of the property to be
attachment has been made, can cause great hardship and financial
legislations, where raids have increased each financial year and, yet,
since 2005 the number of convictions till 2015-16 has remained zero
63(2)(a) and (c) of the PMLA, insofar as they relate to the accused
persons, are ultra vires being violative of Articles 20(3) and 21 of the
PMLA. The next leg of the argument is to the extent that Section
the PMLA in other statutes, such as Section 171A of the 1878 Act,
Section 108 of the 1962 Act; Section 14 of the Central Excises and
referred officers from the ED officers to the effect that they only
recover duty and do not investigate crimes like the ED officials. Even
case under the PMLA. To drive home the point as to who stands in
(i) Similarly, Mr. Ponda, learned senior counsel also relied on the
decision in Ramanlal Bhogilal Shah & Anr. vs. D.K. Guha &
Ors.122 and pointed out that even in cases of FERA, a person stands
the accused under the FERA. It was found that even though
this particular case, an FIR had been registered against the said
questions that would incriminate him. The same plea has also been
(ii) Further, it was urged that Section 2(1)(na) of the PMLA defines
20(3). Section 50(4) of the PMLA also stipulates that they are judicial
124 AIR 1965 SC 1251 (and the Majority view from paras 23 onwards, relevant paras 32, 34 and
41)
125Relied on Kathi Kalu Oghad (supra at Footnote No. 44), Nandini Satpathy (supra at Footnote
No.35), Selvi (supra at Footnote No.43) and Tofan Singh (supra at Footnote Nos.24 and 31)
84
crime takes place prior to the PMLA coming into force; and, similarly,
prior to the offences being added to the Schedule of the PMLA; and
amendment.
Court were relied to urge that the general rule is applicable when the
126 Keshavan Madhava Menon vs. The State of Bombay, AIR 1951 SC 128 (para 15)
127 See : Soni Devrajbhai Babubhai (supra at Footnote No.98) (paras 8-10); Ritesh Agarwal &
Anr. vs. Securities and Exchange Board of India & Ors., (2008) 8 SCC 205 (para 25]; Harjit Singh
vs. State of Punjab, (2011) 4 SCC 441 (paras 13-14); Varinder Singh vs. State of Punjab & Anr.,
(2014) 3 SCC 151 (para 10); and Commissioner of Income Tax (Central)-I, New Delhi vs. Vatika
Township Private Limited, (2015) 1 SCC 1 (paras 27-31)
86
PMLA comes into force. That too, it has to be connected to the date
when the Schedule has accepted the new predicate offence. It only
amendments taken place over the years and especially the fact that
128Bihta Co-operative Development and Cane Marketing Union Ltd. & Anr. vs. Bank of Bihar &
Ors., AIR 1967 SC 389 (paras 5 & 7-8]; Dattatraya Govind Mahajan & Ors. vs. State of
Maharashtra & Anr., (1977) 2 SCC 548 (para 9); S. Sundaram Pillai & Ors. vs. V.R. Pattabiraman
& Ors., (1985) 1 SCC 591 (paras 27 & 45-53); Jagan M. Seshadri vs. State of T.N., (2002) 9 SCC
639; and Hardev Motor Transport vs. State of M.P. & Ors., (2006) 8 SCC 613 (para 31)
87
any statute. Some offences are described in a way that make it clear
in the Pharmacy Act, 1948131 and Sections 162(1) & 220(3) in the
129 Tech Mahindra Ltd. (supra at Footnote No.100) (Telangana & AP High Court, decided on
22.12.2014 – paras 12, 33, 65-67 & 68-71) read with Order dt. 08.12.2017 passed by this Court
in SLP (Crl.) Diary No. 34143/2017; M/s. Ajanta Merchants Pvt. Ltd. (supra at Footnote No.103
– paras 20-22 & 29); Arun Kumar Mishra (supra at Footnote No. 102 – paras 19-21 & 27-28);
Mahanivesh Oils & Foods Pvt. Ltd. (supra at Footnote no. 104 – paras 25-27, 33-35, 37 & 38-
39]; Obulapuram Mining Company Pvt. Ltd. vs. Joint Director, Directorate of Enforcement,
Government of India, ILR 2017 Kar 1846 (paras 5 & 10-12); Ajay Kumar Gupta & Ors. vs.
Adjudicating Authority (PMLA) & Ors., (2017) 2 LW (Cri) 252 (paras 7, 10 & 13-22) and Madhu
Koneru vs. The Director of Enforcement, Crl. Pet.No. 4130/2019, decided on 02.06.2021 by the
High Court of Telangana (paras 31-32).
130 For short, “2006 Act”
131 For short, “1948 Act”
88
clear starting point and an end point to the same, where the
money. Thus, though it may take place over time but it cannot be
itself133.
there is no nexus of the said Section with the object of the PMLA.
132State of Bihar vs. Deokaran Nenshi & Anr., (1972) 2 SCC 890 (para 5); Commissioner of Wealth
Tax, Amritsar vs. Suresh Seth, (1981) 2 SCC 790 (paras 11-17). [Note: observations on
‘continuing offence’ affirmed by this Court in Smt. Maya Rani Punj (Smt.) vs. Commissioner of
Income Tax, Delhi, (1986) 1 SCC 445 (paras 15-20)]
133 M/s. Ajanta Merchants Pvt. Ltd. (supra at Footnote No.103) (para 37)
89
This section does not contemplate a joint trial of the offence under
44(1)(a) to mean that the Special Court can only try the scheduled
provisions of the Cr.P.C. It is also said that the rationale behind this
that the accused's right of being tried as per the Cr.P.C., for
on A.R. Antulay vs. R.S. Nayak & Anr.134. It is submitted that the
the High Court under Section 401 of the Cr.P.C. from the appellate
offence but only under the predicate offence is also tried by the
Special Court. This is also hit by the fact that several of the
statutes which prescribe that they shall be tried by the Special Court
the PC Act, the NDPS Act and the National Investigation Agency Act,
2008135. Thus, in such a case the PMLA Special Court cannot have
power to try offences punishable under those Acts. The phrase ‘any
to try before the Special Court lies only with the authority authorised
(i) As regards Section 44(1)(c), it is urged that the same does not
the PMLA and not any other Special Court. Reliance has been placed
Enforcement vs. Surajpal & Ors.136 and on the other hand, the
case. Hence, the conflict of view between the two High Courts needs
to be resolved.
(ii) Referring to Section 45, it is argued that Sections 201 and 212
of the IPC provide for graded punishment or in line with the principle
illogical for the crimes provided under the PMLA. It is also stated
that the equation of the bail provisions under the PMLA cannot be
saves the conditions from the vices on which it was struck down, the
having been turned on its head. It is also said that the current
within this Act, it is stated that Section 24(a) applies only after
charges have been framed by the Special Court. Section 24(b) refers
Section 3 and it is further contended that Section 24(a) and (b) have
and the PC Act, the reverse burden of proof has only been upheld
activities.
illicit origin of the property’ or ‘helping any person who has been
crime” and use of value thereof, defined under Section 2(1)(u) of the
offence; or, two - the value of such property that is property derived
or obtained from the scheduled offence but also any property which
Money Laundering. Oh Wait, It's Not: The Impact of Cuellar on Concealment Money Laundering
Case Law, 18 J Bus L 255 (2015).
Nagar Palika Nigam vs. Krishi Upaj Mandi Samiti & Ors., AIR 2009 SC 187 and Rohitash
145
Kumar & Ors. vs. Om Prakash Sharma & Ors., AIR 2013 SC 30.
98
from the scheduled offence alone and not any criminal activity. To
other Acts, such as the UAPA, the NDPS Act, the Prohibition of
146 R v Ahmad, [2012] 2 All ER 1137; Also see: R v James, [2012] 2 Cr App R (S) 253
99
from proceeds of crime even if they are different from the original
unreasonable150.
highly prejudicial for the accused during the pendency of the trial.
151A. Kamarunnisa Ghori vs. The Chairperson, Prevention of Money Laundering, Union of India,
2012 (4) CTC 608 : 2012 Writ LR 719
152 Supra at Footnote No. 3
101
relied upon State of Gujarat & Anr. vs. Shri Ambica Mills Ltd.,
Mohan Rao vs. State of Tamil Nadu & Ors.156. In his argument,
Shah157 have been put forth. One, where only the twin conditions
153Deep Chand (supra at Footnote No.69); Saghir Ahmad (supra at Footnote No. 69) and
Mahendra Lal Jaini vs. State of Uttar Pradesh & Ors., AIR 1963 SC 1019
154 (1974) 4 SCC 656
155 Supra at Footnote No.154
156 2021 SCC OnLine SC 440
157 Supra at Footnote No. 3
102
book due to the striking down. It also reminded that this submission
that despite this decision an editorial error where bare acts, post the
161 Which states that “(v) to amend section 45 of the Act relating to offences to be cognizable
and non-bailable and to amend sub-section (1) of section 45 to substitute the words “punishable
for a term of imprisonment of more than three years under Part A of the Schedule” by words
“under this Act” so as to take a step further towards delinking the Scheduled offence and
money laundering offence. Further, it seeks to amend the proviso in subsection (1) by inserting
the words “or is accused either on his own or along with other co-accused of money laundering
a sum of less than Rupees one crore”, after the words “sick or infirm” to allow the Court to
apply lenient bail provisions in case of money laundering offence is not grave in nature.”
(emphasis supplied)
162 Supra at Footnote No. 3
104
Om Prakash & Anr. vs. Union of India & Anr.166, it is argued that
& Ors.168 with respect to the NDPS Act and the application of the
Section 482 and Article 226 of the Constitution and other records or
urged that in a case under the Drugs and Cosmetics Act, 1940171
Cr.P.C. alone.172
two, since the findings recorded in the trial of the scheduled offence
would not have a bearing on the case under the PMLA. Again,
criminal activity must cease the proceedings under the PMLA. Non-
Gupta and Ors., were also referred to, where the FIR and scheduled
offence are both prior to the coming into force of the PMLA and, yet,
15. Mr. Akshay Nagarajan was the last learned counsel to argue on
parts, are meant to cover scheduled offences, they are being used to
take within its sweep any non-scheduled offence due to the first part
175 Attorney General for India & Ors. vs. Amratlal Prajivandas & Ors., (1994) 5 SCC 54
109
buttress this plea, provision of Section 71 of the IPC and Article 20(2)
are invoked177. He has also submitted that for the purpose of Section
16. Mr. Tushar Mehta, learned Solicitor General led the arguments
(1,862), Russia (2,764). Further, only 2086 cases were taken up for
176 Sanjay Dutt vs. State through C.B.I., Bombay, (1994) 6 SCC 86
177 The State of Bombay vs. S.L. Apte & Anr., AIR 1961 SC 578; Also see: Thomas Dana vs. State
of Punjab, AIR 1959 SC 375
178 Hira H. Advani etc. vs. State of Maharashtra, (1969) 2 SCC 662, Also see: R. Dineshkumar
alias Deena vs. State represented by Inspector of Police & Ors., (2015) 7 SCC 497 (paragraphs
41-44)
110
offence takes place, but also the economy of other countries where
(iii) It is submitted that the object of the PMLA which affect the
crime” and the same was recognized for the first time in Regina vs.
of FATF and stated its process of reviewing the compliance with its
hence, carry out its own evaluation and enforcement on the issue of
have evolved over the period of time. Further, FATF has taken
effectiveness outcome181.
types of list viz., grey list and black list, which serve as a signal to
181 (i) It has 8 or more Non-compliant NC/ Partially Compliant (PC) ratings for technical
compliance; (ii) It is rated NC/PC on any one or more of R.3, 5, 10, 11 and 20 “big six”
recommendations; or (iii) It has a low level of effectiveness for 4 or more of the 11 effectiveness
outcomes.
115
country’.
economic effects that may arise from such financial crimes, such as
term of imprisonment of one year or more (or, for states that have
in nature.
the definition of high value dealers to capture those who accept cash
was to ensure that banks are not used to hide or launder funds
(xviii) The Union of India has further traced the origin of the term
intermediate steps.
the money launderers from impacting the growth rate of the world
economies.
submitted that the IMF and the FATF have estimated that the scale
global GDP. It is also stated that the United Nations has recently
(xxiv) It is stated that India, and its version of the PMLA, is ‘merely
Objects and Reasons of the Act, he submits that the Act was enacted
being merely penal in nature, would not only defeat the purpose of
the Act, but would also be against the express provisions enshrined
therein.
scheme of the Act, the respondent submits that there has been a
submitted that the scheme of the Act and rules framed thereunder
abuse.
that the number of cases taken up for investigation each year has
facing action, were done and assets worth Rs.19,111.20 crores out
proceeds of crime involved in the bunch cases under the PMLA which
(xxviii) Having laid down the basic scheme of the PMLA, learned
India was, thus, held to be not fully compliant. Thus, with a view to
money-laundering.
amendments to the UAPA, the NDPS Act and the Companies Act
put forth by the other side, would effectively result in granting the
2019186.
(xxxiv) Strong emphasis is laid on the use of the word ‘any’ in the
PMLA clearly provides that any process or activity which itself has a
definition.
