PREM PRAKASH versus UNION OF INDIA THROUGH THE DIRECTORATE OF ENFORCEMENT

25. This Court in Vijay Madanlal Choudhary (supra) anticipated the myriad situations that may arise in the recording of the Section 50 statement and discussed the parameters for dealing with them. In Rajaram Jaiswal vs. State of Bihar, AIR 1964 SC 828, a judgment quoted in extenso in Vijay Madanlal Choudhary (supra), this Court observed that the expression “police officer “ in Section 25 of the Evidence Act is not confined to persons who are members of the regularly constituted police force. Further, setting out the test for determining whether an officer is a “police officer “ for the purpose of Section 25 of the Evidence Act, this Court in Rajaram Jaiswal (supra) held (quoted from para 165 of Vijay Madanlal Choudhary (supra) [2024] 8 S.C.R.  Prem Prakash v. Union of India Through The Directorate of Enforcement “165(ii) It may well be that a statute confers powers and imposes duties on a public servant, some of which are analogous to those of a police officer. But by reason of the nature of other duties which he is required to perform he may be exercising various other powers also. It is argued on behalf of the State that where such is the case the mere conferral of some only of the powers of a police officer on such a person would not make him a police officer and, therefore, what must be borne in mind is the sum total of the powers which he enjoys by virtue of his office as also the dominant purpose for which he is appointed. The contention thus is that when an officer has to perform a wide range of duties and exercise correspondingly a wide range of powers, the mere fact that some of the powers which the statute confers upon him are analogous to or even identical with those of a police officer would not make him a police officer and, therefore, if such an officer records a confession it would not be hit by S. 25 of the Evidence Act. In our judgment what is pertinent to bear in mind for the purpose of determining as to who can be regarded a ‘police officer’ for the purpose of this provision is not the totality of the powers which an officer enjoys but the kind of powers which the law enables him to exercise. The test for determining whether such a person is a “police officer” for the purpose of S. 25 of the Evidence Act would, in our judgment, be whether the powers of a police officer which are conferred on him or which are exercisable by him because he is deemed to be an officer in charge of police station establish a direct or substantial relationship with the prohibition enacted by S. 25, that is, the recording of a confession. In other words, the test would be whether the powers are such as would tend to facilitate the obtaining by him of a confession from a suspect or delinquent. If they do, then it is unnecessary to consider the dominant purpose for which he is appointed or the question as to what other powers he enjoys. These questions may perhaps be relevant for consideration where the powers of the police officer conferred upon him are of a very limited character 974 and are not by themselves sufficient to facilitate the obtaining by him of a confession.” (Emphasis supplied)

26. Four decades ago, V.R. Krishna Iyer, J. in his inimitable style, speaking for this Court in Nandini Satpathy Vs P.L. Dani and Another (1978) 2 SCC 424 observed as under:- “50. We, however, underscore the importance of the specific setting of a given case for judging the tendency towards guilt. Equally emphatically, we stress the need for regard to the impact of the plurality of other investigations in the offing or prosecutions pending on the amplitude of the immunity. “To be witness against oneself” is not confined to particular offence regarding which the questioning is made but extends to other offences about which the accused has reasonable apprehension of implication from his answer. This conclusion also flows from “tendency to be exposed to a criminal charge”. “A criminal charge” covers any criminal charge then under investigation or trial or which imminently threatens the accused.” (Emphasis supplied) “57. We hold that Section 161 enables the police to examine the accused during investigation. The prohibitive sweep of Article 20(3) goes back to the stage of police interrogation- not, as contended, commencing in court only. In our judgment, the provisions of Article 20(3) and Section 161(1) substantially cover the same area, so far as police investigations are concerned. The ban on self-accusation and the right to silence, while one investigation or trial is under way, goes beyond that case and protects the accused in regard to other offences pending or imminent, which may deter him from voluntary disclosure of criminatory matter. We are disposed to read ‘compelled testimony’ as evidence procured not merely by physical threats or violence but by psychic torture, atmospheric pressure, environmental coercion tiring interrogative prolixity, [2024] 8 S.C.R.  Prem Prakash v. Union of India Through The Directorate of Enforcement overbearing and intimidatory methods and the like – not legal penalty for violation. So, the legal perils following upon refusal to answer, or answer truthfully, cannot be regarded as compulsion within the meaning of Article 20(3). The prospect of prosecution may lead to legal tension in the exercise of a constitutional right, but then, a stance of silence is running a calculated risk. On the other hand, if there is any mode of pressure, subtle or crude, mental or physical, direct or indirect, but sufficiently substantial, applied by the policeman for obtaining information from an accused strongly suggestive of guilt, it becomes ‘compelled testimony’, violative of Article 20(3).” (Emphasis supplied)

27. In the facts of the present case, we hold that the statement of the appellant if to be considered as incriminating against the maker, will be hit by Section 25 of the Evidence Act since he has given the statement whilst in judicial custody, pursuant to another proceeding instituted by the same Investigating Agency. Taken as he was from the judicial custody to record the statement, it will be a travesty of justice to render the statement admissible against the appellant.

