A.S. Bopanna JUDGMENT
R. Banumathi, J.
1. Leave granted.
2. This appeal relates to the alleged irregularities in Foreign Investment Promotion Board (FIPB) clearance given to the INX Media for receiving foreign investment to the tune of Rs. 305 crores against approved inflow of Rs. 4.62 crores. The High Court of Delhi rejected the Appellant's plea for anticipatory bail in the case registered by Central Bureau of Investigation (CBI) being RC No. 220/2017-E-0011 Under Section 120B Indian Penal Code read with Section 420 Indian Penal Code, Section 420 Indian Penal Code, Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. By the impugned order dated 20.08.2019, the High Court also refused to grant anticipatory bail in the case registered by the Enforcement Directorate in ECIR No. 07/HIU/2017 punishable Under Sections 3 and 4 of the Prevention of Money-Laundering Act, 2002.
3. Grievance of the Appellant is that against the impugned order of the High Court, the Appellant tried to get the matter listed in the Supreme Court on 21.08.2019; but the Appellant could not get an urgent hearing in the Supreme Court seeking stay of the impugned order of the High Court. The Appellant was arrested by the CBI on the night of 21.08.2019. Since the Appellant was arrested and remanded to custody in CBI case, in view of the judgment of the Constitution Bench in Shri Gurbaksh Singh Sibbia and Ors. v. State of Punjab 
MANU/SC/0215/1980 : (1980) 2 SCC 565, the Appellant cannot seek anticipatory bail after he is arrested. Accordingly, SLP (Crl.) No. 7525 of 2019 preferred by the Appellant qua the CBI case was dismissed as infructuous vide order dated 26.08.2019 on the ground that the Appellant has already been arrested and remanded to custody. This Court granted liberty to the Appellant to work out his remedy in accordance with law.
4. On 15.05.2017, CBI registered FIR in RC No. 220/2017-E-0011 Under Section 120B Indian Penal Code read with Section 420 Indian Penal Code, Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 against the Accused viz. (i) INX Media through its Director Indrani Mukherjea; (ii) INX News through its Director Sh. Pratim Mukherjea @ Peter Mukherjea and Ors.; (iii) Sh. Karti P. Chidambaram; (iv) Chess Management Services through its Director Sh. Karti P. Chidambaram and Ors.; (v) Advantage Strategic Consulting through its Director Ms. Padma Vishwanathan @ Padma Bhaskararaman and Ors.; (vi) unknown officers/officials of Ministry of Finance, Govt. of India; and (vii) other unknown persons for the alleged irregularities in giving FIPB's clearance to INX Media to receive overseas funds of Rs. 305 crores against approved Foreign Direct Investment (FDI) of Rs. 4.62 crores.
5. Case of the prosecution in the predicate offence is that in 2007, INX Media Pvt. Ltd. approached Foreign Investment Promotion Board (FIPB) seeking approval for FDI upto 46.216 per cent of the issued equity capital. While sending the proposal by INX Media to be placed before the FIPB, INX Media had clearly mentioned in it the inflow of FDI to the extent of Rs. 4,62,16,000/- taking the proposed issue at its face value. The FIPB in its meeting held on 18.05.2007 recommended the proposal of INX Media subject to the approval of the Finance Minister-the Appellant. In the meeting, the Board did not approve the downstream investment by INX Media in INX News. In violation of the conditions of the approval, the recommendation of FIPB: (i) INX Media deliberately made a downstream investment to the extent of 26% in the capital of INX News Ltd. without specific approval of FIPB which included indirect foreign investment by the same Foreign Investors; (ii) generated more than Rs. 305 crores FDI in INX Media which is in clear violation of the approved foreign flow of Rs. 4.62 crores by issuing shares to the foreign investors at a premium of more than Rs. 800/- per share.
6. Upon receipt of a complaint on the basis of a cheque for an amount of Rs. 10,00,000/- made in favour of M/s. Advantage Strategic Consulting Private Limited (ASCPL) by INX Media, the investigation wing of the Income Tax Department proceeded to investigate the matter and the relevant information was sought from the FIPB, which in turn, vide its letter dated 26.05.2008 sought clarification from the INX Media which justified its action saying that the downstream investment has been authorised and that the same was made in accordance with the approval of FIPB. It is alleged by the prosecution that in order to get out of the situation without any penal provision, INX Media entered into a criminal conspiracy with Sh. Karti Chidambaram, Promoter Director, Chess Management Services Pvt. Ltd. and the Appellant-the then Finance Minister of India. INX Media through the letter dated 26.06.2008 tried to justify their action stating that the downstream investment has been approved and the same was made in accordance with approval.
7. The FIR further alleges that for the services rendered by Sh. Karti Chidambaram to INX Media through Chess Management Services in getting the issues scuttled by influencing the public servants of FIPB unit of the Ministry of Finance, consideration in the form of payments were received against invoices raised on INX Media by ASCPL. It is alleged in the FIR that the very reason for getting the invoices raised in the name of ASCPL for the services rendered by Chess Management Services was with a view to conceal the identity of Sh. Karti Chidambaram inasmuch as on the day when the invoices were raised and payment was received. It is stated that Sh. Karti Chidambaram was the Promoter, Director of Chess Management Services whereas ASCPL was being controlled by him indirectly. It is alleged that the invoices approximately for an amount of Rs. 3.50 crores were falsely got raised in favour of INX Media in the name of other companies in which Sh. Karti Chidambaram was having sustainable interest either directly or indirectly. It is alleged that such invoices were falsely got raised for creation of acquisition of media content, consultancy in respect of market research, acquisition of content of various genre of Audio-Video etc. It is alleged that INX Media Group in his record has clearly mentioned the purpose of payment of Rs. 10,00,000/- to ASCPL as towards "management consultancy charges towards FIPB notification and clarification". Alleging that the above acts of omission and commission prima facie disclose commission of offence, CBI has registered FIR in RC No. 220/2017-E-0011 on 15.05.2017 Under Section 120B read with Section 420 Indian Penal Code, Section 420 Indian Penal Code, Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 against the aforesaid Accused.
8. On the basis of the said FIR registered by CBI, the Enforcement Directorate registered a case in ECIR No. 07/HIU/2017 against the aforesaid Accused persons for allegedly committing the offence punishable Under Sections 3 and 4 of the Prevention of Money-Laundering Act, 2002 (PMLA). Ever since the registration of the cases in 2017, there were various proceedings seeking bail and number of other proceedings pending filed by Sh. Karti Chidambaram and other Accused. Finally, the Delhi High Court granted bail to Sh. Karti Chidambaram in INX Media case filed by CBI on 23.03.2018. Thereafter, the Appellant moved Delhi High Court seeking anticipatory bail both in CBI case and also in money-laundering case filed by Enforcement Directorate. On 25.07.2018, the Delhi High Court granted the Appellant interim protection from arrest in both the cases and the same was extended till 20.08.2019 - the date on which the High Court dismissed the Appellant's petition refusing to grant anticipatory bail.