C.B.I., Bombay (II)193. In that case the Court held that the word
Nayandgi Stone Quarries (P) Ltd.195 to contend that the word “and”
law while interpreting domestic law and it is stated that the domestic
194Regina vs. Oakes 1959 (2) QB 350, Ishwar Singh Bindra & Ors. vs. The State of U.P., (1969)
1 SCR 219 and Gujarat Urja Vikas Nigam Ltd. vs. Essar Power Ltd., (2008) 4 SCC 755
195 (1987) 3 SCC 208
196 For short, “Mines Act”
197Pratap Singh vs. State of Jharkhand & Anr., (2005) 3 SCC 551 and National Legal Services
Authority vs. Union of India & Ors., (2014) 5 SCC 438
133
Liberties vs. Union of India & Anr.198 and Githa Hariharan &
Anr. vs. Reserve Bank of India & Anr.199 to submit that the
Haryana & Anr.200, Ajmer Singh & Ors. vs. Union of India &
& Ors.205, Lalita Kumari vs. Govt. of Uttar Pradesh & Ors.206,
The State of Uttar Pradesh & Ors.210 laid down some tests for
between two statutes. The Court held that it has to be seen whether
the provisions are in direct conflict with each other; whether the
matter and thereby replace the previous law and whether the two
repealing section then the maxim ‘est exclusio alterius’ (the express
held that the provisions of the stated Code ought to be given primacy
also been invoked, which means that general law yields to special
vs. Smt. Lakshmi Devi & Ors.215, The South India Corporation
211 Kishorebhai Khamanchand Goyal vs. State of Gujarat & Anr., (2003) 12 SCC 274
212 (2018) 1 SCC 407
213 For short, “IBC”
214 (1831) 2 Dow & Cl 480
215 1963 (Supp.) 2 SCR 812
137
Anr.216, Anandji Haridas and Co. (P) Ltd. vs. S.P. Kasture &
offences mentioned under the First Schedule of the Cr.P.C. and the
the offence under the Act would be cognizable. Further, the purpose
or non-cognizable, is irrelevant.
(xlvi) It is submitted that from the very inception of the PMLA, the
investigation, who are not police officers under the Act, and after the
because due to the nature of offence, there are high chances that the
accused may eliminate the traces of offence if he had any prior notice
Jharkhand High Court in Hari Narayan Rai vs. Union of India &
Singh & Ors. vs. Union of India & Ors.224, Bombay High Court in
222Bhagirath vs. Delhi Administration, (1985) 2 SCC 580 and Eastern Coalfields Limited vs.
Sanjay Transport Agency & Anr., (2009) 7 SCC 345
223 2010 SCC OnLine Jhar 475
224 2015 SCC OnLine P&H 19739
225 2016 SCC OnLine Bom 9938
140
W.P. (Crl.) No. 363 of 2018 and Crl. M.A. No. 2151 of 2018 i.e.,
Division Bench of the High Court took a different view and referred
Investigation Office vs. Rahul Modi & Anr.230 and of the High
Courts.
held that Chapter XII of the Cr.P.C will not apply during the
the question under consideration and held that the offence under
concerned and the ECIR registered under the Act cannot be equated
with an FIR.232 Strong reliance has been placed upon the decisions
inferred from the scheme of the Act prior to the amendment and
the form which determines the nature of the Act. To lend support to
that the offence under the Act is cognizable in nature so far as the
Mudrika Singh242.
who are appointed by statute have the power to arrest any person
any police officer and the officer can arrest any person merely on the
that the argument of the other side that the accused or arrested
persons are not even informed of the case against them, is contrary
to the plain language of the Act, as the Act itself mandates that the
Person along with the Material to the Adjudicating Authority and its
Director and the reasons formed by him to believe that the person is
Section 167 Cr.P.C. would also apply and any further detention of
and, for the same reasons, Chapter V of the Cr.P.C. would also apply
Kumar vs. State of Bihar & Anr.244 will have no application for
bona fide.
done by high official bestowed with such responsibility and make the
investigation redundant.
parties that the power under Section 19 of PMLA can only be invoked
police report filed under Section 173 of the Cr.P.C, which makes the
Section 35 of the FERA and Section 103 of the 1962 Act and their
Court examined the power to arrest under Section 104 of 1962 Act.
fancy of the officer. The law takes due care to ensure individual
compliant with Article 14. This is reinforced from the fact that only
Reliance has been further placed on Premium Granites & Anr. vs.
the decision in M/s. Sukhwinder Pal Bipan Kumar & Ors. vs.
the discretion will not be abused where the discretion is vested with
Ali Khan vs. Union of India & Ors.251 to urge that mere possibility
unconstitutional.
PMLA are reasonable from the stand point of the accused and his
terrorism, drug related offences and organized crime and the twin
Legislature.
urged that the same concern has been expressed by the global
under the PMLA. Reliance has been placed on A.K. Roy vs. Union
of India & Ors.252 to urge that that ‘the liberty of the individual has
enactments for the welfare of the people and they not only provide
punishment is not the only indicator of the gravity of the offence and
private parties have wrongly argued that the twin conditions cannot
State of Bihar & Anr. vs. Amit Kumar alias Bachcha Rai258.
Further, reliance has been placed on Mohd. Hanif Quareshi & Ors.
Anr.260, to state that the fair trial must not only be fair to the
during trial or protect the evidence, are not enough because of the
Therefore, even deposit of the passport of the accused may not deter
evidence.
of the offence with deep rooted conspiracy, as they involve huge loss
whole. It is submitted that the Court while granting bail must keep
grant the bail. It is true that the Court exercises discretion while
investigation.
261437. When bail may be taken in case of non- bailable offence.— (1) When any person
accused of, or suspected of, the commission of any non-bailable offence is arrested or detained
without warrant by an officer in charge of a police station or appears or is brought before a
Court other than the High Court or Court of Session, he may be released on bail, but—
(i) such person shall not be so released if there appear reasonable grounds for believing
that he has been guilty of an offence punishable with death or imprisonment for life;
…..
(emphasis supplied)
156
Section 19, which itself justifies high threshold for grant of bail.
& Anr. vs. The State of West Bengal263, Special Reference No.1
& Ors.267 and The State of Bombay & Anr. vs. F.N. Balsara268
to urge that ‘the principle of equality does not mean that every law
must have universal application for all persons who are not by
line with the object of the Act which is to bring about deterrence
effect.
39(b), 39(c) and 51(b) & 51(c) of the Constitution to state that the
Union vs. Madura Coats Ltd. & Anr.270 and M.R.F. Ltd. vs.
Inspector Kerala Govt. & Ors.271 to state that the Parliament can
Reddy & Anr.272 and State of Tamil Nadu and Ors. vs. L. Abu
Kavur Bai and Ors.273, to state that the Article 39(b) of the
India vs. Niyazuddin Sk. & Anr.288, Satpal Singh vs. State of
Nittin Johari & Anr.291 to urge that the twin conditions with regard
and Research Centre & Ors. vs. State of Madhya Pradesh &
from the point of view of general public and not from the point of
that detention of a person does not mean that he has been punished
permissible regulation’.
Nikesh Tarachand Shah295 was based on the fact that the twin
cases of bail in respect of both the predicate offence and also the
class of offences within the PMLA i.e., offences punishable for a term
Schedule and not to all the offences under the PMLA. It is stated
that both the above defects have been removed by the amendment
been struck down by the Court as being violative of Part III of the
Constitution, then the Legislature has the power to cure the reason
Shri Prithvi Cotton Mills Ltd. & Anr. vs. Broach Borough
of India & Ors.301, Comorin Match Industries (P) Ltd. vs. State
of T.N.302, Indian Aluminium Co. & Ors. vs. State of Kerala &
Ors.303, Bakhtawar Trust & Ors. vs. M.D. Narayan & Ors.304,
Foundation & Anr. vs. State of Goa & Anr.306 and Cheviti
Co. vs. The State of Andhra Pradesh & Anr.311 and F.N.
removed, then the law will become effective without any need of re-
retrospectively and cannot save the validity of the law, was said in a
etc. etc. vs. Authorised Officer, Land Reforms & Ors. etc.314, to
submit that the Court in this case negated a similar argument made
are totally misconceived, as the Court in that case neither had the
intent nor had the occasion to decide the issue of taking away the
(lxxvi) It is, thus, submitted that the law laid down in Nikesh
are only applicable to regular bail and not to anticipatory bail, then
the provision may not stand the scrutiny on the touchstone of Article
placed on the Sushila Aggarwal & Ors. vs. State (NCT of Delhi)
of Section 438 Cr.P.C. The words ‘anticipatory bail’ are not used
even in that case, the Court held that the power under Article 226
which was based on the Section 44(2) of the PMLA, that the twin
directly to the High Court323. Thus, Section 44 mainly deals with the
application of bail is filed in the Special Court and not when the
application for bail is filed before the High Court, then such
all these three ingredients exist, the protection of Article 20(3) cannot
be attracted.
complaint filed before the Court. It is urged that for Article 20(3) of
accused at the time when the statement was made by him and not
under Section 50(2) of the PMLA would not violate Article 20(3) of
the statement under Section 50(2) was made. Reliance has been
the person who made the statement must stand in the character of
accused at the time when the statement was made in order to attract
has further approved the view of the Madras High Court in Collector
wherein the Court held that when the statements are recorded by
customs officers under Section 108 of 1962 Act, the maker of the
vs. The State332 was also approved and the contrary view of the
108 of the 1962 Act is admissible evidence and is not hit by Section
attachment of the property has to take place and at that stage there
then at that stage such person does not stand in the character of an
the Constitution.
this issue will arise only when the person concerned is held to be
and intimidatory methods and the like, not legal penalty’. Therefore,
present case.
is submitted that the witness can be classified into four types – (i)
Therefore, the person against whom the summons has been issued
under Section 50(2) read with Section 50(3), is not a person accused
the Delhi High Court held that the person against whom summons
FIR registered against the accused under the FERA Act, therefore,
of PMLA, the FIR is registered for the predicate offence and not for
different.
for the bar contained under Section 25 of the 1872 Act to apply,
Section 25 of the 1872 Act will not apply in case the statement is
police under Section 161 of the Cr.P.C. are different than the
the 1962 Act is pari materia to Section 50 of the PMLA and the
has been placed on Tofan Singh356, wherein it was held that Section
67 of the NDPS Act is different from Section 108 of the 1962 Act,
has been held that the officers who are not empowered to file a
Balkishan A. Devidayal361.
falling under Section 155(4) of the Cr.P.C., if the police officer after
Section 2(d), the same will be treated as a complaint and the police
offence, as he can only file a complaint which does not require any
report, whereas in case of the PMLA offence, the ED officers are only
state that the word “deemed” shows that the Legislature was
else. Reliance has been placed on the decision of the Delhi High
Court in Lajpat Rai Sehgal & Ors. vs. State363, to state that after
also been placed on the decision of the Delhi High Court in Narain
Singh vs. The State364, wherein a similar view has been taken. It
is submitted that this Court in several cases, has held that the
mentioned case was not concerned with the maintenance of law and
order and detection and prevention of crime, but with some other
Act have been relied upon to state that the officers of the ED are
laundering.
India366 to state that the object of the PMLA is to bring the proceeds
of crime back into the economy. Reliance has also been placed on
has both, civil and criminal consequences and the Act empowers the
property.
statement under Section 161 of the Cr.P.C. does not act judicially.
Balkishan A. Devidayal368.
(xiv) It is further stated that the proceedings under the PMLA are
that the statement recorded under Section 50(2) will have to comply
PMLA are not statements recorded under Section 161 of the Cr.P.C.
case with the statement recorded under Section 161 of the Cr.P.C.
such is not the case with statements recorded under Section 161 of
presumption under Section 80 of the 1872 Act will apply and it shall
under which it was taken are true and such evidence, statement or
placed on the decisions of this Court in Baleshwar Rai & Ors. vs.
187
PMLA, it is stated that the bar of Section 162 of the Cr.P.C. cannot
would have done so in the Act itself, as it has been done under the
held that the statement recorded under Section 67 of the NDPS Act
under the NDPS Act, will not apply to Section 50(2) of the PMLA. It
different from that of the NDPS Act. In the case of NDPS Act, a
officer other than the police officer, then such provisions will not
Article 14 of the Constitution, which is not the case under the PMLA.
Cr.P.C. Such inconsistency does not occur in the case of the PMLA,
the NDPS Act, then he has no power to file closure report. However,
of the NDPS Act otiose, whereas the PMLA does not contain any
(xx) Further, the PMLA does not contain any provision which invest
NDPS Act. Hence, Section 50(2) of the PMLA cannot be read down
had stipulated that the burden of proving the lawful origin of the
have been incorporated under the provision by using the word “may”
in case of any other person and the word “shall” in case of a person
neither found in Section 101 nor in Section 3 of the 1872 Act, which
Professor Glanville Williams in his book - The Proof of Guilt has also
of obtaining convictions, also the law and order gets into the turmoil.
377 Narendra Singh & Anr. vs. State of M.P., (2004) 10 SCC 699
378 (2001) 6 SCC 16
379 For short, “1881 Act”
193
stated that there is a need to balance the rights of the accused with
Ors. vs. Govt. of Kerala & Anr.382 to state that the purpose of law
crime and, therefore, the provision is in line with the 47th Law
such as the IPC and the 1872 Act also provide for the reverse burden
the provisions of the IPC and the 1872 Act. Thus, it cannot be said
383 Mukesh Singh vs. State (Narcotic Branch of Delhi), (2020) 10 SCC 120
195
(xxv) It is submitted that to give effect to the object of the NDPS Act,
the Court in Noor Aga vs. State of Punjab & Anr.384, upheld the
proof. Reliance has also been placed on Seema Silk & Sarees &
the FERA, which provides for reverse burden of proof, to state that
on Sodhi Transport Co. & Ors. vs. State of U.P. & Ors.386 to state
unconstitutional.
prima facie case against the accused has to be made out by the
charges against the accused under Section 3 of the PMLA itself acts
when the presumption against the accused is applied then also the
and Section 106 of the 1872 Act to submit that similar results would
appear even if the provision like Section 24(a) of the PMLA was not
illustration, it has been explained that the results of Section 106 and
proving that the person has nothing to do with the proceeds of crime
is on that person itself because of Section 106 of the 1872 Act, which
states that when any fact is especially within the knowledge of any
person, the burden of proving that fact is upon him. Reliance has
Anr.389, wherein it was held that the facts regarding date of birth,
place of birth, name of parents, place of citizenship and birth, are all
parties that the Court in Noor Aga390 and Tofan Singh391 has read
and only then the presumption under Section 54 of the NDPS Act
will apply.
can be raised at the stage of bail and other proceedings, prior to the
the Court has to be satisfied that the accused is not guilty of the
392State of Madras vs. A. Vaidyanatha Iyer, AIR 1958 SC 61 and M. Narsinga Rao vs. State of
A.P., (2001) 1 SCC 691
200
of its discretion.