28. The appellant accused cannot be told that after all while giving this statement:- “you were wearing a hat captioned ‘ECIR 5/2023’ and not the hat captioned ‘ECIR 4/2022’ ”.

29. A complete reading of Vijay Madanlal Choudhary (supra), particularly, paragraphs 159, 165 and 172 mandate us to ask ourselves the query: Is a reasonable inference legitimately possible that, due to the vulnerable position in which the appellant was placed and the dominating position in which the Investigating Agency was situated, in view of the arrest in the other proceeding that, there obtained a conducive atmosphere to obtain a confession? We certainly think so. The question is not whether it actually happened. The question is could it have been possible.

30. We are supported in this view by two old judgments of the Madras High Court. In Re Elukuri Seshapani Chetti (ILR 1937 Mad 358) Justice Mockett following the judgment of Justice Jackson In Kodangi V. Emperor (AIR 1932 Mad 24.) held as under:- 976 “In my judgment this is clearly a confession, as I have already said, and, as has been pointed out by Jackson J. In Kodangi V. Emperor (AIR 1932 Mad 24.) a confession made to the Police in the course of investigating crime A, although it relates to another crime B, is equally inadmissible. The whole spirit of section 25 of the Indian Evidence Act is to exclude confessions to the police and, the moment a statement is found to amount to a confession, I do not think it matters in the slightest of what crime it is said to be a confession.” (Emphasis supplied)

31. We feel that the principle laid down there on is applicable. In fact, the three-Judge Bench in Vijay Madanlal Choudhary (supra), in the para extracted hereinabove, expressly refers to Section 25 of the Evidence Act while dealing with statements recorded when the person is in custody.

32. We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker. The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind. It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice.

33. We also draw support from the way Section 50 is structured. Section 50 reads as under:- “Section 50. Powers of authorities regarding summons, production of documents and to give evidence, etc. (1) The Director shall, for the purposes of section 13, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:– (a) discovery and inspection; [2024] 8 S.C.R.  Prem Prakash v. Union of India Through The Directorate of Enforcement (b) enforcing the attendance of any person, including any officer of a reporting entity and examining him on oath; (c) compelling the production of records; (d) receiving evidence on affidavits; (e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). (5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act: Provided that an Assistant Director or a Deputy Director shall not– (a) impound any records without recording his reasons for so doing; or (b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the Joint Director.” 978 Section 50 (1)(b) speaks of enforcing the attendance of any person, Section 50 (2) speaks of the authorized officials having the power to summon any person whose attendance they consider necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under the Act. Section 50 (3) states that all persons so summoned shall be bound to attend in person or through authorized agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents and Section 50(4) states that every proceeding under sub-Sections (2) and (3) shall be deemed to be in judicial proceeding. A person in judicial custody being not a free person cannot be summoned and any statement to be recorded will be after obtaining the permission of the Court which has remanded him to the judicial custody in the other case.

34. In view of the above and keeping the salutary principle of Article 21 in mind, we hold that since the words ‘procedure established by law’ occurring in Article 21 has to be a reasonable and valid procedure, the statement of the appellant under Section 50 cannot be relied upon against the appellant in ECIR No. 5 of 2023 even though the appellant was at that point in custody in ECIR No. 4 of 2022. Statement of Afshar Ali – Co-accused

35. The appellant was not named in FIR No. 399 of 2023. It appears from the complaint of the respondent-Enforcement Directorate at para 6 that Afshar Ali, Saddam Hussain, Imtiaz Ahmad were arrested on 14.04.2023 in ECIR/RNZO/18/2022 though in the summary of the statements at para 8.12 it is mentioned that Afshar Ali was arrested on 14.04.2023 read with prayer (c) of the complaint it appears that the arrest that is referred to in para 8.12 is the arrest in ECIR/ RNZO/18/2022.

36. Accused Afshar Ali was arrested on 14.04.2023 in ECIR/RNZO/18/2022 (a different ECIR) and his statement was recorded on 17.04.2023 in the present ECIR. Afshar Ali is supposed to have stated that since he came to know that the land was under vigilance by the Police and the land had certain disputes. He met with the appellant and the appellant was informed about the disputes and the vigilance of the Police. According to the statement of Afshar Ali, the appellant took stock of the status of the land and called the then Deputy Commissioner – Chhavi Ranjan and told him that the registry of [2024] 8 S.C.R.  Prem Prakash v. Union of India Through The Directorate of Enforcement the Cheshire Home property was to be done after removing the vigilance observed by the Police. Thereafter, the appellant fixed the consideration of Rs. 1.5 crores and after accepting the consideration as fixed, he requested the appellant to arrange for unblocking the two plots of land, which were blocked by the Deputy Commissioner Office. That the appellant demanded Rs. 1 crore for the above work and the amount was adjusted in the said consideration and that it was appellant who asked to do the registration in the name of Punit Bhargava. He also stated that it was the appellant who fixed the deal with Bishnu Kumar Agarwal.

