[PMLA] ECIR copy not given, process itself is punishment in ED proceedings: Menaka Guruswamy to Supreme Court

Senior Advocate Menaka Guruswamy told the Supreme Court on Thursday that when a person is accused under the Prevention of Money Laundering Act of 2002 (PMLA), the process and procedure under the Act itself becomes a punishment [Sweta Mangal vs Union of India and others]..Guruswamy was making submissions before a Bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar on behalf of Sweta Mangal an accused in the 108 Ambulance case from Rajasthan.An FIR was filed regarding financial irregularities against Sweta and others which was being investigated by the CBI. Unknown to her, an Enforcement Case Information Report (ECIR) was filed by the Enforcement Directorate (ED) and summons were issued to her for appearing before ED officers. Soon thereafter, her house along with other assets was attached by the ED in March, 2017 through a provisional attachment.."Not giving me copy of ECIR, not giving me contentions of investigation, violate principle of 'fair trial'. Fairness of investigation and fairness of trial require that I am given a copy of the ECIR, and to have an investigation manual," she contended.The Supreme Court was hearing a batch of petitions challenging the Constitutionality of various provisions of the PMLA..Guruswamy pointed out that a complaint was filed by the ED before the Special Court in 2018. Since 2018, the matter was listed more than 36 times with neither the trial for the predicate offence nor the laundering offence progressing. The ECIR on the basis of which this action is being taken, is now six years old and the Court is yet to take cognizance, she said.Guruswamy contended that the scheme of the PMLA has enabled:- the seizure of assets such as the petitioner’s house; - The examination of the petitioner under the special procedure under Section 50; and - A 6 year long pre-trial procedure in both the predicate offence and the laundering offence with limited right of participation as accused and a reverse burden of proof..She also highlighted statistics on the number of pending trials under PMLA while pointing out how several attachments that have taken place during pendency of the trial..The Bench commented that it "cannot test the law on performance of the executive or the police and their inefficiency and inability to take the prosecution to its logical end.""Therefore I started my arguments on Constitutionality of the provisions," Guruswamy replied. .Specifically on Constitutionality, Guruswamy contended the following:- The provisions of the PMLA must stand the test of due process under Article 21 of the Constitution;- Section 50 of the PMLA, infringes upon the right to liberty of persons summoned under the Act and violates the right against self-incrimination;-Section 44(1)(d) of the PMLA irreversibly prejudices the accused in the trial adjudicating the predicate offence. - The PMLA creates an over-broad offence with no fetters on investigatory powers..Vineet Narain was the first judgment i worked as a lawyer with my Senior Ashok Desai. It's imprinted in my mind.Menaka Guruswamy.Guruswamy then referred to the Vineet Narain judgment of the Supreme Court."Vineet Narain was the first judgment I worked as a lawyer with my Senior Ashok Desai. It is imprinted in my mind," she said..She the proceeded to point out how the ED does not have a manual for investigation and does not follow provisions of Code of Criminal Procedure (CrPC). "We need to have an investigation manual. There needs to be some checks and balances on ED to ensure that functions with complete guidelines," she said.She contended how the Supreme Court itself has said that police, CBI manuals etc have to be made available to all."Whether it's the CBI Manual or Police Manual or Income Tax Manual, Supreme Court has opined that these manuals are government documents and has to be made available to all," she said. But ED continues to not have an investigation manual, she said. "When compared to CrPC standards, a much higher standard is applied in PMLA. This has enabled the State to bypass the predicate Act and use the provisions of PMLA," she pointed out. Regarding attachment of properties under PMLA, she drew a comparison between Acts including Securities and Exchange Board of India Act (SEBI Act) and the Unlawful Activities Prevention Act (UAPA)"Even in UAPA (which is under terrorism, a much senior offence), attachment can be made POST conviction. In UAPA, possession doesn't change when attachment is done. In PMLA, possession changes. That is the important change in PMLA," she submitted. Guruswamy also highlighted one other difficulty faced by litigants, vacancies in Appellate Tribunal under PMLA."If I want to challenge the initial order, I have to go to the Appellate tribunal. The Appellate Tribunal chairperson vacancy hasn't been filled up and members retire. This is the case even for adjudicating authority," she said..After Guruswamy, Senior Advocate Aabad Ponda made arguments. .Ponda argued on the aspect of the vires of Section 50(3) PMLA in the context of special laws..He contended that there are statutes similar to PMLA which do not take the CrPC route, but he distinguished between those and PMLA.He also contended that under Article 20(3) ,the protection is not only available for oral statements but also for production of documents."If a predicate offence is registered, does that mean you will not produce documents," Justice Khanwilkar asked."Under Article 20(3) the protection is not only available for oral statements but also production of documents," Ponda maintained."Evidence Act is not ruled out in PMLA proceedings, correct. For purposed of Section 106 of Evidence Act, aren't you not bound to disclose facts that are in your knowledge? For example, if you are charged with travelling without a ticket in train, the onus of the proving that you have a ticket is on you," Justice Dinesh Maheshwari questioned."Section 106 does not apply during the process of investigation. It only applies in trial. I am only arguing that you cannot compel the person at the stage of investigation," Ponda responded.He further submitted that when ED arrests someone and that person does not confess, the remand under the Act is extended on the ground that the person is not co-operating. "ED arrests when someone is not co-operating. If ED summons a person, one is bound to appear. Once I appear, I am coerced to confess. Otherwise I am arrested or my remand is extended on the ground that I am not co-operating," Ponda said."Is it your argument that your right to remain silent is taken away by Section 50 of PMLA," asked Justice Khanwilkar."Yes," Ponda replied.Ponda also placed reliance on three case laws - Ramanlal Bhogilal Shah v. D. K. Guha, Shyamlal Mohanlal v. State Of Gujarat and The State Of Bombay v. Kathi Kalu Oghad."PMLA has to follow Ramanlal Bhogilal Shah vs DK Guha. I am bound to appear, if summoned. I am bound to give statements or documents that are non incriminating. (But) if I am asked incriminating questions, I can remain silent as per Article 20(3)," he said.However, PMLA goes against this, he said highlighting Section 63 of the Act."If I don't answer any question, ED can fine me ₹10,000. If I do not answer 100 questions, I can be fined ₹10 lakh. These are threats under the statute that make direct inroads into Article 20(3)," he contended..He also referred to Rule 11 of PMLA Rules 2005. "While summoning, penal provisions kick in. Consequences is the prosecutor is the judge. If you see Section 63(3) PMLA Act, the very officer will decide the quantum of punishment," he further said..Though PMLA may be a special case, a law cannot have a one-sided investigation which cripples the accused even before he enters the trial, he stated."You cannot have a one sided investigation under the compulsion of statute and there is a presumption (against the accused). The man is crippled before he enters trial. There is no element of voluntariness, an important facet of Article 20 (3)," he argued..Senior Advocate Siddharth Agarwal then commenced his arguments on retrospective applicability of PMLA when the Bench rose. The matter will be heard next on February 22.

[PMLA] ECIR copy not given, process itself is punishment in ED proceedings: Menaka Guruswamy to Supreme Court

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