Authority.
person for any act committed prior to the PMLA or prior to the
i.e., making an act a crime for the first time and making that law
that which might have been inflicted under the law in force when the
act was committed. Reference has been made to Rao Shiv Bahadur
Singh & Anr. vs. The State of Vindhya Pradesh395 to urge that
sentence and not trial thereof. It has been further emphasized that
the expression ‘law in force’ used in Article 20(1), refers to the law in
law.
the PMLA is not to punish the accused for the scheduled offence, but
passing396.
396The State of Maharashtra vs. Vishnu Ramchandra, (1961) 2 SCR 26 and Sajjan Singh vs. The
State of Punjab, (1964) 4 SCR 630
203
taken place prior to the coming into force of the NDPS Act, but opium
Act. Inter alia, the conviction under the NDPS Act was challenged
on the ground that there can be ex post facto application of the NDPS
Act. This Court, while upholding the conviction and rejecting the
of an offence under the PMLA, the date of coming into force of the
PMLA i.e., 01.07.2005 or the date when the predicate offence was
the limitation period is the date on which the offence was committed.
Court while dealing with Section 630 of the Companies Act, held that
400 469. Commencement of the period of limitation.—(1) The period of limitation, in relation
to an offender, shall commence,—
(a) on the date of the offence; or
(b) where the commission of the offence was not known to the person aggrieved by the
offence or to any police officer, the first day on which such offence comes to the knowledge
of such person or to any police officer, whichever is earlier; or
(c) where it is not known by whom the offence was committed, the first day on which the
identity of the offender is known to the person aggrieved by the offence or to the police
officer making investigation into the offence, whichever is earlier.
(2) In computing the said period, the day from which such period is to be computed shall be
excluded.
401472. Continuing offence.—In the case of a continuing offence, a fresh period of limitation
shall begin to run at every moment of the time during which the offence continues.
402 Section 472 of the Cr.P.C.
403 (1991) 2 SCC 141.
205
that such an offence is committed over a span of time and the last
possession after 01.07.2005 shall fall within the ambit of the Act
offence, the cause of action for which renews with every day of
Section 2(h)407 of the Cr.P.C. is different from that under the PMLA,
upon the registration of the FIR, can the police officer start
…..
(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),
or any other provision of this Act, no police officer shall investigate into an offence under this
Act unless specifically authorised, by the Central Government by a general or special order,
and, subject to such conditions as may be prescribed.
208
to cognizable offences for which an FIR under Section 154 has been
under Section 18, etc. This further implies that unlike the procedure
17(1)(iv) and Section 5(1) of the PMLA which empower the Director
410H.N. Rishbud and Inder Singh vs. The State of Delhi, (1955) 1 SCR 1150; Union of India vs.
Prakash P. Hinduja & Anr., (2003) 6 SCC 195; and Manubhai Ratilal Patel through Ushaben vs.
State of Gujarat & Ors., (2013) 1 SCC 314
411State of West Bengal & Ors. vs. Swapan Kumar Guha & Ors., (1982) 1 SCC 561 and
Shashikant (supra at Footnote No.114).
209
a cognizable offence.
so long as the same are not inconsistent with the provisions of the
an FIR does not fall into any of seven categories contemplated under
Section 65, Section 154 of the Cr.P.C. will not apply to proceedings
parties that the failure to supply a copy of the ECIR prejudices the
would defeat the purpose of the Act and would frustrate recovery
that a copy of the ECIR would be useful for grant of anticipatory bail.
414Shri Gurbaksh Singh Sibbia & Ors. vs. State of Punjab, (1980) 2 SCC 565; Deepak Mahajan
(supra at Footnote No.60); and Sushila Aggarwal (supra at Footnote No.318)
415 Superintendent of Police, CBI & Ors. vs. Tapan Kumar Singh, (2003) 6 SCC 175
211
only the Director or any other officer not below the rank of Deputy
Director, who are high ranking officials, can authorise a search and
the officer conducting the search shall forward a copy of the reasons
records or property shall, within a period of thirty days from the date
not be retained.
concerned Authority417.
R.S. Seth Gopikrishan Agarwal vs. R.N. Sen, Assistant Collector of Customs & Ors., (1967) 2
417
SCR 340.
213
released if there are no reasonable grounds for search are found after
418 Section 18(3). The inherent value of such a right has been recognised by this Court in State
of Punjab vs. Baldev Singh, (1999) 6 SCC 172
419 Section 18(5) of the PMLA
420 Section 18(6) of the PMLA
421 Section 18(7) of the PMLA
422 Section 18(8) of the PMLA
214
Section 102 of the Cr.P.C., and empowers a police officer to seize any
17(1) of the PMLA which permits seizure only when there is a reason
power only upon the Director or any other officer not below the rank
of Deputy Director.
& Ors. etc.424 and Dr. Partap Singh & Anr. vs. Director of
submitted that the PMLA serves a two-fold purpose of not only being
crime’, and it is submitted that the use of these words show that the
argument of the private parties that the Authority under the PMLA
PMLA states that the provisions of Cr.P.C. shall apply subject to the
condition that the same are not inconsistent with those of the PMLA.
Cr.P.C. prior to the conduct of a search under Section 17. After the
217
of Section 5 has been amended four times in the years 2009, 2013,
2009 and second proviso was inserted for the first time which made
money-laundering.
FATF and the Asia Pacific Group that the confiscation of criminal
who has nothing to do with the scheduled offence or even with the
offence of money-laundering.
may come to rest with someone who has not committed any offence.
219
Act, 2012 and deleted the requirement that attachment can be made
only qua the person who has been charged for committing the
also the properties used for the commission of the offence of money-
Section 5 is very wide, which not only covers persons who are
is also submitted that under the second proviso the Parliament has
second proviso and not ‘any property’. It is urged that the ambit of
the main Section, however, in many cases, Courts have treated even
2(1)(u) of the PMLA that the proceeds of crime would not only cover
427The Georgia Railroad and Banking Company vs. James M. Smith, 128 US 174 (1888) and
Commissioner of Stamp Duties vs. Atwill & Ors., (1973) 1 All ER 576
223
been placed on Attorney General for India & Ors. vs. Amratlal
also been relied upon to state that the attachment of property can
the suit during the pendency of the suit430. It is submitted that the
It is submitted that the Authority under the Act will have to first
apply its mind to the materials on record and record its reasons to
justice do not get violated. Eighthly, the noticee will have the
(lv) Further, under Section 8(6) of the PMLA, the Special Court is
the PMLA before the High Court on any question of fact or question
state that the Bombay High Court has even before the amendment
B. Rama Raju vs. Union of India & Ors.433, Alive Hospitality and
Union of India & Ors.436 and J. Sekar vs. Union of India &
Ors.437.
submitted that ‘no person has a right to enjoy the fruits of a property
FATF (2012).
Act.
228
Kumar Jaiswal & Ors. vs. State of Bihar & Ors., (2016) 3 SCC 183
229
under the Act by way of filing a complaint before the Special Court
Section 8(3) of the PMLA will be three hundred and sixty-five days or
under the Act440. Therefore, it is stated that even if for some reason
a complaint has not been filed after three hundred and sixty-five
days from the date of attachment then such attachment should not
lapse.
finally confirmed, then no person can claim any right, title or interest
the proceeds of crime. It is stated that the object of the Act is also
manifest from Section 8(7) where even after the death of the accused
CONSIDERATION
18. We have heard Mr. Kapil Sibal, Dr. Abhishek Manu Singhvi,
Mr. Siddharth Aggarwal, Mr. Aabad Ponda, Mr. N. Hariharan and Mr.
parties and Mr. Tushar Mehta, learned Solicitor General of India and
19. The Act was enacted to address the urgent need to have a
with the proceeds of crime. This need was felt world over owing to
the summit of seven major industrial nations held in Paris from 14th
concluded on the 8th to the 10th June, 1998, urging the State parties
the Bill which became the 2002 Act. The same reads thus:
“INTRODUCTION
Money-laundering poses a serious threat not only to
the financial systems of countries, but also to their
integrity and sovereignty. To obviate such threats
international community has taken some initiatives. It has
been felt that to prevent money-laundering and connected
activities a comprehensive legislation is urgently needed. To
achieve this objective the Prevention of Money-laundering Bill,
1998 was introduced in the Parliament. The Bill was referred
to the Standing Committee on Finance, which presented its
report on 4th March, 1999 to the Lok Sabha. The Central
Government broadly accepted the recommendation of the
Standing Committee and incorporated them in the said Bill
along with some other desired changes.
(emphasis supplied)
Notably, before coming into force of the 2002 Act, various other
(inserted in 2013)];
in 2003];
236
Disposal of Property];
States]; and
(15 of 2003)”.
20. The broad framework of the 2002 Act is that it consists of ten
VIII is regarding the Authorities under the Act and their jurisdiction
Central Government has made rules for carrying out the provisions
of the Act. The said rules deal with different aspects namely:
with the Material, and Copy of the Reasons along with the
We may further note that the 2002 Act has been amended from time
to time to address the exigencies and for the need to strengthen the
Bill. At the outset, it was made clear to all concerned that the said
vires.
Even the Preamble of the Act reinforces the background in which the
its due significance while keeping in mind the legislative intent for
laundering recognised world over and with the need to deal with it
sternly.
245
DEFINITION CLAUSE
442 Subs. by Act 28 of 2016, sec. 232(a), for “established under” (w.e.f. 1-6-2016)
443 Ins. by Act 20 of 2005, sec. 2 (w.e.f. 1-7-2005)
246
444 Ins. by the Finance Act, 2015 (20 of 2015), sec. 145(i) (w.e.f. 14-5-2015).
445Ins. by Act 13 of 2018, sec. 208(a) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April,
2018)
446 Ins. by the Finance (No.2) Act, 2019, sec. 192(iii) (w.e.f. 1-8-2019)
447 Ins. by Act 2 of 2013, sec. 2(x) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8.2.2013).
247
448
[(ii) the offences specified under Part B of the
Schedule if the total value involved in such offences is
449
[one crore rupees] or more; or]
450
[(iii) the offences specified under Part C of the
Schedule;]
(z) “Special Court” means a Court of Session designated
as Special Court under sub-section (1) of section 43;
(za) “transfer” includes sale, purchase, mortgage, pledge,
gift, loan or any other form of transfer of right, title,
possession or lien;
(zb) “value” means the fair market value of any property
on the date of its acquisition by any person, or if such
date cannot be determined, the date on which such
property is possessed by such person”
Clause (na) of Section 2(1). It includes all proceedings under the Act
Chapter VIII of the Act, under Chapter V of the Act, and for
448Subs. by Act 21 of 2009, sec. 2(vi), for sub-clause (ii) (w.e.f. 1-6-2009). Sub-clause (ii), before
substitution, stood as under:
“(ii) “the offences specified under Part B of the Schedule if the total value involved in
such offence is thirty lakh rupees or more;”
449Subs. by the Finance Act, 2015 (20 of 2015), sec. 145(ii), for “thirty lakh rupees” (w.e.f.
14.5.2015)
450 Subs. by Act 21 of 2009 (see Footnote No.448)
248
before the Special Courts constituted under Chapter VII of the Act.
2002 Act subject to the outcome of the trial of the offence under the
(i.e., Section 6), including before the Special Court (i.e., Section 43).
Authority.
250
to be filed against the person from whom the property has been
Finance (No.2) Act, 2019, took within its sweep any property
Schedule to the Act) or the value of any such property. Vide Finance
the inserted Explanation itself. The fact that it also includes any
252
means may be actionable for tax violation and yet, will not be
crime, the property associated with the scheduled offence must have
254
2002 Act or any of the scheduled offences. In the earlier part of this
judgment, we have already noted that every crime property need not
it would become property for the purpose of taking action under the
The authorities under the 2002 Act cannot resort to action against
scheme of the law of this land is that any law which is questioned is
under Section 3 of the 2002 Act. Thereafter, we will see how the
this Court.
trite to refer to the tenets that have been laid down in what are
“Article 3
OFFENCES AND SANCTIONS
1. Each Party shall adopt such measures as may be
necessary to establish as criminal offences under its
domestic law, when committed intentionally:
a)(i) to (v) ….
b) i) The conversion or transfer of property, knowing
that such property is derived from any offence or
offences established in accordance with subparagraph a)
of this paragraph, or from an act of participation in such
offence or offences, for the purpose of concealing or
disguising the illicit origin of the property or of
assisting any person who is involved in the commission of
such an offence or offences to evade the legal consequences
of his actions;
259
understating that pointed to the fact that there was a need to project
However, the growth of the jurisprudence in this law did not stop or
and into a digital age, criminals found new ways to launder and the
law found new ways to tackle them. In the meanwhile, the FATF was
Today, as we will see, many of the amendments in the 2002 Act are
“Recommendation 1
….
Consistency with the United Nations Conventions
137. The Vienna and Palermo Conventions require
countries to establish a criminal offence for the
following knowing/intentional acts: conversion or
transfer of proceeds for specific purposes; concealment
or disguise of the true nature, source, location,
disposition, movement or ownership of or rights with
264
(emphasis supplied)
from public records that India has time and again, since the
inception of the Act, made active efforts to follow and evolve its own
which is not per se the same as the colloquial term, “money launder”
Bill, it is as follows:
452National and International Anti-Money Laundering Law, Benjamin vogel and Jean-Baptiste
Maillart, Max Planck Institute, 2020 ed. Pg. 798.
269
This speech, thus, set the tone for the years to come in our fight
brought into force in 2005. Later, a speech was made by the then
17.12.2012
Act – Pg 226‐235 of the Debate on the Finance Bill, 2019 it was noted
that:
“….