9. The High Court dismissed the application refusing to grant anticipatory bail to the Appellant by holding that "it is a classic case of money-laundering". The High Court observed that "it is a clear case of money-laundering". The learned Single Judge dismissed the application for anticipatory bail by holding "that the alleged irregularities committed by the Appellant makes out a prima facie case for refusing pre-arrest bail to the Appellant". The learned Single Judge also held that "considering the gravity of the offence and the evasive reply given by the Appellant to the questions put to him while he was under the protective cover extended to him by the court are the twin factors which weigh to deny the pre-arrest bail to the Appellant". Being aggrieved, the Appellant has preferred this appeal.
10. Lengthy arguments were heard on number of hearings stretched over for long time. Learned Senior Counsel appearing for the Appellant Mr. Kapil Sibal and Mr. Abhishek Manu Singhvi made meticulous submissions on the concept of life and liberty enshrined in Article 21 of the Constitution of India to urge that the Appellant is entitled to the privilege of anticipatory bail. Arguments were also advanced on various aspects - whether the court can look into the materials produced by the Respondent-Enforcement Directorate to seek custody of the Appellant when the Appellant was not confronted with those documents on the three dates of interrogation of the Appellant conducted on 19.12.2018, 01.01.2019 and 21.01.2019. Interlocutory application was filed by the Appellant to produce the transcripts of the questions put to the Appellant and the answers given by the Appellant, recorded by Enforcement Directorate. Countering the above submissions, Mr. Tushar Mehta, learned Solicitor General made the submissions that grant of anticipatory bail is not part of Article 21 of the Constitution of India. Mr. Tushar Mehta urged that having regard to the materials collected by the Respondent-Enforcement Directorate and the specific inputs and in view of the provisions of the special enactment-PMLA, custodial interrogation of the Appellant is required and the Appellant is not entitled to the privilege of anticipatory bail.
Contention of Mr. Kapil Sibal, learned Senior Counsel:
11. Mr. Kapil Sibal, learned Senior Counsel appearing on behalf of the Appellant submitted that the clearance for INX FDI was approved by Foreign Investment Promotion Board (FIPB) consisting of six Secretaries and the Appellant as the then Finance Minister granted approval in the normal course of official business. The learned Senior Counsel submitted that the crux of the allegation is that the Appellant's son Sh. Karti Chidambaram tried to influence the officials of FIPB for granting ex-post facto approval for downstream investment by INX Media to INX News; whereas neither the Board members of FIPB nor the officials of FIPB have stated anything about the Appellant's son Sh. Karti Chidambaram that he approached and influenced them for ex-post facto approval. The learned Senior Counsel contended that the entire case alleges about money paid to ASCPL and Sh. Karti Chidambaram is neither the share-holder nor a Director in the said ASCPL; but the Enforcement Directorate has falsely alleged that Sh. Karti Chidambaram has been controlling the company-ASCPL. It was submitted that the Appellant has nothing to do with the said ASCPL to whom money has been paid by INX Media.
12. Taking us through the impugned judgment and the note said to have been submitted by the Enforcement Directorate before the High Court, the learned Senior Counsel submitted that the learned Single Judge has "copied and pasted" paragraphs after paragraphs of the note given by the Respondent in the court. It was urged that there was no basis for the allegations contained in the said note to substantiate the alleged transactions/transfer of money as stated in the tabular column given in the impugned order.
13. So far as the sealed cover containing the materials sought to be handed over by the Enforcement Directorate, the learned Senior Counsel raised strong objections and submitted that the Enforcement Directorate cannot randomly produce the documents in the court "behind the back" of the Appellant for seeking custody of the Appellant. Strong objections were raised for the plea of Enforcement Directorate requesting the court to receive the sealed cover and for looking into the documents/material collected during the investigation allegedly showing the trail of money in the name of companies and the money-laundering.
14. The Appellant was interrogated by the Respondent on three dates viz. 19.12.2018, 01.01.2019 and 21.01.2019. So far as the observation of the High Court that the Appellant was "evasive" during interrogation, the learned Senior Counsel submitted that the Appellant has well cooperated with the Respondent and the Respondent cannot allege that the Appellant was "non-cooperative". On behalf of the Appellant, an application has also been filed seeking direction to the Respondent to produce the transcripts of the questioning conducted on 19.12.2018, 01.01.2019 and 21.01.2019. The learned Senior Counsel submitted that the transcripts will show whether the Appellant was "evasive" or not during his questioning as alleged by the Respondent.
15. Learned Senior Counsel submitted that the provision for anticipatory bail i.e. Section 438 Code of Criminal Procedure has to be interpreted in a fair and reasonable manner and while so, the High Court has mechanically rejected the anticipatory bail. It was further submitted that in case of offences of the nature alleged, everything is borne out by the records and there is no question of the Appellant being "evasive". The learned Senior Counsel also submitted that co-Accused Sh. Karti Chidambaram and Padma Bhaskararaman were granted bail and the other Accused Indrani Mukherjea and Sh. Pratim Mukherjea @ Peter Mukherjea are on statutory bail and the Appellant is entitled to bail on parity also.
Contention of Mr. Abhishek Manu Singhvi, learned Senior counsel:
16. Reiterating the submission of Mr. Kapil Sibal, Mr. Abhishek Manu Singhvi, learned Senior Counsel submitted that the Enforcement Directorate cannot say that the Appellant was "non-cooperative" and "evasive". Mr. Singhvi also urged for production of transcripts i.e. questions put to the Appellant and the answers which would show whether the Appellant has properly responded to the questions or not. Placing reliance upon Additional District Magistrate, Jabalpur v. Shivakant Shukla MANU/SC/0062/1976 : (1976) 2 SCC 521, the learned Senior Counsel submitted that the Respondent cannot rely upon the documents without furnishing those documents to the Appellant or without questioning the Appellant about the materials collected during the investigation. Reiterating the submission of Mr. Sibal, Mr. Singhvi contended that the High Court has denied anticipatory bail to the Appellant on the basis of materials produced by the Respondent in the cover before the court which were never shown to the Appellant nor was the Appellant confronted with the same. The learned Senior Counsel submitted that the alleged occurrence was of the year 2007-08 and Sections 420 Indian Penal Code and 120B Indian Penal Code and Section 13 of the Prevention of Corruption Act were not part of the "scheduled offence" of Prevention of Money-Laundering Act in 2008 and were introduced by a notification dated 01.06.2009 and in view of the protection given Under Article 20(1) of the Constitution of India, there can never be a retrospective operation of a criminal/penal statute. Placing reliance upon Rao Shiv Bahadur Singh and Anr. v. State of Vindhya Pradesh MANU/SC/0081/1953 : AIR 1953 SC 394, it was contended that the Appellant has to substantiate the contention that the acts charged as offences were offences "at the time of commission of the offence". The learned Senior Counsel urged that in 2007-2008 when the alleged acts of commission and omission were committed, they were not "scheduled offences" and hence prosecution under Prevention of Money-Laundering Act, 2002 is not maintainable.
