[This article is authored by Nandini Sharma, Student at Rajiv Gandhi National University of Law, Punjab]

Introduction

The challenge to the validity of summons proceedings citing the protection granted by the right against self-incrimination, as enshrined in Article 20(3), has been raised in several proceedings, particularly those of a quasi-criminal nature, under laws such as the Customs Act, 1962, among others. The issue becomes relevant amidst the increasing number of cases under the Prevention of Money Laundering Act, 2002, hereinafter referred to as PMLA. Article 20(3) protects an accused from self-incriminatory testimony.  Section 50 of the Act, which is resorted to by the authorities to summon any person to provide essential documents and produce evidence, has been excluded from the application of Article 20(3).  The present article argues that upholding the constitutional validity of practices u/s 50 without incorporating safeguards marks a shift away from the due process model of the Indian Criminal Justice System, where fundamental rights are rendered inapplicable due to the stringent interpretation of key elements.

The Mystery of Formal Accusation

In its earliest decision, namely, Balkishan A. Devidayal v. State of Maharashtra, the Supreme Court dealt with the issue of determining who will be entitled to protection under Article 20(3).  It was held that only a person against whom a formal accusation of an offence has been made can be a person ‘accused of an offence’ under Article 20(3).

A larger bench reiterated this position in Kathi Kalu Oghad v. State of Bombay, holding that only a person against whom a formal accusation has been made stands in the character of an accused. The decision in Ramanlal Bhogilal Shah v. D.K. Guha further refined the stance where the FIR was recognised as a document providing a formal accusation and conferring the title of accused against a person.

Later, in Romesh Chandra Mehta v. State of West Bengal, the Supreme Court differentiated the proceedings against an ordinary offence from proceedings initiated under a special statute like the Sea Customs Act, which are governed by a specific procedure enshrined in the statutes. The Court clarified that even a formal complaint filed by a Sea Customs officer against a person would not amount to a formal accusation, and it cannot make the person an accused.

Like all special statutes, PMLA also provides its own procedure for summons, arrest, and attachment. The challenges against the summon orders have been rejected on the grounds of an absence of a formal complaint. However, the exercise of broad powers under Section 50 can entail compelled testimony from a person, as the authorities have existing material in the form of an ECIR to suspect the person’s culpability. While the powers under Section 50 have been upheld in Vijay Madanlal Chaudhary v. Union of India, a contrasting position cannot be ignored. Nandini Sathpathy v. P.L. Dani, the most celebrated judgment,for interpretation of Article 20(3), holds that the right against self-incrimination is not limited to the present accusations, but also to information that may lead to an imminent accusation, which includes granting protection to a suspect. Notably, the validity of the statements under Section 50 remains doubtful for a person who is already a suspect and subsequently named as an accused in the prosecution complaint based on his own testimony pursuant to summons. The issue remains of an immediate concern, given the absence of any inbuilt or judicially recognised safeguards against the powers of enforcement authorities while summoning a person.

The only safeguard for statements recorded in summons proceedings of such nature, as recognised in A Tajudeen v. Union of India, is that the statements become non-admissible when the person proves that he was an accused while summons were issued, and threat, coercion, or inducement were resorted to by the authorities.

Notably, some of the crucial judicial protections are denied in the absence of a formal complaint before an adjudicatory authority. Under such circumstances, an individual’s constitutional liberties are choked at the very beginning of a criminal proceeding, a crucial stage for securing essential reliefs.

The Unsolved Riddle of ECIR

The second challenge in allowing judicial protections against the summoning process is the absence of a formal document containing an accusation. An ECIR, also known as the Enforcement Complaint Information Report, has been considered incapable of providing a formal accusation against a person. The Andhra Pradesh HC has held that merely naming a person in an ECIR will not render him an accused under Section 3 of PMLA. 

