NDLI: P. Chidambaram Vs. Directorate of Enforcement

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Production of Documents in a sealed cover 2002 ss.3 and 4 reason to believe Prevention of Money Laundering Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Prevention of Money Laundering Act, 2002 (0 of 2002)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13 Referred Case 14 Referred Case 15 Referred Case 16 Referred Case 17 Referred Case 18 Referred Case 19 Referred Case 20 Referred Case 21 Referred Case 22 Referred Case 23 Referred Case 24
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Prevention of Money Laundering Act, 2002 – ss.3 and 4 – Production of Documents in a sealed cover for custodial interrogation – Prosecution alleged irregularities in Foreign Investment Promotion Board (FIPB) clearance given to a company for receiving foreign investment to the tune of Rs.305 crores against approved inflow of Rs.4.62 crores – Appellant was the then finance minister – CBI registered FIR against the appellant and other accused persons u/s.120 IPC r/w. s.420 IPC, s.8 and s.13(2) r/w. s.13(1)(d) of the Prevention of Corruption Act, 1988 – Enforcement Directorate also registered a case u/ss.3 and 4 of PMLA against the accused persons – High Court dismissed the application for the grant of anticipatory bail filed by the appellant and held it to be a classic case of money-laundering – On appeal, before the Supreme Court, respondent sought to produce the materials so collected in a sealed cover and requested the Court to peruse the documents and materials to satisfy the conscience of the Court as to the necessity for the custodial interrogation – Respondent contended that the materials so collected cannot be shared with appellant at the initial stage when the Court was considering the matter for grant of prearrest bail – Appellant contended that respondent cannot rely upon the documents without furnishing those documents to the appellant or without questioning the appellant about the materials – Held: 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 instant case, sealed cover was received by the Court, however, the Court refrained from opening the sealed cover and perusing the documents because if Court had made observations after perusal of the materials, it might have caused prejudice to the appellant and other co-accused who were not before the Court – Suffice to note that it was the stage of considering the pre-arrest bail – In the initial stages of investigation where the Court is considering the question of grant of regular bail or pre-arrest bail, it is not for the Court to enter into the demarcated function of the investigation and collection of evidence/materials for establishing the offence and interrogation of the accused and the witnesses – Since, the respondent had collected documents/materials for custodial interrogation of the appellant, the submission of the respondent was accepted for the limited purpose of refusing pre-arrest bail to the appellant – Penal Code, 1860 – s.120B r/w. s.13(1)(d). Prevention of Money Laundering Act, 2002 – ss.3 and 4 – Prevention of Corruption Act, 1988 – s.8 and 13(2) – r/w. s.13(1)(d) – Interrogation of the accused – Interferences of Judiciary in – Held: 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 investigation. Prevention of Money Laundering Act, 2002 – ss.3 and 4 – Code of Criminal Procedure, 1973 – s.438 – Grant of anticipatory bail – Prosecution alleged irregularities in Foreign Investment Promotion Board (FIPB) clearance given to a company for receiving foreign investment to the tune of Rs.305 crores against approved inflow of Rs.4.62 crores – Appellant was the then finance minister – FIR was registered – Enforcement Directorate also registered a case u/ss. 3 and 4 of PMLA against the accused persons – High Court dismissed the application for grant of anticipatory bail filed by the appellant – On appeal, held: Power u/s.438 Cr.P.C. is an extraordinary power and the same has to be exercised sparingly more so, in cases of economic offences – Economic offences stand as a different class as they effect the economic fabric of the society – Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed – Success is such interrogation would elude if the accused knows that he is protected by the order of the Court – In the instant case, having regard to the materials collected by the respondent- Enforcement Directorate and considering the stage of investigation, it was not a fit case to grant anticipatory bail. Code of Criminal Procedure, 1973 – s.438 – Constitution of India – Art. 21 – Right of anticipatory bail, a part of Art.21 of the Constitution of India or not – Held: The legislative intent behind the introduction of s.438 Cr.P.C. is to safeguard the individual’s personal liberty and to protect him from the possibility of being humiliated and from being subjected to unnecessary police custody. However, the court must also keep in view that a criminal offence is not just an offence against an individual, rather the larger societal interest is at stake – Therefore, a delicate balance is required to be established between the two rights-safeguarding the personal liberty of an individual and the societal interest – It cannot be said that refusal to grant anticipatory bail would amount to denial of the rights conferred upon the appellant u/Art. 21 of the Constitution of India. Words and Phrases – ‘reason to believe’ – Held: As per definition in s.26 IPC, a person is said to be 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 on dealt with in a manner which may result in frustrating any proceedings for confiscation of their property under the Prevention of Money - Laundering Act, 2002. Words and Phrases – Economic offence – discussed.
Judge	Hon'ble Ms. Justice R. Banumathi
Neutral Citation	2019 INSC 1010
Petitioner	P. Chidambaram
Respondent	Directorate Of Enforcement
SCR	[2019] 12 S.C.R. 172
Judgement Date	2019-09-05
Case Number	1340

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