17. The learned Senior Counsel has taken strong exception to the two factors stated by the High Court in the impugned order for denying pre-arrest bail i.e. (i) gravity of the offence; and (ii) the Appellant was "evasive" to deny the anticipatory bail. The learned Senior Counsel submitted that the "gravity of the offence" cannot be the perception of the individual or the court and the test for "gravity of the offence" should be the punishment prescribed by the statute for the offence committed. Insofar as the finding of the High Court that "the Appellant was evasive to the questions", the learned Senior Counsel submitted that the investigating agency-Enforcement Directorate cannot expect an Accused to give answers in the manner they want and that the Accused is entitled to protection Under Article 20(3) of the Constitution of India. Reliance was placed upon Santosh s/o Dwarkadas Fafat v. State of Maharashtra MANU/SC/1313/2017 : (2017) 9 SCC 714.
Contention of Mr. Tushar Mehta, learned Solicitor General:
18. Taking us through the Statement of Objects and Reasons and salient features of the PMLA, the learned Solicitor General submitted that India is a part of the global community having responsibility to crackdown on money-laundering with an effective legislation and PMLA is a result of the joint initiatives taken by several nations. Taking us through the various provisions of the PMLA, the learned Solicitor General submitted that money-laundering poses a serious threat to the financial system and financial integrity of the nation and has to be sternly dealt with. It was submitted that PMLA offence has two dimensions - predicate offence and money-laundering. Money-laundering is a separate and independent offence punishable Under Section 4 read with Section 3 of the PMLA.
19. Learned Solicitor General submitted that Under Section 19 of PMLA, specified officers, on the basis of material in possession, having reason to believe which is to be recorded in writing that the person has been guilty of the offence under the Act, have power to arrest. It was urged that the power to arrest and necessary safeguards are enshrined Under Section 19 of the Act. It was submitted that since Respondent has collected cogent materials to show that it is a case of money-laundering and the Enforcement Directorate has issued Letter rogatory and if the Court intervenes by granting anticipatory bail, the authority cannot exercise the statutory right of arrest and interrogate the Appellant.
20. The learned Solicitor General submitted that they have obtained specific inputs from overseas banks and also about the companies and properties and it is a clear case of money-laundering. The learned Solicitor General submitted that the Court has power to look into the materials so collected by the Enforcement Directorate and the same cannot be shared with the Appellant at this initial stage when the Court is considering the matter for grant of pre-arrest bail. Relying upon number of judgments, the learned Solicitor General has submitted that as a matter of practice, Courts have always perused the case diaries produced by the prosecution and receive and peruse the materials/documents to satisfy its judicial conscience. In support of his contention, learned Solicitor General placed reliance upon Romila Thapar and Ors. v. Union of India and Others MANU/SC/1098/2018 : (2018) 10 SCC 753, Jai Prakash Singh v. State of Bihar and Another MANU/SC/0224/2012 : (2012) 4 SCC 379 and Directorate of Enforcement and Another v. P.V. Prabhakar Rao MANU/SC/0958/1997 : (1997) 6 SCC 647 and other judgments and requested the Court to peruse the materials produced by the Enforcement Directorate in the sealed cover.
21. Opposing the grant of anticipatory bail, the learned Solicitor General submitted that the Enforcement Directorate has cogent evidence to prove that it is a case of money-laundering and there is a need of custodial interrogation of the Appellant. The learned Solicitor General submitted that the economic offences stand as a class apart and custodial interrogation is required for the Enforcement Directorate to trace the trail of money and prayed for dismissal of the appeal.
22. As noted earlier, the predicate offences are Under Sections 120B Indian Penal Code and 420 Indian Penal Code, Section 420 Indian Penal Code, Section 8 and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act. Case is registered against the Appellant and others Under Sections 3 and 4 of PMLA. The main point falling for consideration is whether the Appellant is entitled to the privilege of anticipatory bail. In order to consider whether the Appellant is to be granted the privilege of anticipatory bail, it is necessary to consider the salient features of the special enactment - Prevention of Money-Laundering Act, 2002.
23. Prevention of Money-laundering Act, 2002 - Special Enactment:Money-laundering is the process of concealing illicit sources of money and the launderer transforming the money proceeds derived from criminal activity into funds and moved to other institution or transformed into legitimate asset. It is realised world around that money laundering poses a serious threat not only to the financial systems of the countries but also to their integrity and sovereignty. The Prevention of Money-laundering Act, 2002 was enacted in pursuance of the Political Declaration adopted by the Special Session of the United Nations General Assembly held in June 1998, calling upon the Member States to adopt national money-laundering legislation and programme, primarily with a view to meet out the serious threat posed by money laundering to the financial system of the countries and to their integrity and sovereignty.
24. Statement of Objects and Reasons to the Prevention of Money-laundering Act, 2002 recognises that money laundering poses a serious threat not only to the financial systems of the countries but also to their integrity and sovereignty. PMLA is a special enactment containing the provisions with adequate safeguards with a view to prevent money-laundering. The Preamble to the Prevention of Money-Laundering Act, 2002 states that "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."
25. Chapter II of PMLA contains provisions relating to the offences of money-laundering. Section 2(1)(p) of PMLA defines "money-laundering" that it has the same meaning assigned to it in Section 3. Section 2(1)(ra) of PMLA defines "offence of cross border implications". To prevent offences of "cross border implications", PMLA contains Sections 55 to 61 dealing with reciprocal arrangement for assistance in certain matters and procedure for attachment and confiscation of property between the contracting States with regard to the offences of money-laundering and predicate offences. Section 2(1)(y) of PMLA defines "scheduled offence" which reads as under:
2. Definitions -
(1)......
(y) "scheduled offence" means -
(i) the offences specified under Part A of the Scheduled; or
(ii) the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or
(iii) the offences specified under Part C of the Schedule.
"Scheduled Offence" is a sine qua non for the offence of money-laundering which would generate the money that is being laundered. PMLA contains Schedules which originally contained three parts namely Part A, Part B and Part C. Part A contains various paragraphs which enumerate offences under the Indian Penal Code, Narcotic Drugs and Psychotropic Substances Act, 1985, offences under the Explosives Substances Act, 1908 and the offences under the Prevention of Corruption Act, 1988 (paragraph 8) etc. The Schedule was amended by Act 21 of 2009 (w.e.f. 01.06.2009). Section 13 of Prevention of Corruption Act was inserted in the Part A of the Schedule to PMLA by the Amendment Act, 16 of 2018 (w.e.f. 26.07.2018).