4. It has been experienced that certain doubts are also
raised as regards definition of ‘Offence of money
laundering’ included in section 3 of the Act of 2002. It
is observed that the legislative intent and object of the
Act of 2002 is wrongly construed as if all the activities
as mentioned therein are required to be present
together to constitute the offence of Money
Laundering. The intention of the legislature had always
been that a person shall be held to be guilty of offence
of money-laundering if he is found to have directly or
indirectly attempted to indulge or knowingly assisted
or knowingly is a party or is actually involved in any
one or more of the process of activity included in
section 3 of the Act of 2002. It is also observed that the
original intention of the legislature is wrongly
construed to interpret as if the offence of money
laundering is a one time instantaneous offence and
finishes with its concealment or possession or
acquisition or use of projecting it as untainted property
or claiming it as untainted property. The intention of
the legislature had always been that a person will be
held to be guilty of offence of money-laundering and
will be punished as long as person is enjoying the
“proceeds of crime” by its concealment or possession
or acquisition or use or projecting it as untainted
property or claiming it as untainted property or in any
manner whatsoever. Accordingly, an Explanation is
proposed to be inserted in section 3 of the Act of 2002
to clarify the above legislative intent.”
(emphasis supplied)
272
453Seventeenth Series, Vol. III, First Session, 2019/1941 (Saka) No. 24, Thursday, July 18,
2019 / Ashadha 27, 1941 (Saka)
273
Government and the Parliament that with the passage of time and
note that there has been a constant flow of thought from the FATF
454 GOVERNMENT BILLS — Contd. The Appropriation (No. 2) Bill, 2019 And The Finance (No.
2) Bill, 2019 [23 July, 2019]
455 See debate of 25 July, 2002- RAJYA SABHA; available at:
https://rsdebate.nic.in/bitstream/123456789/100942/1/PD_196_25072002_9_p237_p288_
21.pdf
274
understating of Section 3 that will help not only stop but prevent
37. Coming to Section 3 of the 2002 Act, the same defines the
amply clear from the original provision, which has been further
456Subs. by Act 2 of 2013, sec. 3, for “proceeds of crime and projecting” (w.e.f. 15-2-2013, vide
S.O. 343(E), dated 8-2-2013)
457 Ins. by the Finance (No.2) Act, 2019, sec. 193 (w.e.f. 1-8-2019)
276
restate the stand taken by India in the proceedings before the FATF,
law (Act of 2002) had been amended from time to time to incorporate
“Core Recommendations
Recommendations Rating Summary of Actions taken to remedy
Factors deficiencies
underlying
Rating
1-ML offence PC • (High) Amendments to India’s
monetary Prevention of Money
(emphasis supplied)
280
regard to the fact that India is a party to the said treaties. This Court
the same clearly mention that the word “and” in Section 3 of the
2002 Act would not be fully in line with the Vienna and Palermo
amongst other Sanjay Dutt464, which had occasion to deal with the
covered under Section 5 when any one of them carrying more would
of Section 3 of the 2002 Act. To the same end, this Court in the case
of Ishwar Singh Bindra & Ors. vs. The State of U.P.465, Joint
legislative intent.
above468.
the expression “and” in Section 3 as “or”, to give full play to the said
3 of the 2002 Act can be easily frustrated by the simple device of one
42. From the bare language of Section 3 of the 2002 Act, it is amply
offence for the purpose of the 2002 Act, but if a person has indulged
say so the predicate offence has been committed. The relevant date
and were in force till 31.7.2019); and the same has been merely
discontent in any society and in turn leads to more crime and civil
unrest. Thus, the onus on the Government and the people to identify
steps towards such a cause, we cannot but facilitate the good steps.
save the basic tenets of the fundamental rights and laws of this
and objectives behind the 2002 Act and also adequately address the
meaning of the definition and clarifies the mist around its true
nature.
289
48. Let us now also refer to the various cases that have been
pressed into service by the petitioners. The same deal with the
which it can stretch. Yet given the present scenario, we cannot find
Varghese473 wherein the Court noted the Heydon Case and to the
fact that the speech of the mover of the bill can explain the reason
for introduction of the bill and help ascertain the mischief sought to
However, in the present case we find that the Explanation only sets
forth in motion to clear the mist around the main definition, if any.
Palermo Conventions.
49. Reference has also been made to judgments which refer to the
Bysack vs. Shyam Sunder Haldar & Ors.479, Chandroji Rao vs.
Singh & Ors. vs. Union of India & Ors.482, Sakshi vs. Union of
India & Ors.483, Guntaiah & Ors. vs. Hambamma & Ors.484 and
already held that the Explanation only goes on to clarify the main or
issue, are the cases of D.R. Fraser & Co. Ltd. vs. The Minister of
come post the judgment, hence, will have no real bearing, unless it
Bill, the Select Committee of the Rajya Sabha had pointed out that
“The Committee finds that sub-clauses (a) and (c) viewed ·in
the context of the provisions contained in clause 23 of the
Bill may lead to harassment of innocent persons who
bona fide and unknowingly deal with the persons who
have committed the offence of money laundering and
enter into transactions with them. Such persons
purchasing property born out of proceeds of crime without
having any inkling whatsoever about that are liable to be
prosecuted if the sub-Clauses (a) & (c) remain in the Bill in
the existing form.
The fact of the matter is that these sub-clauses do not
provide any protection or defence to this category of
persons.”
(emphasis supplied)
was added the initial definition in the 2002 Act. However, it can also
be inferred from here that since the initial strokes of drafting the Act,
the intention was always to have a preventive Act and not simply a
the money can be simply wired abroad at one click of the mouse. It
is also well known that once this money leaves the country, it is
view that Section 3 should only find force once the money has been
laundered, does not commend to us. That has never been the
51. We may also note that argument that removing the necessity of
projection from the definition will render the predicate offence and
and fallacious. This plea cannot hold water for the simple reason
generated as a result of such acts that the 2002 Act steps in as soon
syndicate could then simply keep the money with them for years to
come, the hands of the law in such a situation cannot be bound and
52. The next question is: whether the offence under Section 3 is a
offence (NC case), as the case may be. If the offence so reported is a
crime under Section 2(1)(u) of the 2002 Act, enabling him to take
connected with the proceeds of crime, action under the Act can be
“CHAPTER III
ATTACHMENT, ADJUDICATION AND CONFISCATION
5. Attachment of property involved in money-
laundering.— 490[(1)Where the Director or any other
officer not below the rank of Deputy Director authorised
by the Director for the purposes of this section, has
reason to believe (the reason for such belief to be recorded
490Subs. by Act 2 of 2013, sec. 5, for sub-section (1) (w.e.f. 15-2-2013 vide S.O. 343(E), dated
8-2-2013). Earlier sub-section (1) was amended by Act 21 of 2009, sec. 3(a) (w.e.f. 1-6-2009).
Sub-section (1), before substitution by Act 2 of 2013, stood as under:
“(1) Where the Director, or any other officer not below the rank of Deputy Director
authorised by him for the purposes of this section, has reason to believe (the reason for
such belief to be recorded in writing), on the basis of material in his possession, that—
(a) any person is in possession of any proceeds of crime;
(b) such person has been charged of having committed a scheduled offence; and
(c) such proceeds of crime are likely to be concealed, transferred or dealt with in any
manner which may result in frustrating any proceedings relating to confiscation of such
proceeds of crime under this Chapter,
he may, by order in writing, provisionally attach such property for a period not exceeding
one hundred and fifty days from the date of the order, in the manner provided in the
Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or the other
office so authorised by him, as the case may be, shall be deemed to be an officer under
sub-rule (e) of rule 1 of that Schedule:
491 Subs. by the Finance Act, 2015 (20 of 2015), sec. 146, for “clause (b)” (w.e.f. 14-5-2015).
302
492Ins. by Act 13 of 2018, sec. 208(b)(i) (w.e.f. 19-4-2018 vide G.S.R. 383(E), dated 19th April,
2018).
493Subs. by Act 13 of 2018, sec. 208(b)(ii), for “sub-section (2)” (w.e.f. 19-4-2018 vide G.S.R.
383(E), dated 19th April, 2018).
(2) The Director, or any other officer not below the rank of Deputy Director, shall,
immediately after attachment under sub-section (1), forward a copy of the order, along
with the material in his possession, referred to in that sub-section, to the Adjudicating
Authority, in a sealed envelope, in the manner as may be prescribed and such
Adjudicating Authority shall keep such order and material for such period as may be
prescribed.
(3) Every order of attachment made under sub-section (1) shall cease to have effect after
the expiry of the period specified in that sub-section or on the date of an order made
under sub-section (2) of Section 8, whichever is earlier.
(4) Nothing in this section shall prevent the person interested in the enjoyment of the
immovable property attached under sub-section (1) from such enjoyment.
(5) The Director or any other officer who provisionally attaches any property under sub-
section (1) shall, within a period of thirty days from such attachment, file a complaint
stating the facts of such attachment before the Adjudicating Authority.”
304
enacting the 2002 Act. This provision has been amended vide Act
Act and the need to prevent and regulate the activity of money-
and Act 2 of 2013, the same are not matters in issue in these cases.
officer has to form his opinion and delineate the reasons for such
exceeding one hundred and eighty days from the date of the order.
provisional attachment.
2002 Act. By amendment vide Finance Act, 2015, the words “clause
words “first proviso”. This is the limited change, but an effective one
impediment and empower the Director or any other officer not below
authorised officer has to record satisfaction and reason for his belief
and also, to ensure that the proceeds of crime are properly dealt with
Government.
under Section 66(2) of the 2002 Act for registering FIR in respect of
information, the authorised officer under the 2002 Act can take
crime are secured and dealt with as per the dispensation provided
for in the 2002 Act. Suffice it to observe that the amendment effected
in 2015 in the second proviso has reasonable nexus with the object
61. The third proviso in Section 5(1) of the 2002 Act is another
attachment order, the Director or any other officer not below the
Section 6(1) of the 2002 Act, headed by, amongst other, person
attachment.
63. In view of the observations made in said Report, the FATF made
recommendations as follows:
(ii)****
The pivot moves around the date of carrying on the process and
activity connected with the proceeds of crime; and not the date on
value held within the country or abroad can be proceeded with. The
69. We find force in the stand taken by the Union of India that the
addresses the broad objectives of the 2002 Act to reach the proceeds
person concerned who is being proceeded with under the 2002 Act,
not below the rank of Deputy Director will have to first apply
iii. The order passed under Section 5(1) of the 2002 Act is only
order passed under Section 5(1) of the 2002 Act is only for 180
Authority.
321
v. Under Section 5(5) of the 2002 Act, the officer making such
made.
vi. Section 5(3) of the 2002 Act provides that the provisional
vii. Under Section 8(1), once the officer making the provisional
the reply to the SCN issued under Section 8(1) of the 2002 Act.
x. While passing order under Section 8(2) read with Section 8(3)
property ceases.
xi. Under Section 8(4) of the 2002 Act, upon confirmation of the
attached.
trial for an offence under the 2002 Act if the Special Court finds
Central Government.
xiv. Under Section 8(7), if the trial before the Special Court
reasonable precautions.
It is, thus, clear that the provision in the form of Section 5 provides
being dealt with in the manner provided by the 2002 Act. This
496 (1) Bombay High Court in Radha Mohan Lakhotia (supra at Footnote No.431); (2) High Court
of Andhra Pradesh in B. Rama Raju (supra at Footnote No.433); (3) High Court of Gujarat in J
Alive Hospitality and Food Private Limited (supra at Footnote No.434); (4) High Court of
Karnataka in K. Sowbaghya (supra at Footnote No.435); (5) High Court of Sikkim at Gangtok in
Usha Agarwal (supra at Footnote No.436); and Delhi High Court in J. Sekar (supra at Footnote
No.437).
327
filed by the authorised officer under Section 5(5) of the 2002 Act or
497 Subs. by Act 21 of 2009, sec. 5, for “offence under section 3” (w.e.f. 1-6-2009).
498 Ins. by Act 2 of 2013, sec. 6(i) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013).
328
499 Subs. by Act 2 of 2013, sec. 6(ii)(a), for “record seized under section 17 or section 18 and
record a finding to that effect, such attachment or retention of the seized property” (w.e.f. 15-2-
2013), vide S.O. 343(E), dated 8-2-2013.
329
500Ins. by Act 13 of 2018, sec. 208(c)(i) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April,
2018).
501Subs. by Act 7 of 2019, sec. 22(i), for “ninety days” (w.e.f. 20-3-2019, vide G.S.R. 225(E),
dated 19th March, 2019).
502Subs. by Act 2 of 2013, sec. 6(ii)(b), for “Scheduled offence before a Court and” (w.e.f. 15-2-
2013, vide S.O. 343(E), dated 8-2-2013).
503Subs. by Act 2 of 2013, sec. 6(ii)(c), for clause (b) (w.e.f. 15-2-2013, vide S.O. 343(E), dated
8-2-2013). Clause (b), before substitution, stood as under:
“(b) become final after the guilt of the person is proved in the trial court and order of
such trial court becomes final”.
504Subs. by the Finance Act, 2015 (20 of 2015), sec. 147(i), for “Adjudicating Authority” (w.e.f.
14-5-2015).
505Ins. by Act 7 of 2019, sec. 22(ii) (w.e.f. 20-3-2019, vide G.S.R. 225(E), dated 19th March,
2019).
506Subs. by Act 2 of 2013, sec. 6(iii), for “possession of the attached property” (w.e.f. 15-2-2013,
vide S.O. 343(E), dated 8-2-2013).
330
507Subs. by Act 2 of 2013, sec. 6(iv), for sub-sections (5) and (6) (w.e.f. 15-2-2013, vide S.O.
343(E), dated 8-2-2013). Sub-sections (5) and (6), before substitution, stood as under:
“(5) Where on conclusion of a trial for any scheduled offence, the person concerned is
acquitted, the attachment of the property or retention of the seized property or record
under sub-section (3) and net income, if any, shall cease to have effect.
