{"id":319432,"date":"2024-04-04T17:00:40","date_gmt":"2024-04-04T11:30:40","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=319432"},"modified":"2024-04-08T16:49:04","modified_gmt":"2024-04-08T11:19:04","slug":"reveal-substance-allegation-if-not-ecir-ed-pmla","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/04\/04\/reveal-substance-allegation-if-not-ecir-ed-pmla\/","title":{"rendered":"[S. 50 PMLA] ED should at least reveal substance of allegations to summoned person, if not copy of ECIR: Allahabad HC"},"content":{"rendered":"
\n

Allahabad High Court:<\/span> In an application filed under Section 482<\/a> of the Code of Criminal Procedure, 1973<\/a> (‘CrPC’) seeking to quash two Enforcement Case Information Reports (‘ECIR’) registered by Directorate of Enforcement (‘ED’) and the pursuant summons issued in their regard, Mohd. Faiz Alam Khan, J. dismissed the application saying that it was filed prematurely, and that the investigation process should not be hampered at this initial stage.<\/p>\n

The applicant, aggrieved by the two additional ECIRs and the pursuant summons arising out of the ECIRs against him, has been asked to furnish information regarding 111 companies in respect of which a complaint has been filed by the Serious Fraud Investigation Office (‘SFIO’) and consequently by the ED under Prevention of Money Laundering Act, 2002<\/a> (‘PMLA’). The Bench noted that a First Information Report and an ECIR were registered against the applicant and regarding the same cause of action. The Court while assessing the validity of lodging the second and third ECIR, said that it to be recalled that an ECIR is not an FIR as held by the Supreme Court in Vijay Madanlal Choudhary<\/span> v. UOI<\/span>, (2023) 21 ITR-OL 1<\/a>, (‘Vijay Madanlal Choudhary Case’). The Court further said that as the contents of the two ECIRs were not revealed by the ED there was no relevant material to make a decision regarding its validity.<\/p>\n

The Court referring to the Vijay Madanlal Choudhary Case<\/span> and Section 50<\/a> of the PMLA<\/a>, to determine the issue of summons by the ED in the background of Articles 20(3)<\/a> and 21<\/a> of the Constitution<\/a>, said that that the power conferred upon the authorities by virtue of Section 50<\/a> of PMLA<\/a> empowers them to summon any person whose attendance may be crucial either to give some evidence or to produce any records during the course of investigation or proceedings under PMLA. The Court also said that the persons summoned are bound to attend in person or through an authorised agent and are required to state truth upon any subject concerning which such person is being examined or is expected to make statement and produce documents as may be required in a case.<\/p>\n

The Bench, relying on Commissioner of Customs, Calcutta<\/span> v. M.M. Exports<\/span> (2010) 15 SCC 647<\/a>, said that it cannot interfere at the stage of issuance of summons.<\/p>\n

The Bench said that the Director for the purpose of Section 12<\/a> of PMLA<\/a> shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908<\/a>, while trying a suit in respect of the matters stipulated. Therefore, the Court said that enforcing the attendance of any person is certainly permissible for the purpose of proceeding with the investigation.Discussing the wide scope of the PMLA, the Court also explained that if the competent authorities under the PMLA is of an opinion that personal appearance is required for seeking specific clarifications, then the authorities competent are empowered enough to issue summons for the personal appearance.<\/p>\n

The Court referred to Poolpandi<\/span> v. Supdt., Central Excise<\/span>, (1992) 3 SCC 259<\/a> to point out that the presence of lawyers during the questioning of the persons may not be necessary if the investigating authority feels that such presence may encourage the person being investigated to adopt a non-cooperative attitude.<\/p>\n

Assessing whether it is necessary to furnish a copy of the ECIR to a person apprehending arrest, the Bench brought up the view taken in the Vijay Madanlal Choudhary case<\/span> that the supply of ECIR in every case to person concerned is not mandatory as it is an internal document of the ED and that revealing the copy of the ECIR may defeat the purpose of PMLA with respect attaching of the property under scanner. It was also laid down that non-supply of ECIR is not violation of a constitutional right.<\/p>\n

The Court said that the PMLA, being a Special Act, has provided certain mandatory provisions in order to ensure the effective investigation of the offence of money laundering and the officers empowered under PMLA are required to make investigation into the offences under the said law and they cannot be equated with police officers.<\/p>\n