26. Section 3 of PMLA stipulates "money-laundering" to be an offence. Section 3 of PMLA states that whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of the crime and projecting it as untainted property shall be guilty of the offences of money laundering. The provisions of the PMLA including Section 3 have undergone various amendments. The words in Section 3 "with the proceeds of crime and projecting" has been amended as "proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming" by the Amendment Act 2 of 2013 (w.e.f. 15.02.2013).
27. Section 4 of PMLA deals with punishment for money laundering. Prior to Amendment Act 2 of 2013, Section 4 provided punishment with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and the fine which may extend to Rs. 5,00,000/-. By Amendment Act 2 of 2013, Section 4 is amended w.e.f. 15.02.2013 vide S.O. 343(E) dated 08.02.2013. Now, the punishment prescribed Under Section 4 of PMLA to the offender is rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and the offender is also liable to pay fine. The limit of fine has been done away with and now after the amendment, appropriate fine even above Rs. 5,00,000/- can be imposed against the offender.
28. Section 5 of PMLA which provides for attachment of property involved in money laundering, states that 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 in writing), on the basis of material in his possession, that (a) any person is in possession of any proceeds of crime; and (b) 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 Chapter III, 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 such manner as may be prescribed. Section 5 provides that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate Under Section 173 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 that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be.
29. The term "reason to believe" is not defined in PMLA. The expression "reason to believe" has been defined in Section 26 of Indian Penal Code. As per the definition in Section 26 Indian Penal Code, a person is said to have "reason to believe" a thing, if he has sufficient cause to believe that thing but not otherwise. The specified officer must have "reason to believe" on the basis of material in his possession that the property sought to be attached is likely to be concealed, transferred or dealt with in a manner which may result in frustrating any proceedings for confiscation of their property under the Act. It is stated that in the present case, exercising power Under Section 5 of the PMLA, the Adjudicating Authority had attached some of the properties of the Appellant. Challenging the attachment, the Appellant and others are said to have preferred appeal before the Appellate Tribunal and stay has been granted by the Appellate Authority and the said appeal is stated to be pending.
30. As rightly submitted by the learned Solicitor General, sufficient safeguards are provided under the provisions of PMLA. Under Section 5 of PMLA, the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of Section 5 who passed the impugned order is required to have "reason to believe" that the properties sought to be attached would be transferred or dealt with in a manner which would frustrate the proceedings relating to confiscation of such properties. Further, the officer who passed the order of attachment is required to record the reasons for such belief. The provisions of the PMLA and the Rules also provide for manner of forwarding a copy of the order of provisional attachment of property along with material under Sub-section (2) of Section 5 of PMLA to the Adjudicating Authority.
31. In order to ensure the safeguards, in exercise of power Under Section 73 of PMLA, the Central Government has framed "The Prevention of Money-Laundering (The Manner of Forwarding a Copy of the Order of Provisional Attachment of Property along with the Material, and Copy of the Reasons along with the Material in respect of Survey, to the Adjudicating Authority and its period of Retention) Rules, 2005". Rule 3 of the said Rules provides for manner of forwarding a copy of the order of provisional attachment of property along with the material under Sub-section (2) of Section 5 of the Act to the Adjudicating Authority. Rule 3 stipulates various safeguards as to the confidentiality of the sealed envelope sent to the Adjudicating Authority.
32. Section 17 of PMLA deals with the search and seizure. Section 17 which deals with search and seizure states that where the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this Section on the basis of the information in his possession has "reason to believe" (reason for such belief to be recorded in writing) that any person has committed an offence which constitutes the money laundering or is in possession of any proceeds of crime involved in money laundering etc. may search building, place and seize any record or property found as a result of such search. Section 17 of PMLA also uses the expression "reason to believe" and "reason for such belief to be recorded in writing". Here again, the authorised officer shall immediately on search and seizure or upon issuance of freezing order forward a copy of the reasons so recorded along with the material in his possession to the Adjudicating Authority in a "sealed envelope" in the manner as may be prescribed and such Adjudicating Authority shall keep such reasons and material for such period as may be prescribed. In order to ensure the sanctity of the search and seizure and to ensure the safeguards, in exercise of power Under Section 73 of PMLA, the Central Government has framed "The Prevention of Money-Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the period of Retention) Rules, 2005".
33. Section 19 of PMLA deals with the power of the specified officer to arrest. Under Sub-section (1) of Section 19 of PMLA, the specified officer viz. the Director, the Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, on the basis of the material in possession, having "reason to believe" and "reasons for such belief be recorded in writing" that the person has been guilty of offence punishable under the PMLA, has power to arrest such person. The authorised officer is required to inform the Accused the grounds for such arrest at the earliest and in terms of Sub-section (3) of Section 19 of the Act, the arrested person is required to be produced to the jurisdictional Judicial Magistrate or Metropolitan Magistrate within 24 hours excluding the journey time from the place of arrest to the Magistrate's Court. In order to ensure the safeguards, in exercise of power Under Section 73 of the Act, the Central Government has framed "The Prevention of Money-Laundering (The Forms and the Manner of Forwarding a Copy of Order of Arrest of a Person along with the Material to the Adjudicating Authority and its Period of Retention) Rules, 2005". Rule 3 of the said Rules requires the arresting officer to forward a copy of order of arrest and the material to the Adjudicating Authority in a sealed cover marked "confidential" and Rule 3 provides for the manner in maintaining the confidentiality of the contents.
34. As rightly submitted by Mr. Tushar Mehta, the procedure under PMLA for arrest ensures sufficient safeguards viz.: (i) only the specified officers are authorised to arrest; (ii) based on "reasons to believe" that an offence punishable under the Act has been committed; (iii) the reasons for such belief to be recorded in writing; (iv) evidence and the material submitted to the Adjudicating Authority in sealed envelope in the manner as may be prescribed ensuring the safeguards in maintaining the confidentiality; and (v) every person arrested under PMLA to be produced before the Judicial Magistrate or Metropolitan Magistrate within 24 hours. Section 19 of PMLA provides for the power to arrest to the specified officer on the basis of material in his possession and has "reason to believe" and the "reasons for such belief to be recorded in writing" that any person has been guilty of an offence punishable under PMLA. The statutory power has been vested upon the specified officers of higher rank to arrest the person whom the officer has "reason to believe" that such person has been guilty of an offence punishable under PMLA. In cases of PMLA, in exercising the power to grant anticipatory bail would be to scuttle the statutory power of the specified officers to arrest which is enshrined in the statute with sufficient safeguards.
35. Section 71 of PMLA gives overriding effect to the provisions of PMLA. Section 71 of PMLA states that the provisions of the Act would have overriding effect on the provisions of all other Acts applicable. The provisions of PMLA shall prevail over the contrary provisions of the other Acts. Section 65 of PMLA states that the provisions of Code of Criminal Procedure, 1973 shall apply to the provisions under the Act insofar as they are not inconsistent with the provisions of PMLA.