(6) Where the attachment of any property or retention of the seized property or record
becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after
giving an opportunity of being heard to the person concerned, make an order
confiscating such property.”
508 Ins. by the Finance Act, 2015 (20 of 2015), sec. 147(ii) (w.e.f. 14-5-2015).
331
509Ins. by Act 13 of 2018, sec. 208(c)(ii) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April,
2018).
332
relating to any offence under the 2002 Act before a Court or under
the corresponding law of any country outside India and become final
sixty-five days after reckoning the stay order of the Court, if any.
Section 8(3)(a) of the 2002 Act does not clearly provide for the
before the Special Court under Section 44(1)(b) for initiating criminal
would operate only for a period of one hundred and eighty days from
the date of order passed under Section 5(1) of the 2002 Act in terms
hundred and sixty-five days from the passing of the order under sub-
outside India, as the case may be. We need not elaborate on this
aspect any further and leave the parties to agitate this aspect in
passed under Section 5(1) is confirmed, it does not follow that the
possession of the attached property would arise only for giving effect
observe that direction under Section 8(4) for taking possession of the
75. The learned counsel appearing for the Union of India, had
and 2012 to justify the provision under consideration. The fact that
the property as not being proceeds of crime or for any other valid
taking possession of the property and then returning the same back
this Court in Divisional Forest Officer & Anr. vs. G.V. Sudhakar
Jaiswal & Ors. vs. State of Bihar & Ors.512, will be of no avail in
2002 Act.
the 2002 Act, dealing with summons, searches and seizures, etc.
Authorities under the 2002 Act. They have been empowered to enter
upon any place within the limits of the area assigned to them or in
seizure, Section 17 of the 2002 Act permits only the Director or any
513 Subs. by Act 21 of 2009, sec. 7(i), for “the Director” (w.e.f. 1-6-2009)
340
514 Ins. by Act 2 of 2013, sec. 14(i)(a) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013)
515 Ins. by Act 2 of 2013, sec. 14(i)(b) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013)
516 Ins. by Act 2 of 2013, sec. 14(i)(c) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013)
517Proviso omitted by the Finance (No.2) Act, 2019, sec. 197 (w.e.f. 1-8-2019). Earlier the
proviso was substituted by Act 2 of 2013, sec. 14(i)(d) (w.e.f. 15-2-2013, vide S.O. 343(E), dated
8-2-2013) and by Act 21 of 2009, sec. 7(ii) (w.e.f. 1-6-2009). The Proviso, before omission, stood
as under:
“Provided that no search shall be conducted unless, in relation to the scheduled offence,
a report has been forwarded to a Magistrate under section 157 of the Code of Criminal
Procedure, 1973 (2 of 1974) or a complaint has been filed by a person, authorised to
investigate the offence mentioned in the Schedule, before a Magistrate or court for taking
cognizance of the scheduled offence, as the case may be, or in cases where such report
is not required to be forwarded, a similar report of information received or otherwise has
been submitted by an officer authorised to investigate a scheduled offence to an officer
not below the rank of Additional Secretary to the Government of India or equivalent being
head of the office or Ministry or Department or Unit, as the case may be, or any other
341
officer who may be authorised by the Central Government, by notification, for this
purpose”
518 Ins. by Act 2 of 2013, sec. 14(ii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013).
519 Ins. by Act 2 of 2013, sec. 14(iii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013).
520Subs. by Act 2 of 2013, sec. 14(iv), for sub-section (14) (w.e.f. 15-2-2013, vide S.O. 343(E),
dated 8.2.2013). Sub-section (14), before substitution, stood as under:
“(4) The authority, seizing any record or property under this section shall, within a period
of thirty days from such seizure, file an application, requesting for retention of such
record or property, before the Adjudicating Authority.”
342
Act 21 of 2009, Act 2 of 2013 and finally by the Finance (No.2) Act,
vide Finance (No.2) Act, 2019 — which provides that no search shall
as the case may be, or in cases where such report is not required to
and seizures, have been envisaged and that such drastic power is
unconstitutional.
Section 71520A of the 2002 Act, which predicates that the provisions
therewith contained in any other law for the time being in force,
which includes the provisions of the 1973 Code. Even Section 65520B
of the 2002 Act predicates that the provisions of the 1973 Code shall
apply, insofar as they are not inconsistent with the provisions of the
520A 71. Act to have overriding effect.—The provisions of this Act shall have effect notwithstanding
anything inconsistent therewith contained in any other law for the time being in force.
520B 65. Code of Criminal Procedure, 1973 to apply.—The provisions of the Code of Criminal Procedure,
1973 (2 of 1974) shall apply, insofar as they are not inconsistent with the provisions of this Act, to arrest,
search and seizure, attachment, confiscation investigation, prosecution and all other proceedings under
this Act.
344
placed on Sections 4521 and 5522 of the 1973 Code. Section 4(2)
pertains to offences under other laws (other than IPC) which are
to the contrary, affect any special or local law for the time being in
form of procedure prescribed, by any other law for the time being in
force.
5214. Trial of offences under the Indian Penal Code and other laws.—(1) All offences under
the India Penal Code (45 of 1860) shall be investigated, inquired into, tried, and otherwise dealt
with according to the provisions hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise
dealt with according to the same provisions, but subject to any enactment for the time being in
force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing
with such offences.
522 5. Saving.—Nothing contained in this Code shall, in the absence of a specific provision to
the contrary, affect any special or local law for the time being in force, or any special jurisdiction
or power conferred, or any special from of procedure prescribed, by any other law for the time
being in force.
345
dealt with under the 2002 Act. We have already noted in the earlier
2002 Act, that power can be exercised only by the Director or any
him. They are not only high-ranking officials, but have to be fully
is prescribed under the Rules framed in that regard. Such are the
the 2002 Act, coupled with the fact that the purpose and object of
deletion of the first proviso has reasonable nexus with the objects
proceeds of crime for being dealt with appropriately under the 2002
Act.
search and seizure. This is unlike the provision in the 1973 Code
where any police officer including the Head Constable can proceed
2002 Act are not only to investigate into the offence of money-
82. The process of searches and seizures under the 2002 Act are,
therefore, not only for the purposes of inquiring into the offence of
of the 2002 Act and Rules framed regarding the process of searches
Customs & Ors.525, dealing with Sections 105 and 136 of the
Customs Act. In the case of Dr. Partap Singh526, this Court upheld
the 1973 Code by pen and ink in that section, as is the argument
in terms of Section 17(4) of the 2002 Act the Authority seizing the
property, as the case may be, under the 2002 Act and the Rules
62 of the 2002 Act for vexatious search and giving false information.
provided under Section 17 of the 2002 Act and the Rules framed
for investigating into any offence. This power can be exercised by any
86. It was urged that the Rule 3(2) proviso in the 2005 Rules
of the 2002 Act vide Finance (No.2) Act, 2019. In the first place, it
not consistent with the provisions of the Act, the amended provisions
in the Act must prevail. The statute cannot be declared ultra vires
the proviso in Rule 3(2) cannot be read into Section 17 of the 2002
in Section 17(1) of the 2002 Act. In any case, it is open to the Central
SEARCH OF PERSONS
which was pari materia with the proviso in Section 17(1) of the 2002
a Magistrate under Section 157 of the 1973 Code, etc. The Section
527Proviso omitted by the Finance (No.2) Act, 2019, sec. 198 (w.e.f. 1-8-2019). Earlier the
proviso was inserted by Act 21 of 2009, sec. 8(i) (w.e.f. 1-6-2009) and substituted by Act 2 of
2013, sec. 15 (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013). The proviso, before omission,
stood as under:
“Provided that no search of any person shall be made unless, in relation to the scheduled
offence, a report has been forwarded to a Magistrate under section 157 of the Code of
Criminal Procedure, 1973 (2 of 1974) or a complaint has been filed by a person,
authorised to investigate the offence mentioned in the Schedule, before a Magistrate or
court for taking cognizance of the scheduled offence, as the case may be, or in cases
where such report is not required to be forwarded, a similar report of information
received or otherwise has been submitted by an officer authorised to investigate a
scheduled offence to an officer not below the rank of Additional Secretary to the
Government of India or equivalent being head of the office or Ministry or Department or
Unit, as the case may be, or any other officer who may be authorised by the Central
Government, by notification, for this purpose”
355
528Proviso omitted by Act 21 of 2009, sec. 8(ii) (w.e.f. 1-6-2009). Proviso, before omission, stood
as under:
“Provided that no search of any person shall be made unless, in relation to an offence
under:
(a) Paragraph 1 of Part A or Paragraph 1 or Paragraph 2 or Paragraph 3 or Paragraph 4
or Paragraph 5 of Part B of the Schedule, a report has been forwarded to a Magistrate
under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or
(b) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed
for taking cognizance of an offence by the Special Court constituted under sub-section
(1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of
1985).”
356
proviso in Section 17(1) of the 2002 Act, the same would apply with
Section 18(3) of the 2002 Act, the Authority is obliged to take the
as follows:
person has to prepare a list of the record or the property seized which
ARREST
giving rise to reason to believe that any person has been guilty of an
360
offence punishable under the 2002 Act, he may arrest such person.
grounds for such arrest are informed to that person. Further, the
authorised officer has to forward a copy of the order, along with the
530Ins. by Act 13 of 2018, sec. 208 (d)(i) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April,
2018).
531Ins. by Act 13 of 2018, sec. 208 (d)(ii) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April,
2018).
362
167 of the 1973 Code would suggest that the person can be arrested
89. This argument clearly overlooks the overall scheme of the 2002
Chapter VIII have been authorised to make inquiry into all matters
to in Chapter VIII of the 2002 Act to maintain law and order or for
other words, the role of the Authorities appointed under Chapter VIII
of the 2002 Act is such that they are tasked with dual role of
conferred upon them under Chapters III and V of the 2002 Act and
also to use the same materials to bolster the allegation against the
has reason to believe that any person in India or within the Indian
it noted that the term “arrest” has neither been defined in the 1973
Code nor in the Indian Penal Code, 1860 nor in any other enactment
dealing with offences. This word has been derived from the French
not act arbitrarily, but make them accountable for their judgment
Kumar536, the Court restated the position that where the discretion
authority vested with the power may abuse his authority. (Also see
proceeds of crime are not dealt with in any manner which may result
BURDEN OF PROOF
91. The validity of Section 24 of the 2002 Act has been assailed.
This section has been amended in 2013 vide Act 2 of 2013. Before
the countries should adopt measures similar to those set forth in the
under:
recommendations as follows:
came into force with effect from 15.2.2013 and reads thus:
crime under the 2002 Act. The expression “proceeding” has not been
defined in the 2002 Act or the 1973 Code. However, in the setting
539Subs. By Act 2 of 2013, sec. 19, for section 24 (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-
2-2013).
372
as per Section 8 of the 2002 Act. This provision (Section 24) must,
92. It is, thus, clear that this special provision regarding burden of
and not limited to the proceeding before the Special Court. That is
the criminality of the offence under Section 3 of the 2002 Act. When
relied upon in the proceeding before the Special Court regarding trial
The first part concerns the person charged with the offence of
concerns any other person. Taking the second part first, such other
person would obviously mean a person not charged with the offence
Court, Clause (a) would trigger in. As regards the second category
Whereas, qua the first category [covered under Clause (a)] the
that the Court framing charge against him was prima facie convinced
2002 Act, is accepted, in law, the burden must shift on the person
committed and, in any case, the property (proceeds of crime) was not
involved in money-laundering.
541 Subs. by Act 21 of 2000, sec. 92 and Sch.II-1(a), for “all documents produced for the
inspection of the Court” (w.e.f. 17-10-2000)
377
& Ors.543, the pristine rule that the burden of proof is on the
temper of the rule. On the other hand, if the traditional Rule relating
the guilt of the accused beyond reasonable doubt, but the Section
“22. Because both Sections 138 and 139 require that the
court “shall presume” the liability of the drawer of the
cheques for the amounts for which the cheques are
drawn, as noted in State of Madras v. A. Vaidyanatha
Iyer549 it is obligatory on the court to raise this
presumption in every case where the factual basis for the
raising of the presumption had been established. “It
introduces an exception to the general rule as to the
burden of proof in criminal cases and shifts the onus on
to the accused.” (Ibid. at p. 65, para 14.) Such a
presumption is a presumption of law, as distinguished
from a presumption of fact which describes
provisions by which the court “may presume” a
certain state of affairs. Presumptions are rules of
evidence and do not conflict with the presumption of
innocence, because by the latter, all that is meant is
that the prosecution is obliged to prove the case
against the accused beyond reasonable doubt. The
obligation on the prosecution may be discharged with
the help of presumptions of law or fact unless the
accused adduces evidence showing the reasonable
possibility of the non-existence of the presumed fact.
Court from time to time. In the case of Noor Aga552, it has been
Section 24 of the 2002 Act, must keep in mind that the concerned
on the accused, the same, by itself would not render the legal
on the statute and its purport and object. Indeed, it must pass the
within his personal knowledge. Again, in the case of Seema Silk &
Sarees553, this Court restated that a legal provision does not become
that he has not violated the provisions of the Act, such a legal
keeping in mind the legislative scheme and the purposes and objects
sought to be achieved by the 2002 Act coupled with the fact that the
stand rebutted.
385
98. The person falling under the first category being person
formal complaint has already been filed against him by the authority
the 2002 Act, would apply when the person is charged with the
prosecution, the onus must then shift on the person facing charge
follow that the legal presumption that the proceeds of crime are
100. Such onus also flows from the purport of Section 106 of the
the case may be. He may be able to discharge his burden by showing
fact which it thinks likely to have happened, regard being had to the
person other than the person charged with the offence of money-
decision, the Court noted the marked distinction between the words
556 114. Court may presume existence of certain facts.–– The Court may presume the
existence of any fact which it thinks likely to have happened, regard being had to the common
course of natural events, human conduct and public and private business, in their relation to
the facts of the particular case.