37. Being a co-accused with the appellant, his statement against the appellant assuming there is anything incriminating against the present appellant will not have the character of substantive evidence. The prosecution cannot start with such a statement to establish its case. We hold that, in such a situation, the law laid down under Section 30 of the Evidence Act by this Court while dealing with the confession of the co-accused will continue to apply. In Kashmira Singh vs. State of Madhya Pradesh [1952] SCR 526, this Court neatly summarized the principle as under:- “…. The proper way to approach a case of this kind is, first, to marshal the evidence against the accused excluding the confession altogether from consideration and see whether, if it is believed, a conviction could safely be based on it. If it is capable of belief independently of the confession, then of course it is not necessary to call the confession in aid. But cases may arise where the judge is not prepared to act on the other evidence as it stands even though, if believed, it would be sufficient to sustain a conviction. In such an event the judge may call in aid the confession and use it to lend assurance to the other evidence and thus fortify himself in believing what without the aid of the confession he would not be prepared to accept.” Hence, insofar as Afshar Ali’s statement is concerned, the Investigating Agency will have to first marshal the other evidence and can at best look at the statement for lending assurance. Independently, the statement of Afshar Ali does not prima facie indicate anything about the role of the appellant in the forgery of sale deed and other documents or being involved in the offence of money laundering. 980 Statement of Rajdeep Kumar

38. We have perused the statement, as summarized in the complaint, of Rajdeep Kumar. Rajdeep Kumar merely states that he worked for the appellant and has met Afshar Ali after the appellant introduced him at the house of the appellant regarding dealing of a land situated at Cheshire Home. He further states that he has met Saddam Hussain at the house of the appellant on the above stated land. He further adds that he has also seen Imtiaz Ahmed and Bharat Prasad, close associates of Afshar Ali and Saddam Hussain. Prima facie, we conclude that there is hardly any evidence to implicate the appellant for the offence under Section 3 and 4 of PMLA. Statement of Md. Saddam Hussain – Co-accused

39. Md. Saddam Hussain was arrested on 14.04.2023 also in ECIR/ RNZO/18/2022 (a different ECIR), in his statement of 26.04.2023, in the present ECIR he only speaks of knowing Rajdeep Kumar and meeting him for the purpose of unblocking a piece of land measuring 3.81 acres and about Rajdeep Kumar arranging a meeting with the then Deputy Commissioner – Chhavi Ranjan. His statement like that of Afshar Ali will not have the status of being a substantive evidence and will be of the same character as Afshar’s insofar as the co-accused are concerned. In the complaint, the prosecution infers that it was Rajdeep Kumar who was the link between the Deputy Commissioner, Chhavi Ranjan and Prem Prakash and who acted on the instructions of the appellant – Prem Prakash and helped Saddam Hussain for unblocking the land. Prima facie, in our opinion, this statement carries the case of the prosecution no further. The corroboration drawn from his further statement of 29.08.2023 recorded in judicial custody of the above statement adds nothing further to support the prosecution apart from the fact that the statement of 29.08.2023 lacked the character of substantive evidence. Statement of Punit Bhargava

40. Insofar as the statement of Punit Bhargava is concerned, it was recorded on 09.12.2022. He is supposed to have stated that he knew Bishnu Agarwal since March, 2021 when on the directions of appellant, he sold 1 acre of land to Bishnu Agarwal. He is supposed to have further stated that he had bought the piece of land under [2024] 8 S.C.R.  Prem Prakash v. Union of India Through The Directorate of Enforcement the supervision of Prem Prakash and that under the instructions of Prem Prakash, he acquired a land in his name and accordingly on the instructions of the appellant, he sold it to Bishnu Kumar Agarwal. He stated that on the directions of the appellant, he gave Rs. 25 lakhs to Rajesh Rai through cheque after which the registration and mutation of the property was done but, further added that six post- dated cheques were given for encashing the balance amount later. He is supposed to have stated further that he was not aware as to why rest of the payment was not made even after the registration and mutation and that appellant could perhaps, give a reply. On being asked as to why the property was purchased in his name when it was sold within two months to Bishnu Agarwal, he stated that it was only done on the instructions of Prem Prakash.