36. Insofar as the issue of grant of bail is concerned, Section 45 of PMLA starts with non-obstante clause. Section 45 imposes two conditions for grant of bail to any person Accused of any offence punishable for a term of imprisonment of more than three years under Part-A of the Schedule of the Act viz., (i) that the prosecutor must be given an opportunity to oppose the application for such bail; (ii) that the court must be satisfied that there are reasonable grounds for believing that the Accused persons is not guilty of such offence and that he is not likely to commit any offence while on bail.
37. The twin conditions Under Section 45(1) for the offences classified thereunder in Part-A of the Schedule was held arbitrary and discriminatory and invalid in Nikesh Tarachand Shah v. Union of India and Anr. MANU/SC/1480/2017 : (2018) 11 SCC 1. Insofar as the twin conditions for release of Accused on bail Under Section 45 of the Act, the Supreme Court held the same to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India. Subsequently, Section 45 has been amended by Amendment Act 13 of 2008. The words "imprisonment for a term of imprisonment of more than three years under Part A of the Schedule" has been substituted with "Accused of an offence under this Act.....". Section 45 prior to Nikesh Tarachand and post Nikesh Tarachand reads as under:
| Section 45 - Prior to NikeshTarachand Shah Section 45. Offence to be cognizable and non-bailable. (1) Notwithstanding contained in the Code of Criminal Procedure, 1973 (2 of 1974), 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- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail;
Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs: | Section 45 - Post NikeshTarachand Shah Section 45. Offences to be cognizable and non-bailable. (2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person Accused of an offence under this Act shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail;
Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, or is Accused either on his own or along with other co-Accused of money laundering a sum of less than one crore rupees may be released on bail, if the Special court so directs: |
38. The occurrence was of the year 2007-2008. CBI registered the case against Sh. Karti Chidambaram, the Appellant and others on 15.05.2017 Under Sections 120-B Indian Penal Code read with Section 420 Indian Penal Code and Under Section 420 Indian Penal Code, Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act. Learned Senior Counsel for the Appellant, Mr. A.M. Singhvi has submitted that there could not have been 'reasons to believe' that the Appellant has committed the offence Under Section 3 of PMLA, since in 2007-2008 the time of commission of alleged offence, Sections 120-B Indian Penal Code and 420 Indian Penal Code and Section 13 of the Prevention of Corruption Act were not there in Part 'A' of the Schedule to PMLA and were included in Part 'A' of the Schedule only by Amendment Act 21 of 2009 w.e.f. 01.06.2009 and w.e.f. 26.07.2018 respectively and therefore, no prima-facie case of commission of offence by the Appellant under PMLA is made out. It was urged that Under Article 20 of the Constitution, no person shall be convicted of any offence except for violation of law in force at the time of the commission of that act charged as offence. When Section 120B Indian Penal Code and Section 420 Indian Penal Code and Section 13 of Prevention of Corruption Act were not then included in Part A of the Schedule, in 2007-2008, then the Appellant and others cannot be said to have committed the offence under PMLA. Insofar as Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act is concerned, it was submitted that Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act is not attracted against the Appellant as there are no allegations in the FIR that the Appellant accepted or agreed to accept any gratification as a motive or reward for inducing any public servant and hence, the accusation Under Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act does not apply to the Appellant. It was further submitted that even assuming Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act is made out, the amount allegedly paid to ASCPL was only Rs. 10,00,000/- whereas, Rs. 30,00,000/- was the amount then stipulated to attract Section 420 Indian Penal Code, Section 8 to be the Scheduled offence under Part A of the Schedule to the Act and therefore, there was no basis for offence against the Appellant and in such view of the matter, the Appellant is entitled for anticipatory bail.
39. Section 45 of the PMLA makes the offence of money laundering cognizable and non-bailable and 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 unless the twin conditions thereon are satisfied. Section 120-B Indian Penal Code - Criminal Conspiracy and Section 420 Indian Penal Code-Cheating and dishonestly inducing delivery of property were included in Part A of the Schedule to PMLA by way of Amendment Act 21 of 2009 w.e.f. 01.06.2009 and by way of Amendment Act 2 of 2013 w.e.f. 15.02.2013. Likewise, Section 13 of the Prevention of Corruption Act has been introduced to Part A of the Schedule (Paragraph 8) by way of Amendment Act 16 of 2018 w.e.f. 26.07.2018. As pointed out earlier, the FIR was registered by CBI Under Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act also which was then in Part A of the Schedule at the time of alleged commission of offence.
40. Learned Senior Counsel submitted that since the offence Under Sections 120-B Indian Penal Code and 420 Indian Penal Code and Under Section 13 of Prevention of Corruption Act were included in the Schedule only w.e.f. 01.06.2009 and w.e.f. 26.07.2018 respectively and there can never be a retrospective operation of a criminal/penal statue and the test is not whether the proceeds are retained by the person; but the test as laid down by the Constitution Bench of this Court is, the test of the acts constituting the offence at the time of the commission of the offence and the Appellant cannot be proceeded with prosecution under PMLA in violation of constitutional protection Under Article 20(1) of the Constitution of India.
41. Under Article 20(1) of the Constitution, no person shall be convicted of any offence except for violation of law in force at the time of commission of that act charged as an offence. FIR for the predicate offence has been registered by CBI Under Section 120B Indian Penal Code, 420 Indian Penal Code and Section 13 of the Prevention of Corruption Act and also Under Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act. As discussed earlier, Section 120B Indian Penal Code and Section 420 Indian Penal Code were included in Part A of the Schedule only by Amendment Act 21 of 2009 w.e.f. 01.06.2009. Section 13 of the Prevention of Corruption Act was included in Part A of the Schedule by Amendment Act 16 of 2018 w.e.f. 26.07.2018. Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act is punishable with imprisonment extending upto seven years. Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act was very much available in Part A of the Schedule of PMLA at the time of alleged commission of offence in 2007-2008. It cannot therefore be said that the Appellant is proceeded against in violation of Article 20(1) of the Constitution of India for the alleged commission of the acts which was not an offence as per law then in existence. The merits of the contention that Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act cannot be the predicate offence qua the Appellant, cannot be gone into at this stage when this Court is only considering the prayer for anticipatory bail.
42. Yet another contention advanced on behalf of the Appellant is that minimum threshold for the Enforcement Directorate to acquire jurisdiction at the relevant time was Rs. 30 lakhs whereas, in the present case, there is no material to show any payment apart from the sum of Rs. 10 lakhs (approximately) allegedly paid by INX Media to ASCPL with which the Appellant is said to be having no connection whatsoever. The merits of the contention that Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act (then included in Schedule A of the PMLA in 2007-08) whether attracted or not and whether the Enforcement Directorate had the threshold to acquire jurisdiction under PMLA cannot be considered at this stage while this Court is considering only the prayer for anticipatory bail.