557 Supra at Footnote No.549 (also at Footnote No.392)
388
(emphasis supplied)
Adjudicating Authority or the Court, as the case may be. The legal
presumption is about the fact that the proceeds of crime are involved
falling under the other category, namely Section 24(a). If the person
has not been charged with the offence of money-laundering, the legal
390
Authority or the Court, as the case may be. More or less, same logic
the 2002 Act, would apply even to the category of person covered by
SPECIAL COURTS
“CHAPTER VII
SPECIAL COURTS
The Special Courts established under Section 43 of the 2002 Act are
bestows that power in the Special Courts. The same reads thus:
559Subs. by Act 2 of 2013, sec. 21(i), for clause (a) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-
2-2013). Clause (a) before substitution, stood as under:
“(a) the scheduled offence and offence punishable under section 4 shall be triable only
by the Special Court constituted for the area in which the offence has been committed:
Provided that the Special Court, trying a scheduled offence before the
commencement of this Act, shall continue to try such scheduled offence; or”
560The words “upon perusal of police report of the facts which constitute an offence under this
Act or” omitted by Act 20 of 2005, sec. 6 (w.e.f. 1-7-2005).
561Subs. by Act 2 of 2013, sec. 21(ii), for “cognizance of the offence for which the accused is
committed to it for trial” (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013).
562 Ins. by the Finance (No.2) Act, 2019, sec. 199(i) (w.e.f. 1-8-2019)
392
563 Ins. by Act 2 of 2013, sec. 21(iii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013)
564 Ins. by the Finance (No.2) Act, 2019, sec. 199(ii) (w.e.f. 1-8-2019)
393
reads thus:
under this Act and the trial in relation to scheduled offence including
need to proceed before the Special Court constituted for the area in
clear that both the trials after coming into effect of this Act need to
565Subs. by Act 2 of 2013, sec. 21(i), for clause (a) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-
2-2013).
395
prevail over any other law for the time being in force in terms of
already trying the scheduled offence, shall continue to try the same.
Prima facie, it is possible to take the view that the effect of this
Special Court at place x to transfer all other cases in the area (even
the Special Court under the concerned law, if in different area, that
Special Court may continue to try such scheduled offence. For, the
trial of the scheduled offence and the trial in connection with the
with the proceeds of crime which may have been derived or obtained,
has been amended vide Act 20 of 2005, Act 2 of 2013 and the
566The words “upon perusal of police report of the facts which constitute an offence under this
Act or” omitted by Act 20 of 2005, sec. 6 (w.e.f. 1-7-2005).
567Subs. by Act 2 of 2013, sec. 21(ii), for “cognizance of the offence for which the accused is
committed to it for trial” (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013).
568 Ins. by the Finance (No.2) Act, 2019, sec. 199(i) (w.e.f. 1-8-2019).
398
2002 Act without the accused being committed to it for trial. This
would mean that if the accused was already in custody and facing
laundering need not insist for producing the accused before it at the
This provision is only to dispel the doubt that in the event the person
punishable under this Act, but after the inquiry done by him in
before the Special Court disclosing that position. The proviso would,
thus, come into play in such cases where the complaint is yet to be
Chapters V and VIII of the 2002 Act. In that view of the matter and
achieved by the 2002 Act. Accordingly, for the view taken by us, we do
400
the 2002 Act. The same has undergone amendment vide Act 2 of
(a)***
(b)***
569[(c)if the court which has taken cognizance of the
scheduled offence is other than the Special Court which
has taken cognizance of the complaint of the offence of
money-laundering under sub-clause (b), it shall, on an
application by the authority authorised to file a complaint
under this Act, commit the case relating to the scheduled
offence to the Special Court and the Special Court shall,
on receipt of such case proceed to deal with it from the
stage at which it is committed.]”
Section 44. That provision has already been elaborated in the earlier
in terms of this clause. For, this clause also recognises that the trial
569 Ins. by Act 2 of 2013, sec. 21(iii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013)
401
tried by the same Special Court as both are distinct and independent
powers under Section 407 of the 1973 Code. The Court answered
the same in the negative and held that such power does not exist in
provided by the law made by the Parliament in the form of 2002 Act.
Constitution.
evident from the opening statement of the provision which says that
that the jurisdiction of the Special Court while dealing with the
offence being tried under this Act, shall not be dependent upon any
joint trials. This, in fact, is reiteration of the earlier part of the same
section, which envisages that even though both the trials may
as per the provisions of the 1973 Code. Insofar as Clause (ii) of the
mind the provisions of the 1973 Code as well. It is also open to the
provision though permits the Special Court to proceed with the trial
power in the Special Court, it must follow that the Special Court will
NDPS Act, etc. can also be considered by the Special Court on case-
that the same is consistent with the legislative scheme and the
dealt with appropriately as per the special Act and all concerned
407
BAIL
115. The relevant provisions regarding bail in the 2002 Act can be
offence under this Act. The principal grievance is about the twin
576Subs. by Act 20 of 2005, sec. 7, for “Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974),—
(a) every offence punishable under this Act shall be cognizable;
(b) no person accused of an offence punishable for a term of imprisonment of more than
three years under Part A of the Schedule shall be released on bail or on his own bond
unless” (w.e.f. 1-7-2005).
577Subs. by Act 13 of 2018, sec. 208(e)(i), for “punishable for a term of imprisonment of more
than three years under Part A of the Schedule” (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th
April, 2018).
408
578Ins. by Act 13 of 2018, s. 208(e)(ii) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April,
2018).
579 Ins. by Act 20 of 2005, sec. 7 (w.e.f. 1-7-2005).
580 The words “clause (b) of” omitted by Act 20 of 2005, sec. 7 (w.e.f. 1-7-2005).
581 Ins. by the Finance (No.2) Act, 2019, sec. 200 (w.e.f. 1-8-2019).
409
(i) that there are reasonable grounds for believing that he is not
view of the amendment effected to Section 45(1) of the 2002 Act vide
it had never been passed, is contextual. In this case, the Court was
dealing with the efficacy of the repealing Act. While doing so, the
Court had adverted to the repealing Act and made the stated
breathing life into what was a still born piece of legislation. At the
those prohibitions, when once they are removed, the law will become
This decision has not only adverted to two earlier Constitution Bench
is that when this Court has declared the concerned legislation void
should the Court proceed on the basis that the legislation was void
ab initio and non est or still born and, thus, any validating measure
could not instil life therein. After having analysed all the relevant
follows:
Thus, where the defect as pointed out by the Court has been
Parliament has removed the defect or has taken away the basis on
which the provision was declared void then the provision cannot be
be said that twin conditions under Section 45 of the 2002 Act does
119. A priori, it is not open to argue that Section 45 of the 2002 Act
Court declared the twin conditions in Section 45(1) of the 2002 Act
on account of two basic reasons. The first being that the provision,
with objectives of the 2002 Act; and secondly, because the twin
Schedule, and not to all the offences under the 2002 Act. In
paragraph 1 of the same decision, the Court had noted that the
challenge set forth in the writ petition was limited to imposing two
analysed by the Court in the said decision. The Court also noted the
legislative history for enacting such a law and other relevant material
the 2002 Act and substituted by words “under this Act”. The
question is: whether it was open to the Parliament to undo the effect
the Schedule having been deleted and, instead, the twin conditions
419
have now been associated with all the offences under the 2002 Act,
answer the question posed above, we may also usefully refer to the
recognises power of the Legislature to cure the defect when the law
been consistently held that such declaration does not have the effect
vests only in the Parliament and none else. Only upon such repeal
by the Parliament, the provision would become non est for all
book.
420
noted as follows:
124. The legal principles have been recapitulated by this Court once
observed as under:
(emphasis supplied)
There are long line of decisions restating the above position and the
follows:
From the above discussion, it is amply clear that the twin conditions
three years under Part A of the Schedule of the 2002 Act and not
The reasons which weighed with this Court for declaring the twin
19.4.2018.
126. Having said thus, we must now address the challenge to the
challenge will have to be tested on its own merits and not in reference
under Part A of the Schedule to the 2002 Act. Now, the provision
under the 2002 Act itself. The provision post 2018 amendment, is
unless the twin conditions are fulfilled. The twin conditions are that
there are reasonable grounds for believing that the accused is not
objects of the legislation in the form of 2002 Act and the background
laundering.
world over and the transnational impact thereof, coupled with the
reacts to the needs of its own people as per the exigency and
stand the test of fairness, reasonableness and having nexus with the
concerned provisions have been tested from time to time and have
617Central Legislations:- Section 36AC of Drugs and Cosmetics Act, 1940; Section 51A of the
Wild Life (Protection) Act, 1972; Section 6A of the Suppression of Unlawful Acts against Safety
of Civil Aviation Act, 1982; Section 15 Terrorist Affected Areas Act (Special Courts), 1984;
Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985; Section 20 of the
Terrorist and Disruptive Activities (Prevention) Act, 1987; Section 8 of the Suppression Of
Unlawful Acts Against Safety Of Maritime Navigation and Fixed Platforms On Continental Shelf
Act, 2002; Section 212 of the Companies Act, 2013; and Section 12 of the Anti-Hijacking Act,
2016.
State Legislations:- Section 19 of the Uttar Pradesh Gangsters and Anti-Social Activities
(Prevention) Act, 1986; Section 21 of the Maharashtra Control of Organised Crime Act, 1999;
Section 22 of the Karnataka Control of Organized Crime Act, 2000; Section 21 of the Telangana
Control of Organized Crime Act, 2001 (renamed from Andhra Pradesh COCA, 2001); Section 18
of the Sikkim Anti-Drugs Act, 2006; Section 20 of the Gujrat Control of Terrorism and Organised
Crime Act, 2015; Section 19 of the Mizoram Drug (Controlled Substances) Act, 2016; and
Section 18 of the Haryana Control of Organised Crime Act, 2020.
431
have stated that the Court at the stage of considering the application
for grant of bail, is expected to consider the question from the angle
accused had not committed an offence under the Act. The Court
While dealing with the challenge to Section 20(8) of TADA Act, the
“47. ….
It is clear that this Court upheld such a condition only
because the offence under TADA was a most heinous
offence in which the vice of terrorism is sought to be
tackled. Given the heinous nature of the offence which
is punishable by death or life imprisonment, and
given the fact that the Special Court in that case was
a Magistrate and not a Sessions Court, unlike the
present case, Section 20(8) of TADA was upheld as
being in consonance with conditions prescribed
under Section 437 of the Code of Criminal Procedure.
In the present case, it is Section 439 and not Section
437 of the Code of Criminal Procedure that applies.
Also, the offence that is spoken of in Section 20(8) is an
offence under TADA itself and not an offence under some
other Act. For all these reasons, the judgment in Kartar
Singh621 cannot apply to Section 45 of the present Act.”
(emphasis supplied)
any State and the offences under that Act were made exclusively
triable before such Designated Court and not the Magistrate. The
Designated Court being the Sessions Judge for the limited purpose
of proceeding with the case directly before it. This is amply clear,
Sections 20(3)622 and 20(4)623 of the TADA Act. Same is the logic
622 20. Modified application of certain provisions of the Code .- (1) …..
….
(3) Section 164 of the Code shall apply in relation to a case involving an offence punishable
under this Act or any rule made thereunder, subject to the modification that the reference in
sub-section (1) thereof to “Metropolitan Magistrate or Judicial Magistrate” shall be construed as
a reference to “Metropolitan Magistrate”, “Judicial Magistrate, Executive Magistrate or Special
Executive Magistrate”.
Special Court with the powers of the Magistrate. That aspect has
(b) the reference in sub-section (2) thereof the “fifteen days”, “ninety days” and “sixty days”,
wherever they occur, shall be construed as references to “sixty days”, one hundred and
eighty days and one hundred and eighty days respectively; and
(bb) sub-section (2), after the proviso, the following proviso shall be inserted, namely:
“Provided further that, if it is not possible to complete the investigation within the
said period of one hundred and eighty days, the Designated Court shall extend the said
period up to one year, on the report of the Public Prosecutor indicating the progress of
the investigation and the specific reasons for the detention of the accused beyond the
said period of one hundred and eighty days; and.
(c) sub-section (2-A) thereof shall be deemed to have been omitted.
(b) …”
This portion of the judgment of the Constitution Bench has not been
been duly noted even in the opening part of the introduction and
Statement of Objects and Reasons, for which the 2002 Act came into
realize its socialist goal, it becomes imperative for the State to make
such laws, which not only ensure that the unaccounted money is
439
infused back in the economic system of the country, but also prevent
but harm the society as a whole627. Thus, the Law Commission also
heinous crimes, which not only affects the social and economic
Ram Jethmalani & Ors. vs. Union of India & Ors.629, the Court
628 Ram Jethmalani & Ors. vs. Union of India & Ors., (2011) 8 SCC 1
629 (2011) 8 SCC 1 (also at Footnote No.628)
630 Supra at Footnote No.254
441
eye, although the impact of the offence is way greater than that of
effect.
130. In the case of the 2002 Act, the Parliament had no reservation
scope of judicial review. That cannot be the basis to declare the law
manifestly arbitrary.
