The Supreme Court of India through its seminal judgement in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. [SLP(Crim.) No. 4634 of 2014] shaped the contours of the Prevention of Money Laundering Act, 2002 (PMLA) in India. The SC in this case upheld the powers of the Enforcement Directorate (ED) to investigate persons, conduct searches and raids, and even arrest citizens under the stringent provisions of the PMLA to curb the offences of money laundering in India.
Here are 5 notable points to be aware of in situations facing an ED Officer:
Are ED Officers the same as Police Officers?No, the ED officers are not Police officers or the same as Police Officers.
Section 45 (1A) of the PMLA forbids police officers from investigating offences of money laundering and that acts as a bar on the powers and authority of the police officers. The investigation of money laundering offences is separately reserved for ED officers.The provisions given under Sections 50 (2) and 50 (3) of the PMLA discuss the power entrusted to the ED officials.Statements recorded before an ED officer are admissible as evidence in a Court of Law. However, statements recorded by a police officer under Section 161 of the Cr.P.C. are not incriminating in nature and do not act judicially.
Can a person accused under the PMLA 2002 claim his right against self-incrimination?No, not at the stage of summons.
Article 20(3) of the Constitution of India protects an individual from becoming a witness against themselves.However, the statements recorded by the ED authorities under the PMLA 2002, of persons at the stage of summons are admissible evidence before the Court as such persons are not yet termed as accused. Thus, such a person cannot claim protection under Article 20(3) of the Constitution of India.
What can be the repercussions of non-cooperation with ED officers under the PMLA 2002?Failure to furnish correct information will invite punishment.
Under Section 63 of the PMLA, there is no power to remain silent while facing an ED officer, and avoidance of to answer can be flagged as being non-cooperative during the proceedings, and the same attracts a penalty under the PMLA.After a formal arrest, the confessions made by an accused shall be protected under Article 20(3) of the Constitution; however, such a defence will not preclude the consequences under Section 63.Hence, a person either appearing on receipt of summons or as an accused is bound to furnish the truth. Any departure from the same can attract coercive action under PMLA.
Are ECIRs the same as FIRs?No, ECIR is not the same as FIR.
The mechanism of investigation and attachment under PMLA are by way of a civil action, hence there is no need to register a formal report before initiating prosecution, unlike FIR.There is nothing in the statute mandating to record ECIR and furnish a copy thereof to the accused to disclose the grounds unlike Section 154 of the Cr.P.C.
Innocent till proven guilty or Guilty till proven innocent?The PMLA 2002 entails the rule of Reverse Burden of Proof. It can be explained as follows-
Under Section 24 of the PMLA, when charged with the offence of PMLA the burden to disprove such allegations of money laundering is upon the person charged.The usual notion of innocent till proven guilty does not find any place in the PMLA proceedings before ED.This modus is contrary to usual practice under the Indian Penal Laws.The core effect of the 2002 Act will continue to be the same and the present judgement has affirmed ED’s powers and functions, through this special code for curbing money laundering.
Disclaimer: This note only provides information on the powers and functions of an ED Officer under the PMLA 2002. The note is for informational purposes only. The information and/or observations contained in this note do not constitute legal advice and should not be acted upon in any specific situation without appropriate legal advice.
Authored by:
Mr Shreyas Mehrotra
Head of Practice- Dispute Resolution