43. In terms of Section 4 of the PMLA, the offence of money-laundering is punishable with rigorous imprisonment for a term not less than three years extending to seven years and with fine. The Second Schedule to the Code of Criminal Procedure relates to classification of offences against other laws and in terms of the Second Schedule of the Code, an offence which is punishable with imprisonment for three years and upward but not more than seven years is a cognizable and non-bailable offence. Thus, Section 4 of the Act read with the Second Schedule of the Code makes it clear that the offences under the PMLA are cognizable offences. As pointed out earlier, Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act was then found a mention in Part 'A' of the Schedule (Paragraph 8). Section 420 Indian Penal Code, Section 8 of the Prevention of Corruption Act is punishable for a term extending to seven years. Thus, the essential requirement of Section 45 of PMLA "Accused of an offence punishable for a term of imprisonment of more than three years under Part 'A' of the Schedule" is satisfied making the offence under PMLA. There is no merit in the contention of the Appellant that very registration of the FIR against the Appellant under PMLA is not maintainable.
Whether Court can look into the documents/materials collected during investigation
44. During the course of lengthy hearing, much arguments were advanced mainly on the question whether the court can look into the documents and materials produced by the prosecution before the court without first confronting the Accused with those materials.
45. The learned Solicitor General submitted that during investigation, the Enforcement Directorate has collected materials and overseas banks have given specific inputs regarding the companies and properties that money has been parked in the name of shell companies and the said money has been used to make legitimate assets and that custodial interrogation is necessary with regard to the materials so collected. The learned Solicitor General sought to produce the materials so collected in the sealed cover and requested the court to peruse the documents and the materials to satisfy the conscience of the court as to the necessity for the custodial interrogation.
46. Contention of learned Solicitor General requesting the court to peruse the documents produced in the sealed cover was strongly objected by the Appellant on the grounds:- (i) that the Enforcement Directorate cannot randomly place the documents in the court behind the back of the Accused to seek custody of the Accused; (ii) the materials so collected by Enforcement Directorate during investigation cannot be placed before the court unless the Accused has been confronted with such materials.
47. Mr. Kapil Sibal, learned Senior Counsel submitted that the statements recorded Under Section 161 Code of Criminal Procedure are part of the case diary and the case diary must reflect day to day movement of the investigation based on which the investigating agency came to the conclusion that the crime has been committed so that a final report can be filed before the court. The learned Senior Counsel submitted that during the course of such investigation, the investigating officer may discover several documents which may have a bearing on the crime committed; however the documents themselves can never be the part of the case diary and the documents would be a piece of documentary evidence during trial which would be required to be proved in accordance with the provisions of the Evidence Act before such documents can be relied upon for the purpose of supporting the case of prosecution. Enforcement Directorate does not maintain a case diary; but maintain the file with paginated pages. It was urged that even assuming that there is a case diary maintained by the Respondent in conformity with Section 172 Code of Criminal Procedure, the opinion of the investigating officer for the conclusion reached by the authorised officer under PMLA, can never be relied upon for the purposes of consideration of anticipatory bail.
48. Having regard to the submissions, two points arise for consideration - (i) whether the court can/cannot look into the documents/materials produced before the court unless the Accused was earlier confronted with those documents/materials?; and (ii) whether the court is called upon to hold a mini inquiry during the intermediary stages of investigation by examining whether the questions put to the Accused are 'satisfactory' or 'evasive', etc.?
49. Sub-section (2) of Section 172 Code of Criminal Procedure permits any court to send for case diary to use them in the trial. Section 172(3) Code of Criminal Procedure specifically provides that neither the Accused nor his agents shall be entitled to call for case diary nor shall he or they be entitled to see them merely because they are referred to by the court. But if they are used by the police officer who made them to refresh his memory or if the court uses them for the purpose of contradicting the such police officer, the provisions of Section 161 Code of Criminal Procedure or the provision of Section 145 of the Evidence Act shall be complied with. In this regard, the learned Solicitor General placed reliance upon Balakram v. State of Uttarakhand and Ors. MANU/SC/0483/2017 : (2017) 7 SCC 668. Observing that the confidentiality is always kept in the matter of investigation and it is not desirable to make available the police diary to the Accused on his demand, in Balakram, the Supreme Court held as under:
15. The police diary is only a record of day-to-day investigation made by the investigating officer. Neither the Accused nor his agent is entitled to call for such case diary and also are not entitled to see them during the course of inquiry or trial. The unfettered power conferred by the statute Under Section 172(2) Code of Criminal Procedure on the court to examine the entries of the police diary would not allow the Accused to claim similar unfettered right to inspect the case diary.
..........
17. From the aforementioned, it is clear that the denial of right to the Accused to inspect the case diary cannot be characterised as unreasonable or arbitrary. The confidentiality is always kept in the matter of investigation and it is not desirable to make available the police diary to the Accused on his demand.
50. Reiterating the same principles in Sidharth and Ors. v. State of Bihar MANU/SC/0949/2005 : (2005) 12 SCC 545, the Supreme Court held as under:
27. Lastly, we may point out that in the present case, we have noticed that the entire case diary maintained by the police was made available to the Accused. Under Section 172 of the Criminal Procedure Code, every police officer making an investigation has to record his proceedings in a diary setting forth the time at which the information reached him, the time at which he began and closed his investigation, the place or places visited by him and a statement of the circumstances ascertained through his investigation. It is specifically provided in Sub-clause (3) of Section 172 that neither the Accused nor his agents shall be entitled to call for such diaries nor shall he or they be entitled to see them merely because they are referred to by the court, but if they are used by the police officer who made them to refresh his memory, or if the court uses them for the purpose of contradicting such police officer, the provisions of Section 161 Code of Criminal Procedure or the provisions of Section 145 of the Evidence Act shall be complied with. The court is empowered to call for such diaries not to use it as evidence but to use it as aid to find out anything that happened during the investigation of the crime. These provisions have been incorporated in the Code of Criminal Procedure to achieve certain specific objectives. The police officer who is conducting the investigation may come across a series of information which cannot be divulged to the Accused. He is bound to record such facts in the case diary. But if the entire case diary is made available to the Accused, it may cause serious prejudice to others and even affect the safety and security of those who may have given statements to the police. The confidentiality is always kept in the matter of criminal investigation and it is not desirable to make available the entire case diary to the Accused. In the instant case, we have noticed that the entire case diary was given to the Accused and the investigating officer was extensively cross-examined on many facts which were not very much relevant for the purpose of the case. The learned Sessions Judge should have been careful in seeing that the trial of the case was conducted in accordance with the provisions of Code of Criminal Procedure.
[underlining added]
The same position has been reiterated in Naresh Kumar Yadav v. Ravindra Kumar and Ors. MANU/SC/8067/2007 : (2008) 1 SCC 632 [Paras 11 to 14], Malkiat Singh and Ors. v. State of Punjab MANU/SC/0622/1991 : (1991) 4 SCC 341 [Para 11] and other judgments.