Section 45 of the 2002 Act, though restrict the right of the accused
(emphasis supplied)
with the application for grant of bail need not delve deep into the
merits of the case and only a view of the Court based on available
material on record is required. The Court will not weigh the evidence
to find the guilt of the accused which is, of course, the work of Trial
investigation and the said view will not be taken into consideration
during trial which is based on the evidence adduced during the trial.
believing” which means the Court has to see only if there is a genuine
extending up to 10 years, with fine not less than the amount involved
(emphasis supplied)
133. This Court has been restating this position in several decisions,
considering the application for bail under Section 45 of the 2002 Act,
upheld by this Court being reasonable and having nexus with the
641 (i) Section 43D(5) of the UAPA [Zahoor Ahmad Shah Watali (supra at Footnote No.290)];
(ii) Section 21(4) of the MCOCA [Vishwanath Maranna Shetty (supra at Footnote No.287);
Chenna Boyanna Krishna Yadav (supra at Footnote No.283) and Ranjitsing Brahmajeetsing
Sharma (supra at Footnote Nos.53 and 275)]; (iii) Section 21(5) of the MCOCA [Bharat Shanti
Lal Shah (supra at Footnote No.285); (iv) Section 37 of the NDPS Act [R. Paulsamy (supra at
Footnote No.277); Gurcharan Singh (supra at Footnote No.278); Ahmadalieva Nodira (supra at
Footnote No.276); Abdulla (supra at Footnote No.280); Karma Phuntsok (supra at Footnote
No.282); N.R. Mon (supra at Footnote No.284); Rattan Mallik alias Habul (supra at Footnote
No.286); Satpal Singh (supra at Footnote No.289); and Niyazuddin Sk. (supra at Footnote
No.288); and (v) Section 212(6) of the Companies Act [Nittin Johari (supra at Footnote No.291)].
449
existed then, and noticed by this Court has been cured by the
is reasonable and has direct nexus with the purposes and objects
countries.
136. It was urged that the scheduled offence in a given case may be
connected with the proceeds of crime. The fact that the proceeds of
137. Another incidental issue that had been raised is about the non-
anticipatory bail filed under Section 438 of the 1973 Code. This
decision that it is one thing to say that Section 45 of the 2002 Act
Section 45(1) of the 2002 Act, the sweep of that provision must
the 2002 Act. The relief granted in terms of Section 438 of the 1973
Code, such as Sections 437, 438 and 439 of the 1973 Code.
the 1973 Code shall apply to the provisions under the Act insofar as
they are not inconsistent with the provisions of the 2002 Act.
“bail”. The word “anticipatory bail” has not been defined under the
(emphasis supplied)
that the principles governing the grant of bail in both cases are more
(emphasis supplied)
654 State rep. by the C.B.I. vs. Anil Sharma, (1997) 7 SCC 187
655 P. Chidambaram vs. Central Bureau of Investigation, 2019 SCC OnLine Del 9703
457
between bail and anticipatory bail which not only will be irrational
misconceived that the rigors of Section 45 of the 2002 Act will not
to hold that if a person applies for bail after arrest, he/she can be
granted that relief only if the twin conditions are fulfilled in addition
Section 438 of the 1973 Code. The relief of bail, be it in the nature
triggered in either case before the relief of bail in connection with the
458
under Section 438 of the 1973 Code or for that matter, by invoking
principles and rigors of Section 45 of the 2002 must come into play
laundering.
1973 Code, which has come into being on 23.6.2006 vide Act 25 of
459
of Bihar, Patna657, this Court stated that the right to speedy trial
term prescribed under the Act. The Court issued such direction
the NDPS Act, which imposed the rigors of twin conditions for release
144. The Union of India also recognized the right to speedy trial and
it is to be noted that the Section 436A of the 1973 Code was inserted
appropriate to deny the relief of Section 436A of the 1973 Code which
2002 Act. However, Section 436A of the 1973 Code, does not provide
Section 167 of the 1973 Code. For, in the fact situation of a case,
the Court may still deny the relief owing to ground, such as where
with the statutory bail provision or, so to say, the default bail, to be
the 1973 Code, as has now come into being is in recognition of the
trial cannot proceed even after the accused has undergone one-half
reason to deny him this lesser relief of considering his prayer for
view would impact the objectives of the 2002 Act and is in the nature
45 of the 2002 Act. He has also expressed concern that the same
464
accused of an offence.
It is still within the discretion of the Court, unlike the default bail
under Section 167 of the 1973 Code. Under Section 436A of the
148. However, that does not mean that the principle enunciated by
persons kept in jail for unreasonably long time, even without trial,
of the State to ensure that such trials get precedence and are
offence by law. [Be it noted, this provision (Section 436A of the 1973
the arguments and also restated in the written notes that the
mandate of Section 167 of the 1973 Code would apply with full force
for offence punishable under the 2002 Act, being a statutory bail.
For, it allows the authorised officer under the 2002 Act to summon
The person is also obliged to sign the statement so given with the
663Subs. by Act 2 of 2013, sec. 22, for “banking company or a financial institution or a company”
(w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013).
468
151. Section 50 forms part of Chapter VIII of the 2002 Act which
these amendments.
the same powers as are vested in a civil Court under the 1908 Code
664Subs. by Act 13 of 2018, sec. 208(f), for “Director” (w.e.f. 19-4-2018, vide G.S.R. 383(E),
dated 19th April, 2018).
469
fine under Section 13, is obviously very specific and not otherwise.
meaning of Sections 193 and 228 of the IPC. Even so, the fact
Evidence Act, would come into play only when the person so
thus:
“(9) …
“Considered in this light, the guarantee under Art.
20(3) would be available in the present cases these
petitioners against whom a First Information
Report has been recorded as accused therein. It
would extend to any compulsory process for
production of evidentiary documents which are
reasonably likely to support a prosecution against
them.”
(emphasis supplied)
notice served on the appellant for asking the appellant to attend the
investigate into the affairs of the company and for giving statement
(emphasis supplied)
156. Again, the question came up for consideration before the eleven
noted that the person on whom summon has been served, must fulfil
“In the two earlier cases M.P. Sharma’s case673 and Raja
Narayanlal Bansilal Case674 this Court in describing a
person accused used the expression “against whom a
formal accusation had been made”, and in Kathi Kalu
Oghad’s case675 this Court used the expression “the
person accused must have stood in the character of an
accused person”. Counsel for Mehta urged that the earlier
authorities were superseded in Kathi Kalu Oghad’s
officials can certainly proceed against him for his acts of commission
Section 25 of the Evidence Act may come into play to urge that the
of the 2002 Act on the basis of other tangible material to indicate the
161. The Delhi High Court also had occasion to examine the
noted the special feature of the 2002 Act which deals with both civil
162. It is, thus, clear that the power invested in the officials is one
Government.
163. We are conscious of the fact that the expression used in Section
Code. Under Section 2(h) of the 1973 Code, the investigation is done
Act for the collection of evidence for the purpose of proceeding under
proceeds of crime and for that purpose, also to do search and seizure
of the 2002 Act. Sensu stricto, at this stage (of issuing summon), it is
scheme makes it amply clear that the authority authorised under this
Act is not a police officer as such. This becomes amply clear from the
thus:
From this speech, it is more than clear that the intention of the
Act to investigate the matters falling within the purview of the Act
in respect of matters specified under the 2002 Act and none else.
therein.
485
164. The purposes and objects of the 2002 Act for which it has been
confiscation of such proceeds under the 2002 Act. This Act is also
whose main aim is to prevent and detect crimes and to maintain law
decision, while dealing with the role of Customs Officer under the
Thus, this Court concluded that the Customs Officer under the Land
of the Evidence Act. In that, the main object of the Customs Officer
487
(emphasis supplied)
power under Central Excise and Salt Act, 1944 is not a police officer
Act, 1878 could not be coined as a police officer and noted thus:
occasion to deal with the provisions of the NDPS Act wherein the
Court held that the designated officer under that Act must be
basis of the legislative scheme of the NDPS Act, which permitted that
conclusion in respect of the 2002 Act for more than one reason. In
this decision, the Court first noted that the Act (NDPS Act) under
the enactment of the 2002 Act. As per the provisions of the NDPS
situation does not emerge from the provisions of the 2002 Act. The
2002 Act, on the other hand, authorises only the authorities referred
Evidence Act, would come into play making the statement made
161 to 164 of the 1973 Code and Section 25 of the Evidence Act, will
Whereas, the 2002 Act clearly authorises only the authorities under
virtue of Section 50(4) of the 2002 Act. A regular police officer will
Section 3 of the 2002 Act. The next point which has been reckoned
officer under that Act (other than a Police Officer), he proceeds to file
regular Police Officer after filing of the police report under Section
invoking Section 173(8) of the 1973 Code. This, on the face of it,
was discriminatory.
169. Notably, this dichotomy does not exist in the 2002 Act for more
than one reason. For, there is no role for the regular Police Officer.
been filed by him or against person not named in the complaint and
also noted that, while dealing with the provisions of the NDPS Act,
investigated the same crime under the NDPS Act. Once again, this
lack of authority to file closure report is not there in the 2002 Act.
provisions of the Section 67 of the NDPS Act, the Court noted that
same Act otiose. Section 53A of the NDPS Act is about relevancy of
to be answered.
provisions of the 2002 Act. The Court also noted in that decision
substances.
enacting the 2002 Act. It is a sui generis legislation, not only dealing
formalities and make them accountable for failure thereof, and also
objectives of the 2002 Act, the reason weighed with this Court while
dealing with the provisions of the NDPS Act, will have no bearing
whatsoever. In that decision, this Court also noted that the offences
officer as well as the local police, and the scheme of the 2002 Act is
entirely different.
confusion had prevailed in dealing with the said crime when the
legislative intent was only to authorise the Authority under the 2002
Act to deal with such cases. That position stood corrected in 2005,
bailable, however, does not mean that the regular Police Officer is
Whereas, that description has been retained for the limited purpose
of the NDPS Act dealt with by this Court in Tofan Singh693 and that
follow that the authorities under the 2002 Act are not Police Officers.
173. We may note that the learned Additional Solicitor General was
search under this Act; also against the person legally bound to state
under the 2002 Act or refuses to sign any statement made by him in
695 Ins. by Act 2 of 2013, sec.26 (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013)
502
vested in a civil Court under the 1908 Code while trying a suit in
“THE SCHEDULE
[See section 2(y)]
696[PART A
PARAGRAPH 1
OFFENCES UNDER THE INDIAN PENAL CODE
(45 of 1860)
Section Description of offence
120B Criminal conspiracy.
121 Waging or attempting to wage war or
abetting waging of war, against the
Subs. by Act 2 of 2013, Sec. 30(i), for Part A (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-
696
2013). Earlier Part A was amended by Act 21 of 2009, sec. 13 (w.e.f. 1-6-2009).
504
Government of India.
121A Conspiracy to commit offences punishable
by section 121 against the State.
255 Counterfeiting Government stamp.
257 Making or selling instrument for
counterfeiting Government stamp.
258 Sale of counterfeit Government stamp.
259 Having possession of counterfeit
Government stamp.
260 Using as genuine a Government stamp
known to be counterfeit.
302 Murder.
304 Punishment for culpable homicide not
amounting to murder.
307 Attempt to murder.
308 Attempt to commit culpable homicide.
327 Voluntarily causing hurt to extort property,
or to constrain to an illegal act.
329 Voluntarily causing grievous hurt to extort
property, or to constrain to an illegal act.
364A Kidnapping for ransom, etc.
384 to 389 Offences relating to extortion.
392 to 402 Offences relating to robbery and dacoity.
411 Dishonestly receiving stolen property.
412 Dishonestly receiving property stolen in the
commission of a dacoity.
413 Habitually dealing in stolen property.
414 Assisting in concealment of stolen property.
417 Punishment for cheating.
418 Cheating with knowledge that wrongful loss
may ensue to person whose interest offender
is bound to protect.
419 Punishment for cheating by personation.
420 Cheating and dishonestly inducing delivery
of property.
421 Dishonest or fraudulent removal or
concealment of property to prevent
distribution among creditors.
422 Dishonestly or fraudulently preventing debt
being available for creditors.
423 Dishonest or fraudulent execution of deed of
transfer containing false statement of
505
consideration.
424 Dishonest or fraudulent removal or
concealment of property.
467 Forgery of valuable security, will, etc.
471 Using as genuine a forged document or
electronic record.
472 and 473 Making or possessing counterfeit seal, etc.,
with intent to commit forgery.
475 and 476 Counterfeiting device or mark.
481 Using a false property mark.
482 Punishment for using a false property mark.
483 Counterfeiting a property mark used by
another.
484 Counterfeiting a mark used by a public
servant.
485 Making or possession of any instrument for
counterfeiting a property mark.
486 Selling goods marked with a counterfeit
property mark.
487 Making a false mark upon any receptacle
containing goods.
488 Punishment for making use of any such false
mark.
489A Counterfeiting currency notes or bank notes.
489B Using as genuine, forged or counterfeit
currency notes or bank notes.
PARAGRAPH 2
OFFENCES UNDER THE NARCOTIC DRUGS AND
PSYCHOTROPIC SUBSTANCES ACT, 1985
(61 of 1985)
Section Description of offence
15 Contravention in relation to poppy straw.
16. Contravention in relation to coca plant and
coca leaves.
17. Contravention in relation to prepared opium.
18. Contravention in relation to opium poppy
and opium.
19. Embezzlement of opium by cultivator.
20. Contravention in relation to cannabis plant
and cannabis.
21. Contravention in relation to manufactured
drugs and preparations.
506
PARAGRAPH 3
OFFENCES UNDER THE EXPLOSIVE SUBSTANCES
ACT, 1908
(6 of 1908)
Section Description of offence
3 Causing explosion likely to endanger life or
property.
4 Attempt to cause explosion, or for making or
keeping explosives with intent to endanger
life or property.
5 Making or possessing explosives under
suspicious circumstances.
PARAGRAPH 4
OFFENCES UNDER THE UNLAWFUL ACTIVITIES
(PREVENTION) ACT, 1967
(37 of 1967)
Section Description of offence
10 read with Penalty for being member of an unlawful
section 3 association, etc.
11 read with Penalty for dealing with funds of an unlawful
section 3 association.
13 read with Punishment for unlawful activities.
section 3
16 read with Punishment for terrorist act.
section 15
16A Punishment for making demands of
507
PARAGRAPH 5
OFFENCES UNDER THE ARMS ACT, 1959
(54 of 1959)
Section Description of offence
25 To manufacture, sell, transfer, convert,
repair or test or prove or expose or offer for
sale or transfer or have in his possession for
sale, transfer, conversion, repair, test or
proof, any arms or ammunition in
contravention of section 5 of the Arms Act,
1959.