 However, an ECIR is analogous to an FIR, in certain ways, as it provides the preliminary details about the offence of money laundering. Thus, even when it is only an internal document, it is the basis for subsequent search and inquiry. Such a stance becomes arbitrary in light of the decision in Virbhadra Singh v. ED and Anoop Bartaria v. ED, where the courts have affirmed the cognizable nature of the offences under PMLA. Paradoxically, an ECIR, which is often considered as the basis of validating an arrest under Section 19, fails to specify a formal accusation against a person, for bringing the person within the ambit of the protection under Article 20(3).

Effect of Citing Officers as Authorised Officers

Primarily, the presumption against the validity of statements given before police officers emanates from the grave violations of human rights from the use of force and other forms of torture by them. However, the parliament has unsuccessfully attempted to remove this presumption in PMLA proceedings through the Amendment of 2005, after which only gazetted officers authorised by the central government under Section 48 of the Act can issue a summons order, under Section 50, file a prosecution complaint under Section 44, or arrest the person under Section 19. Furthermore, the summons proceedings initiated by the authorities are deemed judicial proceedings as specified by Section 50(3) of the Act.

The court has adopted its reasoning given in Balakrishna A Devidayal, which highlighted that since the summons are issued by authorised officers, they must be presumed to act judicially, unlike a police officer recording statements under Section 180 of the BNSS. Furthermore, the investigation carried out by the authorities is deemed as an inquiry to make the statements admissible before the court. The constitutional liberties under Articles 20 and 21 cannot be ensured by merely attaching the fiction of judicial proceedings. Notably, the authorisation of officers does not necessarily lead to the officers acting judicially, i.e., independent of their policing duties, and the possibility of forced testimony and its resultant prosecution looms large even when the officers are not considered as police. The Supreme Court’s acceptance of such an interpretation in Vijay Madanlal Chaudhary, without reinvigorating any safeguard, carves out a dangerous exception for dealing with cases under PMLA.

 If the summons before the authorised authorities constitutes a judicial proceeding for punitive purposes, it would not be incorrect to seek one of the basic safeguards in the form of the right against self-incrimination from the summons proceedings under Section 50 as present in an ordinary judicial proceeding. Specifically, the protection against compelled disclosure was first established in trial proceedings (also a type of judicial proceeding) and then expanded to investigations. Conclusively, every judicial proceeding must reflect the recognition of procedural fairness and adequate safeguards to the concerned persons.

Therefore, the denial of recognising a person facing PMLA proceedings as an accused deprives him of an essential safeguard in a judicial proceeding. Remarkably, the argument that summoning orders at the initial stages of a money-laundering proceeding are not to ascertain a person’s culpability and are only initiated to assess the factual background does not hold ground when the summons is ordered for specific persons who are mentioned as an accused in the prosecution complaint. The serious consequences of money laundering and the requirement of uninterrupted investigations cannot justify sacrificing the principles of fairness and procedure established by law.

Conclusion

The power under Section 50(2) of PMLA is characterised by numerous legal inconsistencies, the most appalling of those being the denial of the right against self-incrimination. A diversion from norms under the procedural code has been used to remove every possibility by which a person can seek the shelter of Articles 20 and 21. This marks a shift in PMLA proceedings from the due process model, the foundation of the Indian Criminal justice system, to the crime control model. The scrutiny of such practices under PMLA  by the constitutional courts is marked by a strict interpretation of fundamental terms such as ‘accused’, ‘investigation’, and ‘police officer.’ The adopted reasoning by the courts fails to differentiate between a deemed judicial proceeding and an actual judicial proceeding, and the resultant prosecution that directly emanates from the testimonies of the accused. Recently, the Supreme Court had to recognise safeguards against the powers of arrest under Section 19 of the PMLA, in the form of requiring authorities to provide material on record based on which they formulated the reason to believe that a person is guilty of an offence punishable under the Act before making an arrest. This opens the possibility that the adopted stance in Vijay Madanlal is revisited by the court to provide safeguards also against summons proceedings under PMLA.  Most importantly, the court has to interpret the limitations of a deemed judicial proceeding in relation to the protection of constitutional liberties.