51. It is seen from various judgments that on several instances, court always received and perused the case diaries/materials collected by the prosecution during investigation to satisfy itself as to whether the investigation is proceeding in the right direction or for consideration of the question of grant of bail etc. In Directorate of Enforcement and Anr. v. P.V. Prabhakar Rao MANU/SC/0958/1997 : (1997) 6 SCC 647, the Supreme Court perused the records to examine the correctness of the order passed by the High Court granting bail. In R.K. Krishna Kumar v. State of Assam and Ors. MANU/SC/0858/1998 : (1998) 1 SCC 474, the Supreme Court received court diary maintained Under Section 172 Code of Criminal Procedure and perused the case diary to satisfy itself that the investigation has revealed that the company thereon has funded the organisation (ULFA) and that the Appellants thereon had a role to play in it. While considering the question of arrest of five well known human rights activists, journalists, advocates and political workers, in Romila Thapar and Ors. v. Union of India and Ors. MANU/SC/1098/2018 : (2018) 10 SCC 753, this Court perused the registers containing relevant documents and the case diary produced by the State of Maharashtra. However, the court avoided to dilate on the factual position emerging therefrom on the ground that any observation made thereon might cause prejudice to the Accused or to the prosecution in any manner. Upholding the validity of Section 172(3) Code of Criminal Procedure and observing that "there can be no better custodian or guardian of the interest of justice than the court trying the case", in Mukund Lal v. Union of India and Anr. MANU/SC/0322/1988 : 1989 Supp. (1) SCC 622, the Supreme Court held as under:
3. .....
So far as the other parts are concerned, the Accused need not necessarily have a right of access to them because in a criminal trial or enquiry, whatever is sought to be proved against the Accused, will have to be proved by the evidence other than the diary itself and the diary can only be used for a very limited purpose by the court or the police officer as stated above. .......... When in the enquiry or trial, everything which may appear against the Accused has to be established and brought before the court by evidence other than the diary and the Accused can have the benefit of cross-examining the witnesses and the court has power to call for the diary and use it, of course not as evidence but in aid of the enquiry or trial, I am clearly of the opinion, that the provisions Under Section 172(3) Code of Criminal Procedure cannot be said to be unconstitutional.
We fully endorse the reasoning of the High Court and concur with its conclusion. We are of the opinion that the provision embodied in Sub-section (3) of Section 172 of the Code of Criminal Procedure cannot be characterised as unreasonable or arbitrary. Under Sub-section (2) of Section 172 Code of Criminal Procedure the court itself has the unfettered power to examine the entries in the diaries. This is a very important safeguard. The legislature has reposed complete trust in the court which is conducting the inquiry or the trial. It has empowered the court to call for any such relevant case diary; if there is any inconsistency or contradiction arising in the context of the case diary the court can use the entries for the purpose of contradicting the police officer as provided in Sub-section (3) of Section 172 of the Code of Criminal Procedure Ultimately there can be no better custodian or guardian of the interest of justice than the court trying the case. No court will deny to itself the power to make use of the entries in the diary to the advantage of the Accused by contradicting the police officer with reference to the contents of the diaries. In view of this safeguard, the charge of unreasonableness or arbitrariness cannot stand scrutiny. ....... Public interest demands that such an entry is not made available to the Accused for it might endanger the safety of the informants and it might deter the informants from giving any information to assist the investigating agency, .......
[underlining added]
52. So far as the production of the case diary during trial and reference to the same by the court and the interdict against Accused to call for case diary is governed by Section 172 Code of Criminal Procedure As per Sub-section (3) of Section 172, neither the Accused nor his agent is entitled to call for such case diaries and also not entitled to see them during the course of enquiry or trial. The case diaries can be used for refreshing memory by the investigating officer and court can use it for the purpose of contradicting such police officer as per provisions of Section 161 or Section 145 of the Indian Evidence Act. Unless the investigating officer or the court so uses the case diary either to refresh the memory or for contradicting the investigating officer as previous statement Under Section 161, after drawing his attention Under Section 145, the entries in case diary cannot be used by the Accused as evidence (vide Section 172(3) Code of Criminal Procedure.).
53. It is well-settled that the court can peruse the case diary/materials collected during investigation by the prosecution even before the commencement of the trial inter-alia in circumstances like: (i) to satisfy its conscience as to whether the investigation is proceeding in the right direction; (ii) to satisfy itself that the investigation has been conducted in the right lines and that there is no misuse or abuse of process in the investigation; (iii) whether regular or anticipatory bail is to be granted to the Accused or not; (iv) whether any further custody of the Accused is required for the prosecution; (v) to satisfy itself as to the correctness of the decision of the High Court/trial court which is under challenge. The above instances are only illustrative and not exhaustive. Where the interest of justice requires, the court has the powers, to receive the case diary/materials collected during the investigation. As held in Mukund Lal, ultimately there can be no better custodian or guardian of the interest of justice than the court trying the case. Needless to point out that when the Court has received and perused the documents/materials, it is only for the purpose of satisfaction of court's conscience. In the initial stages of investigation, the Court may not extract or verbatim refer to the materials which the Court has perused (as has been done in this case by the learned Single Judge) and make observations which might cause serious prejudice to the Accused in trial and other proceedings resulting in miscarriage of justice.
54. The Enforcement Directorate has produced the sealed cover before us containing the materials collected during investigation and the same was received. Vide order dated 29.08.2019, we have stated that the receipt of the sealed cover would be subject to our finding whether the court can peruse the materials or not. As discussed earlier, we have held that the court can receive the materials/documents collected during the investigation and peruse the same to satisfy its conscience that the investigation is proceeding in the right lines and for the purpose of consideration of grant of bail/anticipatory bail etc. In the present case, though sealed cover was received by this Court, we have consciously refrained from opening the sealed cover and perusing the documents. Lest, if we peruse the materials collected by the Respondent and make some observations thereon, it might cause prejudice to the Appellant and the other co-Accused who are not before this Court when they are to pursue the appropriate relief before various forum. Suffice to note that at present, we are only at the stage of considering the pre-arrest bail. Since according to the Respondent, they have collected documents/materials for which custodial interrogation of the Appellant is necessary, which we deem appropriate to accept the submission of the Respondent for the limited purpose of refusing pre-arrest bail to the Appellant.
55. Of course, while considering the request for anticipatory bail and while perusing the materials/note produced by the Enforcement Directorate/CBI, the learned Single Judge could have satisfied his conscience to hold that it is not a fit case for grant of anticipatory bail. On the other hand, the learned Single Judge has verbatim quoted the note produced by the Respondent-Enforcement Directorate. The learned Single Judge, was not right in extracting the note produced by the Enforcement Directorate/CBI which in our view, is not a correct approach for consideration of grant/refusal of anticipatory bail. But such incorrect approach of the learned Single Judge, in our view, does not affect the correctness of the conclusion in refusing to grant of anticipatory bail to the Appellant in view of all other aspects considered herein.