To acquire, have in possession or carry any
prohibited arms or prohibited ammunition
in contravention of section 7 of the Arms Act,
1959.
Contravention of section 24A of the Arms
Act, 1959 relating to prohibition as to
possession of notified arms in disturbed
areas, etc.
Contravention of section 24B of the Arms
Act, 1959 relating to prohibition as to
carrying of notified arms in or through
public places in disturbed areas.
508
PARAGRAPH 6
OFFENCES UNDER THE WILD LIFE (PROTECTION)
ACT, 1972
(53 of 1972)
Section Description of offence
51 read with Hunting of wild animals.
section 9
51 read with Contravention of provisions of section 17A
section 17A relating to prohibition of picking, uprooting,
etc., of specified plants.
51 read with Contravention of provisions of section 39
section 39 relating to wild animals, etc., to be
Government property.
51 read with Contravention of provisions of section 44
section 44 relating to dealings in trophy and animal
articles without licence prohibited.
51 read with Contravention of provisions of section 48
section 48 relating to purchase of animal, etc., by
509
licensee.
51 read with Contravention of provisions of section 49B
section 49B relating to prohibition of dealings in
trophies, animals articles, etc., derived from
scheduled animals.
PARAGRAPH 7
OFFENCES UNDER THE IMMORAL TRAFFIC
(PREVENTION) ACT, 1956
(104 of 1956)
Section Description of offence
5. Procuring, inducing or taking person for the
sake of prostitution.
6. Detaining a person in premises where
prostitution is carried on.
8. Seducing or soliciting for purpose of
prostitution.
9. Seduction of a person in custody.
697[PARAGRAPH
8
OFFENCES UNDER THE PREVENTION OF CORRUPTION
ACT, 1988
(49 of 1988)
Section Description of offence
7. Offence relating to public servant being
bribed.
7A. Taking undue advantage to influence public
servant by corrupt or illegal means or by
exercise of personal influence.
697 Subs. by Act 16 of 2018, sec. 19, for Paragraph 8 (w.e.f. 26-7-2018, vide S.O. 3664 (E),
dated 26th July, 2018). Paragraph 8, before substitution, stood as under:
“PARAGRAPH 8
OFFENCES UNDER THE PREVENTION OF CORRUPTION ACT, 1988
(49 OF 1988)
Section Description of offence
7 Public servant taking gratification other than legal remuneration
in respect of an official act.
8 Taking gratification in order, by corrupt or illegal means, to
influence public servant.
9 Taking gratification for exercise of personal influence with public
servant.
10 Abetment by public servant of offences defined in section 8 or
section 9 of the Prevention of Corruption Act, 1988.
13 Criminal misconduct by a public servant.”.
510
PARAGRAPH 9
OFFENCES UNDER THE EXPLOSIVES ACT, 1884
(4 of 1884)
Section Description of offence
9B Punishment for certain offences.
9C Offences by companies.
PARAGRAPH 10
OFFENCES UNDER THE ANTIQUITIES AND ARTS
TREASURES ACT, 1972
(52 of 1972)
Section Description of offence
25 read with Contravention of export trade in antiquities
section 3 and art treasures.
28 Offences by companies.
PARAGRAPH 11
OFFENCES UNDER THE SECURITIES AND EXCHANGE
BOARD OF INDIA ACT, 1992
(15 of 1992)
Section Description of offence
12A read Prohibition of manipulative and deceptive
with section devices, insider trading and substantial.
24
24 Acquisition of securities or control.
PARAGRAPH 12
OFFENCES UNDER THE CUSTOMS ACT, 1962
(52 of 1962)
Section Description of offence
511
PARAGRAPH 13
OFFENCES UNDER THE BONDED LABOUR SYSTEM
(ABOLITION) ACT, 1976
(19 of 1976)
Section Description of offence
16 Punishment for enforcement of bonded
labour.
18 Punishment for extracting bonded labour
under the bonded labour system.
20 Abetment to be an offence.
PARAGRAPH 14
OFFENCES UNDER THE CHILD LABOUR (PROHIBITION
AND REGULATION) ACT, 1986
(61 of 1986)
Section Description of offence
14 Punishment for employment of any child to
work in contravention of the provisions of
section 3.
PARAGRAPH 15
OFFENCES UNDER THE TRANSPLANTATION OF
HUMAN ORGANS ACT, 1994
(42 of 1994)
Section Description of offence
18 Punishment for removal of human organ
without authority.
19 Punishment for commercial dealings in
human organs.
20 Punishment for contravention of any other
provision of this Act.
PARAGRAPH 16
OFFENCES UNDER THE JUVENILE JUSTICE (CARE
AND PROTECTION OF CHILDREN) ACT, 2000
(56 of 2000)
Section Description of offence
23 Punishment for cruelty to juvenile or child.
24 Employment of juvenile or child for begging.
25 Penalty for giving intoxicating liquor or
narcotic drug or psychotropic substance to
juvenile or child.
512
PARAGRAPH 17
OFFENCES UNDER THE EMIGRATION ACT, 1983
(31 of 1983)
Section Description of offence
24 Offences and penalties.
PARAGRAPH 18
OFFENCES UNDER THE PASSPORTS ACT, 1967
(15 of 1967)
Section Description of offence
12 Offences and penalties.
PARAGRAPH 19
OFFENCES UNDER THE FOREIGNERS ACT, 1946
(31 of 1946)
Section Description of offence
14 Penalty for contravention of provisions of the
Act, etc.
14B Penalty for using forged passport.
14C Penalty for abetment.
PARAGRAPH 20
OFFENCES UNDER THE COPYRIGHT ACT, 1957
(14 of 1957)
Section Description of offence
63 Offence of infringement of copyright or other
rights conferred by this Act.
63A. Enhanced penalty on second and
subsequent convictions.
63B. Knowing use of infringing copy of computer
programme.
68A. Penalty for contravention of section 52A.
PARAGRAPH 21
OFFENCES UNDER THE TRADE MARKS ACT, 1999
(47 of 1999)
Section Description of offence
103 Penalty for applying false trade marks, trade
descriptions, etc.
104 Penalty for selling goods or providing
services to which false trade mark or false
trade description is applied.
513
PARAGRAPH 22
OFFENCES UNDER THE INFORMATION TECHNOLOGY
ACT, 2000
(21 of 2000)
Section Description of offence
72 Penalty for breach of confidentiality and
privacy
75 Act to apply for offence or contravention
committed outside India.
PARAGRAPH 23
OFFENCES UNDER THE BIOLOGICAL DIVERSITY ACT,
2002
(18 of 2003)
Section Description of offence
55 read with Penalties for contravention of section 6, etc.
section 6.
PARAGRAPH 24
OFFENCES UNDER THE PROTECTION OF PLANT
VARIETIES AND FARMERS’ RIGHTS ACT, 2001
(53 of 2001)
Section Description of offence
70 read with Penalty for applying false denomination, etc.
section 68
71 read with Penalty for selling varieties to which false
section 68 denomination is applied.
72 read with Penalty for falsely representing a variety as
section 68 registered.
73 read with Penalty for subsequent offence.
section 68
PARAGRAPH 25
OFFENCES UNDER THE ENVIRONMENT PROTECTION
ACT, 1986
(29 of 1986)
Section Description of offence
514
PARAGRAPH 26
OFFENCES UNDER THE WATER (PREVENTION AND
CONTROL OF POLLUTION) ACT, 1974
(6 of 1974)
Section Description of offence
41(2) Penalty for pollution of stream or well.
43 Penalty for contravention of provisions of
section 24.
PARAGRAPH 27
OFFENCES UNDER THE AIR (PREVENTION AND
CONTROL OF POLLUTION) ACT, 1981
(14 of 1981)
Section Description of offence
37 Failure to comply with the provisions for
operating industrial plant.
PARAGRAPH 28
OFFENCES UNDER THE SUPPRESSION OF UNLAWFUL
ACTS AGAINST SAFETY OF MARITIME NAVIGATION
AND FIXED PLATFORMS ON CONTINENTAL SHELF
ACT, 2002
(69 of 2002)
Section Description of offence
3 Offences against ship, fixed platform, cargo
of a ship, maritime navigational facilities,
etc.]
698[PARAGRAPH
29
OFFENCE UNDER THE COMPANIES ACT, 2013
(18 of 2013)
Section Description of offence
447 Punishment for fraud.]
698 Ins. by Act 13 of 2018, sec. 208(h) (w.e.f. 19-4-2018, vide G.S.R. 383(E), dated 19th April,
2018).
515
699[PART
B
OFFENCE UNDER THE CUSTOMS ACT, 1962
Section Description of offence
132 False declaration, false documents, etc.]
700[PART C
An offence which is the offence of cross border implications
and is specified in,—
(1) Part A; or
701[***]
699Ins. by the Finance Act, 2015 (20 of 2015), sec. 151 (w.e.f. 14-5-2015). Earlier Part B was
amended by Act 21 of 2009, sec. 13 (w.e.f. 1-6-2009) and was omitted by Act 2 of 2013, sec.
30(ii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013).
700 Ins. by Act 21 of 2009, sec. 13(iii) (w.e.f. 1-6-2009).
701 Omitted by Act 2 of 2013, sec. 30(iii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013).
702 Ins. by Act 22 of 2015, sec. 88 (w.e.f. 1-7-2015, vide S.O. 1790(E), dated 1st July, 2015).
516
176. As per the procedure prescribed by the 1973 Code, the officer
the 2002 Act including to attach the property for being dealt with as
confiscation, the authorities under the 2002 Act (i.e., Section 48) are
under Section 3 of this Act. Considering the scheme of the 2002 Act,
of the 2002 Act and also keeping in mind Section 65 of the same Act.
Chapter XII of the 1973 Code. The provisions of Chapter XII of the
520
of the complaint before the Special Court within the statutory period
prescribed in the 1973 Code for filing of police report, if not released
unlike Section 154 of the 1973 Code. The fact that such ECIR has
not been recorded, does not come in the way of the authorities
in that regard.
his arrest? Section 19(1) of the 2002 Act postulates that after arrest,
as soon as may be, the person should be informed about the grounds
free to look into the relevant records made available by the Authority
the statutory period provided in 1973 Code, after arrest, the person
would get all relevant materials forming part of the complaint filed
by the Authority under Section 44(1)(b) of the 2002 Act before the
Special Court.
person before filing of the complaint. That does not mean that in
aware about the grounds of his arrest. This is compliant with the
at times FIR does not reveal all aspects of the offence in question. In
informed about the grounds of his arrest; and when produced before
the Special Court, it is open to the Special Court to call upon the
of the accused before him and look into the same for answering the
need for his continued detention. Taking any view of the matter,
ED MANUAL
180. It had been urged that the 2002 Act creates an overbroad
4(b)(v) of the RTI Act, it was urged that it was obligatory on the part
of the Public Authority to publish the stated Manual within 120 days
thus:
It is equally true that the accused or for that matter common public
such requirement under the 2002 Act or for that matter, that there
property being proceeds of crime and to attach the same for being
dealt with under the 2002 Act. Stricto sensu, it is in the nature of
since the inquiry in due course ends in identifying the offender who
such person before the Authority or the Special Court, as the case
528
APPELLATE TRIBUNAL
182. Serious grievance has been made about the vacancies in the
is, but necessary, that the forum should be functional and accessible
Absent such forum, the aggrieved persons have to rush to the High
offender and other offenders. Section 4704A of the 2002 Act makes
activity connected with the proceeds of crime and the other not so
Section 201 and 212 of IPC. It is their case that this distinction is
absent in Section 4 of the 2002 Act which provides that the term of
rigorous imprisonment shall not be less than three years and extend
upto seven years or ten years, as the case may be, with fine. This
Act. The person may be involved in any one or more than one
of merit.
184. On the basis of same analogy, it was argued that the twin
We have not dealt with any other issue involved in individual cases
concerning 2002 Act as the parties have been given liberty to pursue
CONCLUSION
examined in this judgment. The same is left open for being examined
along with or after the decision of the Larger Bench (seven Judges)
the 2002 Act does not limit itself to the matter of investigation
the Act.
2002 Act does not travel beyond the main provision predicating
offence.
(v) (a) Section 3 of the 2002 Act has a wider reach and captures
proceeds of crime and is not limited to the happening of the final act
Act or otherwise.
(b) Independent of the above, we are clearly of the view that the
activity.
the 2002 Act is also rejected subject to Section 8 being invoked and
that regard.
18 of the 2002 Act also stands rejected. There are similar safeguards
in Section 19. The provision does not suffer from the vice of
arbitrariness.
provision is also read down to mean that the Special Court may
in this section shall be dealt with by the Court concerned and by the
this judgment.
(xiii) (a) The reasons which weighed with this Court in Nikesh
book; and it was open to the Parliament to cure the defect noted by
2002 Act and does not suffer from the vice of arbitrariness or
unreasonableness.
(d) As regards the prayer for grant of bail, irrespective of the nature
and the Authorities under the 2002 Act (referred to in Section 48),
(b) The statements recorded by the Authorities under the 2002 Act
ECIR cannot be equated with an FIR under the 1973 Code. ECIR is
scheduled offence has not been recorded does not come in the way
Special Court, it is open to the Special Court to look into the relevant
stands rejected.
ORDER
The contentions, other than dealt with in this judgment, are kept
disposed of accordingly.
with Civil Appeal No.8588 of 2019 titled ‘Rojer Mathew vs. South
Central Goods & Services Act, 2017, etc. Hence, the same are
that regard.
711 These matters relate to Central Goods and Services Tax Act, 2017
712 These matters relate to Indian Penal Code, 1860, Prevention of Corruption Act, 1988,
Information Technology Act, 2000, Foreign Contribution (Regulation) Act, 2010, etc.
545
continue for four weeks from today, with liberty to the parties to
..……………………………J.
(A.M. Khanwilkar)
………………………………J.
(Dinesh Maheshwari)
………………………………J.
(C.T. Ravikumar)
New Delhi;
July 27, 2022.