In the matter at hand, with respect to production of documents, the Court said that the investigation in the instant matter was still continuing and the applicant was only summoned to appear and submit certain documents which may be in his possession from when he was an employee of the companies under scanner, thus the applicant’s prayer for quashing of ECIRs itself was premature as at this stage as the status of the applicant before the ED was not known and the same is in the realm of future. The Court said that no person is entitled in law to evade the summons issued under Section 50<\/a> of the PMLA<\/a> on the ground that there is a possibility that he may be arrested in the future and mere registration of the ECIR does not make a person an accused.<\/p>\n

The Bench directed the ED to place the copies of the ECIR in a sealed cover for perusal, however, said that the Court is not inclined to promote the culture of sealed covers in judicial proceedings and the question whether the ED cannot deny the copy of ECIR to an accused person or even to a witness, may be deliberated in depth by the Court in an appropriate case. The Court further said that if the matter is not extraordinary or special, a person summoned by ED, in whatever capacity, is required to get the substance of accusation, if not the copy of ECIR.<\/p>\n

The Court opined that interference at this stage in respect of the facts and the circumstances, is unwarranted as the ED had not filed any complaint against the applicant and therefore, is not yet an accused in the ECIRs.<\/p>\n

Therefore, the Court, finding no good reason to quash the summons, dismissed the application.<\/p>\n

[Saurabh Mukund v. Directorate of Enforcement, 2024 SCC OnLine All 963<\/a>, Order dated: 29-03-2024<\/span>]<\/p>\n\n

Advocates who appeared in this case :<\/p>\n

For the Applicant:<\/span> Advocate Neeraj Jain, Advocate Ram Prakash Pandey<\/p>\n

For the Opposite Party:<\/span> Advocate Rohit Tripathi<\/p>\n

Buy Code of Criminal Procedure, 1973  HERE<\/a><\/h3>\n

\"Code<\/a><\/p>\n

Buy Constitution of India  HERE<\/a><\/h3>\n

\"Constitution<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Mere registration of ECIR does not make a person an accused”<\/p>\n","protected":false},"author":67011,"featured_media":314936,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[2822,52706,37261,67070,19261,34084,67211,67210,27494],"class_list":["post-319432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-Allahabad_High_Court","tag-ecir","tag-ed","tag-justice-mohd-faiz-alam-khan","tag-money-laundering","tag-pmla","tag-power-to-summon","tag-section-50-pmla","tag-summons"],"yoast_head":"\nED should at least reveal substance of allegations to summoned person, if not copy of ECIR: Allahabad HC | SCC Times<\/title>\n<meta name=\"description\" content=\"The Allahabad HC said that the substance of allegations should be revealed in matters which are not extraordinary or special.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2024\/04\/04\/reveal-substance-allegation-if-not-ecir-ed-pmla\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"[S. 50 PMLA] ED should at least reveal substance of allegations to summoned person, if not copy of ECIR: Allahabad HC\" \/>\n<meta property=\"og:description\" content=\"The Allahabad HC said that the substance of allegations should be revealed in matters which are not extraordinary or special.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.scconline.com\/blog\/post\/2024\/04\/04\/reveal-substance-allegation-if-not-ecir-ed-pmla\/\" \/>\n<meta property=\"og:site_name\" content=\"SCC Times\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/scc.online\/\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-04T11:30:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-08T11:19:04+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"887\" \/>\n\t<meta property=\"og:image:height\" content=\"591\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Editor\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"[S. 50 PMLA] ED should at least reveal substance of allegations to summoned person, if not copy of ECIR: Allahabad HC\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Editor\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/post\\\/2024\\\/04\\\/04\\\/reveal-substance-allegation-if-not-ecir-ed-pmla\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/post\\\/2024\\\/04\\\/04\\\/reveal-substance-allegation-if-not-ecir-ed-pmla\\\/\"},\"author\":{\"name\":\"Editor\",\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/#\\\/schema\\\/person\\\/84e42bab48238baf12c7e33b3d9761fe\"},\"headline\":\"[S. 50 PMLA] ED should at least reveal substance of allegations to summoned person, if not copy of ECIR: Allahabad HC\",\"datePublished\":\"2024-04-04T11:30:40+00:00\",\"dateModified\":\"2024-04-08T11:19:04+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/post\\\/2024\\\/04\\\/04\\\/reveal-substance-allegation-if-not-ecir-ed-pmla\\\/\"},\"wordCount\":1036,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/post\\\/2024\\\/04\\\/04\\\/reveal-substance-allegation-if-not-ecir-ed-pmla\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/wp-content\\\/uploads\\\/2024\\\/02\\\/Allahabad-High-Court.webp\",\"keywords\":[\"Allahabad High Court\",\"ECIR\",\"ED\",\"Justice Mohd. 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