Case Title:
Harsha D Vs. State By High Ground Police Station
Date of Order:
October 17, 2022
Bench:
Hon’ble Justice M. Nagaprasanna
Parties:
Petitioner- Harsha D
Respondents:
1. State By High Ground Police Station
2. The Superintendent Of Police Financial Intelligence Unit(FIU)
3. Directorate Of Enforcement
SUBJECT
This writ petition was filed under Article 226 of the Constitution and was read with Section 482 of the CrPC in order to quash the order passed by the 1st Additional Chief Metropolitan Magistrate of Bengaluru on 14.09.22. The judgement was on a case regarding offences punishable under Sections 34, 120B, 420, 465, 468, and 471 of the IPC. There were two cases registered against the petitioner. The ED filed an application before the learned Magistrate to allow two ED officers to record statements from the petitioner and other accused persons who were in judicial custody. The petitioner objected this, but the application was allowed. This writ petition was filed before this Court against the learned Magistrate’s order allowing this application. It was held by this Court that the impugned judgement was to be set aside as it was out of the jurisdiction of the Magistrate’s Court to even consider the matter. It was only to be considered or decided upon by a Special Court meant for this purpose, in this case, the Sessions Court. Thus the petition was allowed and the impugned judgement was set aside.
IMPORTANT PROVISIONS
- Section 50 of the Prevention of Money-Laundering Act, 2002- This Section was regarding powers of the authorities that could order summons, production of documents and to give evidence, etc. in any matter coming under PMLA. Sub-section (3) of this section directs that all persons so summoned shall be bound to attend in person or through authorized agents and shall state the truth upon any subject with respect to which they were being examined or make statements and produce documents as may be required.
- Section 43 and 44 of the Prevention of Money-Laundering Act, 2002- Section 43 directs constitution of a Special Court or a designated Court and such Court to be the Court of Session. Section 44 deals with offences triable by Special Court. Section 44(1)(c) mandates that if the Court which has taken cognizance of a scheduled offence is other than the Special Court, it shall immediately commit the same to the Special Court.
- Section 71 of the Prevention of Money-Laundering Act, 2002- This section makes the provisions of PMLA to have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
OVERVIEW
- A crime was registered before the Chowk Police Station, Kalaburagi in which the petitioner is one of the accused. The case was transferred to the second respondent that is the Superintendent Of Police Financial Intelligence Unit(FIU).
- Another crime was registered before the High Grounds Police Station against 34 persons in which petitioner is accused No.29. This was during the time when the earlier crime was under investigation. The petitioner was in prison concerning either of these crimes.
- On 30-08-2022 the third respondent that is the Directorate of Enforcement files an application under Section 50(3) of the Prevention of Money Laundering Act, 2002 before the 1st Additional Chief Metropolitan Magistrate of Bengaluru, seeking permission to record the written statement of five accused including the petitioner who were in judicial custody and to allow two officers of the ED with a laptop and a printer for the purpose of recording the statements. Cooperation of the jail authorities were also sought for the recording of such statements.
- The issue involved is the alleged scam with regard to recruitment of Police Sub-Inspectors in the year 2021. Huge cash flow is also alleged in this case. It is to conduct an investigation regarding any money laundering that might have taken place in this case that an Enforcement Case Information Report has been filed against the petitioner and a record of statement is sought by the officers.
- This matter is pending consideration before the Court of the learned Magistrate and it is for the same that the petitioner is under judicial custody.
- The petitioner filed his objections to the application of the ED seeking the collection of evidence. However, the learned Magistrate allowed the application and permitted the ED to record the statements. It was this order that was petitioned against before this Court.
ISSUES RAISED
- Whether it comes within the jurisdiction of the Magistrate’s Court to decide upon a case that comes under the PMLA Act.
ARGUMENTS ADVANCED BY THE PETITIONER
- It was argued by the learned counsel on behalf of the petitioner that once an Enforcement Case Information Report is registered, all actions and any permission that is to be sought regarding such actions had to be before the Sessions Court as the competent Court or any other designated Court.The learned Magistrate did not have the authority to permit the recording of statement as it was outside the Court’s jurisdiction to do so.
ARGUMENTS ADVANCED BY THE RESPONDENT
- The learned counsel appearing for the respondents stated that there was no doubt that proceedings or trials will have to be conducted by the designated Court in such cases. But the petitioner could not have been summoned by the ED for recording of the statement after registration of the crime as he was in judicial custody. Hence necessary Court procedures had to be followed.
JUDGEMENT ANALYSIS
- The Court analysed in detail the statutory framework of the PMLA. Section 2 of the PMLA deals with definitions. Section 2(1)(z) defines a ‘Special Court’ to mean a Court of Session designated as Special Court under sub-section (1) of Section 43. Section 43 states that for trying an offence punishable under the PMLA, the designated Court is the Court of Session.
- ECIR is filed against the petitioner and it is regarding this crime that recording of statements were necessary for the ED in order to ascertain whether any crime under the PMLA had been committed.
- Section 44(1) makes it necessary that if the Court which has taken cognizance of a scheduled offence is other than the Special Court, in this case, the Sessions Court, it shall immediately commit the same to the Special Court.
- Section 50 is regarding the authorities which have the power to summon, order to produce documents and to give evidence under the PMLA. It is directed that all persons summoned in this manner were bound to attend in person or through authorized agents. They shall state the truth regarding the subject for which they were examined, required to make statements and produce relevant documents.
- Section 71 of the PMLA makes it clear that the provisions of PMLA has overriding effect notwithstanding any other law for the time being in force.
- The Court found that merely because custody is ordered by the learned Magistrate, he cannot override the jurisdiction of a Court of Session, which alone has the power to consider any application of this kind. It was out of the jurisdiction of the learned Magistrate to consider an application filed under Section 50 of the PMLA. Permission from the Sessions Court should have been sought for the recording of statements as PMLA mandates that anything emanating from the PMLA shall be considered only by the Special Court. Any proceedings under the IPC, under special enactments or under any other law would have to be carried out before the Sessions Court.
- The Court also referred to previous judgements of the apex court that held that if a Special Court is created under the provisions of a special enactment, then all proceedings falling under that enactment shall be held only before the Special Court. Only the Special Court enjoys all the powers of a court of original jurisdiction in this matter.
- Thus the Court held that the application of the ED to collect evidence and record statements from the petitioner was not maintainable before the learned Magistrate, since the Court did not have the power to direct the same. The judgement of the Magistrate’s Court was set aside. It was held that the order passed on the application by the learned Magistrate required appropriate interference.
CONCLUSION
The High Court of Karnataka held that it was beyond the jurisdiction of the Magistrate’s Court to have allowed the application submitted by ED for the collection of evidence from the petitioner. This was because the offences coming under PMLA ought to be heard and decided upon only by a special court designated for such purpose. In this case it was the Sessions Court. Thus the impugned judgement was set aside and the writ petition under Article 226 filed by the petitioner was allowed.
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