41. The statement mentions that apart from 25 lakhs, six post-dated cheques were also given. Thereafter, it only speaks of the appellant advising the purchase and sale of the land. Prima facie, they do not detract from the reasonable grounds of belief that we entertain to the effect that the appellant is not guilty of the offence under Section 3 and 4. Bishnu Kumar Agarwal (A9) on bail – Order has attained finality

42. We, prima facie, find that from the statements of the appellant and also from the other statements and other material relied upon by the investigating agency, there is nothing to indicate that the petitioner was involved in the creation of the forged deed nor had any knowledge of the forged sale deed of 1948. In the order enlarging Bishnu Kumar Agarwal on bail it was observed that-it was a plausible view to hold that Bishnu Kumar Agarwal was a bonafide purchaser of the property concerned in the present matter. It has also been held therein that no criminality could have been found against Bishnu Kumar Agarwal in the making of the sale consideration later and registration of the sale earlier. Support has been drawn from Section 54 of the Transfer of Property Act. The same order also makes a reference to para 10.6.6 of the complaint filed by the ED where it has been mentioned that the investigation of the Enforcement Directorate has revealed that complainant in FIR No. 399 of 2022, Umesh Kumar Gope was himself frivolously exerting his claim over the said property. Be that as it may, the order of bail granted to Bishnu Kumar Agarwal has attained finality. 982

43. Moreover, there is no material placed on record to show as to on what basis it is claimed that the beneficial interest in M/s Jamini Enterprises lies with the appellant. Hence, the statements relied upon do not prima facie make out a case of money laundering against the appellant.

44. The complaint also adverts to two other transactions with which Bishnu Kumar Agarwal is being investigated. Nothing can be elicited from the record about the involvement of the appellant and as to the initiation of any proceeding against him with regard to the other transactions with which Bishnu Kumar Agarwal is involved.

45. In this scenario, we hold that the appellant has satisfied the twin conditions under Section 45. Inasmuch as from the material on record, this Court is satisfied that there are reasonable grounds for believing that the appellant is not guilty of the offence of Money Laundering as alleged under Sections 3 and 4 of the PMLA and the Court is further satisfied that the appellant is not likely to commit any offence, if enlarged on bail. Arguments about criminal antecedents.

46. The Investigating Agency have also referred to ECIR No. 4 as a criminal antecedent. A reference was made to ECIR No. 4 of 2022 pertaining to illegal Stone Mining and related activities in Saheb Ganj, Jharkhand, where the petitioner was arrested on 25.08.2022 and the prosecution complaint was filed on 16.09.2022. Insofar as the bail pertaining to ECIR No. 4 of 2022, which is pending in this Court in SLP (Criminal) No. 691 of 2023, at the after notice stage, the merits of the bail in that case will be independently examined. Having examined the facts of the present case arising out of ECIR No. 5 of 2023 and in view of the findings recorded hereinabove, we do not think that the appellant can be denied bail based on the pendency of the other matter. We say so in the facts and circumstances of the present case as we do not find any justification for his continued detention. The appellant has already been in custody for over one year. The Trial is yet to commence. There is a reference to one more ECIR which the Investigating Agency refers to in their counter, namely, ECIR/RNZO/18/2022 but nothing is available from the record as to whether any proceedings have been taken against the appellant. [2024] 8 S.C.R.  Prem Prakash v. Union of India Through The Directorate of Enforcement Allegation of misuse of Jail facilities by the Appellant

47. Elaborate contentions have been made on the conduct of the appellant about certain facilities having been extended to him in jail. We do not comment on them and if at all there is any violation of the prison Rules, the Investigating Agency ought to take up with the higher officials of the Jail. On the facts of the present case, they are not reasons enough to deny the appellant his liberty.

48. For the reasons stated above, while allowing the appeal, we set aside the judgment dated 22.03.2024 of the High Court of Jharkhand at Ranchi in B.A. No. 9863 of 2023. We clarify that the observations made in this judgment are only for the purpose of disposing of the bail application and they shall not influence the Trial Court, which would proceed in accordance with law and on the basis of the evidence on record. Conclusion

49. In the result, we pass the following order:- (i) The appeal is allowed and impugned order dated 22.03.2024 is quashed and set aside. (ii) The Trial Court is directed to release the appellant on bail in connection with ED Case No. ECIR No. 5 of 2023 on furnishing bail bonds for a sum of Rs. 5 lakh with 2 sureties of the like amount. (iii) The appellant shall surrender his passport with the Trial Court and the appellant shall report to the Investigating Officer on every Monday and Thursday between 10 and 11 A.M. (iv) The appellant shall not make any attempt to influence the witnesses and tamper with the evidence. Pending applications shall stand disposed of. Result of the case: Appeal allowed. †Headnotes prepared by: Divya Pandey