PMLA prevails over CrPC on summons procedure: Supreme Court

The provisions of the Prevention of Money Laundering Act (PMLA), 2002, prevail over the Code of Criminal Procedure, 1973 (CrPC) in relation to summons of a person, the Supreme Court held in its judgment dismissing the appeal of Trinamool Congress MP Abhishek Banerjee and his wife Rujira Banerjee against the Enforcement Directorate's summons to appear in Delhi in connection with a coal scam case.

The main argument of the petitioners was that they could not be summoned to New Delhi as the area was outside the crime scene and that the ED could summon them only to Kolkata and not to New Delhi.

It was argued that Section 50 of the PMLA merely specifies the substantive summoning power of the ED but does not provide the procedure for exercising that power. Therefore, the summoning procedure should be as per CrPC, they argued, stressing that as per the proviso to Section 160 CrPC, a woman cannot be summoned outside her place of residence.

A bank consisting of Justices Bela M Trivedi and Satish Chandra Sharma, while rejecting the arguments of the petitioners, he observed that Section 71 of the PMLA gives precedence to the PMLA over other laws. As per Section 65 of the PMLA, the provisions of Cr.PC shall apply unless they are inconsistent with the provisions of the PMLA relating to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under the Act. Reference was also made to Sections 4(2) and 5.

“Thus, taking into account the combined interpretation of Section 71 and Section 65 of the PMLA and Section 4(2) and Section 5 of the Code, there is no doubt that the provisions of the PMLA shall remain in force notwithstanding any conflicting provisions in any other law for the time being in force including the provisions of the Cr.PC.” the court found.

Reference was also made to the statements in the judgment in Vijay Madanlal Choudhary vs. Union of India (2022) that the provisions of Chapter XII of the CrPC (including Section 160) are not applicable in all respects to the handling of information relating to the commission of money laundering offences.

The court also observed that there are glaring inconsistencies between S.50 PMLA and S.160 CrPC such as:

1. S.50 PMLA is gender neutral, whereas S.160 is not.

2. S.160 CrPC deals with ‘investigation’ while S.50 PMLA deals with ‘enquiry’.

3. Statements recorded under Section 50 of the PMLA do not fall under Article 20(3) of the Constitution whereas statements recorded under Section 160 of the CrPC cannot be used as evidence except for the limited purpose specified in the proviso to Section 162 of the Code.

“In view of these glaring contradictions between Section 50 PMLA and Section 160/161 Cr.PC, the provisions of Section 50 PMLA read with Section 71 read with Section 65 would prevail.” the court found.

The court also observed that the PMLA Rules, 2005, prescribe a specific procedure for issuing summons to persons.

“Since there is a special procedure in the Statutory Rules, 2005 for summoning the person under sub-sections (2) and (3) of Section 50 of the Act, the same shall prevail over all other procedures prescribed under the Code, particularly the procedure provided for under Section 160/161 as well as the procedure for production of documents provided for under Section 91 of the Code, in view of the overriding effect attributed to the PMLA over the other laws including the Cr.PC under Section 71 read with Section 65 of the PMLA.”

Since the constitutionality of Section 50 PMLA in Vijay Madanlal, The Court did not address the applicants’ arguments that the proceedings violated Articles 20 and 21.

Violation of summons would be punishable

The court observed that under sub-section (3) of Section 50, all persons summoned are required to appear in person or to be represented by authorised representatives as directed by the officer. They are required to tell the truth on all subjects on which they are examined or on which they make statements and to produce such documents as are required. Under sub-section (4), any proceedings under sub-sections (2) and (3) shall be deemed to be judicial proceedings within the meaning of Section 193 and Section 228 IPC. Under sub-section (4) of Section 63, a person who wilfully disobeys any direction given under Section 50 can be acted against under Section 174 IPC.

The Court, therefore, could not find any illegality in the notice issued by the Court of Chief Judicial Magistrate, Patiala House Courts, New Delhi against Rujira under Section 63 PMLA read with Section 174 IPC.

Case Title: ABHISHEK BANERJEE AND ANR. Versus DIRECTORATE OF ENFORCEMENT, Crl.A. Nos. 2221-2222/2023 (and connected case)

Quote: 2024 LiveLaw (SC) 674