Re: Contention: The Appellant should have been confronted with the materials collected by the Enforcement Directorate earlier, before being produced to the court.
56. On behalf of the Appellant, it was contended that the materials produced by the Enforcement Directorate could have never been relied upon for the purpose of consideration of anticipatory bail unless the Appellant was earlier confronted with those documents/materials. It was submitted that if the Appellant's response was completely "evasive" and "non co-operative" during the three days when he was interrogated i.e. 19.12.2018, 01.01.2019 and 21.01.2019, the Respondent should place before the court the materials put to the Appellant and the responses elicited from the Accused to demonstrate to the court that "the Accused was completely evasive and non-co-operative".
57. Contention of the Appellant that the court will have to scrutinise the questions put to the Accused during interrogation and answers given by the Appellant and satisfy itself whether the answers were "evasive or not", would amount to conducting "mini trial" and substituting court's view over the view of the investigating agency about the "cooperation" or "evasiveness" of the Accused and thereafter, the court to decide the questions of grant of anticipatory bail. This contention is far-fetched and does not merit acceptance.
58. As rightly submitted by learned Solicitor General that if the Accused are to be confronted with the materials which were collected by the prosecution/Enforcement Directorate with huge efforts, it would lead to devastating consequences and would defeat the very purpose of the investigation into crimes, in particular, white collar offences. If the contention of the Appellant is to be accepted, the investigating agency will have to question each and every Accused such materials collected during investigation and in this process, the investigating agency would be exposing the evidence collected by them with huge efforts using their men and resources and this would give a chance to the Accused to tamper with the evidence and to destroy the money trail apart from paving the way for the Accused to influence the witnesses. If the contention of the Appellant is to be accepted that the Accused will have to be questioned with the materials and the investigating agency has to satisfy the court that the Accused was "evasive" during interrogation, the court will have to undertake a "mini trial" of scrutinizing the matter at intermediary stages of investigation like interrogation of the Accused and the answers elicited from the Accused and to find out whether the answers given by the Accused are 'evasive' or whether they are 'satisfactory' or not. This could have never been the intention of the legislature either under PMLA or any other statute.
59. Interrogation of the Accused and the answers elicited from the Accused and the opinion whether the answers given by the Accused are "satisfactory" or "evasive", is purely within the domain of the investigating agency and the court cannot substitute its views by conducting mini trial at various stages of the investigation.
60. The investigation of a cognizable offence and the various stages thereon including the interrogation of the Accused is exclusively reserved for the investigating agency whose powers are unfettered so long as the investigating officer exercises his investigating powers well within the provisions of the law and the legal bounds. In exercise of its inherent power Under Section 482 Code of Criminal Procedure, the court can interfere and issue appropriate direction only when the court is convinced that the power of the investigating officer is exercised mala fide or where there is abuse of power and non-compliance of the provisions of Code of Criminal Procedure. However, this power of invoking inherent jurisdiction to issue direction and interfering with the investigation is exercised only in rare cases where there is abuse of process or non-compliance of the provisions of Criminal Procedure Code.
61. In King-Emperor v. Khwaja Nazir Ahmad MANU/PR/0007/1944 : AIR 1945 PC 18, it was held as under:
.....it is of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes upon them the duty of enquiry.
In India as has been shown there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the Court. The functions of the judiciary and the police are complementary not overlapping and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the Court to intervene in an appropriate case when moved Under Section. 491 of the Code of Criminal Procedure. ....
[underlining added]
62. The above decision in Khwaja Nazir Ahmad has been quoted with approval by the Supreme Court in Abhinandan Jha and Ors. v. Dinesh Mishra MANU/SC/0054/1967 : AIR 1968 SC 117 and State of Bihar and Anr. v. J.A.C. Saldanha and Ors. MANU/SC/0253/1979 : (1980) 1 SCC 554. Observing that the investigation of the offence is the field exclusively reserved for the executive through the police department and the superintendence over which vests in the State Government, in J.A.C. Saldanha, it was held as under:
25. There is a clear-cut and well demarcated sphere of activity in the field of crime detection and crime punishment. Investigation of an offence is the field exclusively reserved for the executive through the police department the superintendence over which vests in the State Government. The executive which is charged with a duty to keep vigilance over law and order situation is obliged to prevent crime and if an offence is alleged to have been committed it is its bounded duty to investigate into the offence and bring the offender to book. Once it investigates and finds an offence having been committed it is its duty to collect evidence for the purpose of proving the offence. Once that is completed and the investigating officer submits report to the court requesting the court to take cognizance of the offence Under Section 190 of the Code its duty comes to an end. On a cognizance of the offence being taken by the court the police function of investigation comes to an end subject to the provision contained in Section 173(8), there commences the adjudicatory function of the judiciary to determine whether an offence has been committed and if so, whether by the person or persons charged with the crime by the police in its report to the court, and to award adequate punishment according to law for the offence proved to the satisfaction of the court. There is thus a well defined and well demarcated function in the field of crime detection and its subsequent adjudication between the police and the Magistrate. This had been recognised way back in King Emperor v. Khwaja Nazir Ahmad MANU/PR/0034/1943 : AIR 1944 PC 18 .........
The same view was reiterated in Dukhishyam Benupani, Asstt. Director, Enforcement Directorate (FERA) v. Arun Kumar Bajoria MANU/SC/0872/1998 : (1998) 1 SCC 52, M.C. Abraham and Anr. v. State of Maharashtra and Ors. MANU/SC/1190/2002 : (2003) 2 SCC 649, Subramanian Swamy v. Director, Central Bureau of Investigation and Anr. MANU/SC/0417/2014 : (2014) 8 SCC 682 and Divine Retreat Centre v. State of Kerala and Ors. MANU/SC/1150/2008 : (2008) 3 SCC 542.
63. Investigation into crimes is the prerogative of the police and excepting in rare cases, the judiciary should keep out all the areas of investigation. In State of Bihar and Anr. v. P.P. Sharma, IAS and Anr.
MANU/SC/0542/1992 : 1992 Supp. (1) 222, it was held that "The investigating officer is an arm of the law and plays a pivotal role in the dispensation of criminal justice and maintenance of law and order. .....Enough power is therefore given to the police officer in the area of investigating process and granting them the court latitude to exercise its discretionary power to make a successful investigation...".
In Dukhishyam Benupani, Asstt. Director, Enforcement Directorate (FERA) v. Arun Kumar Bajoria
MANU/SC/0872/1998 : (1998) 1 SCC 52, this Court held that "......it is not the function of the court to monitor investigation processes so long as such investigation does not transgress any provision of law. It must be left to the investigating agency to decide the venue, the timings and the questions and the manner of putting such questions to persons involved in such offences. A blanket order fully insulating a person from arrest would make his interrogation a mere ritual."