Whether a statement made before ED under PMLA is binding on the accused without proof'as admission? Admissibility in Evidence?

In light of Prevention of money laundering act, statements made to certain officers are admissible in evidence.

The rules of evidence under the Prevention of Money Laundering Act are different from regular criminal law. Under the CrPC, the statements which are recorded by a police officer are not admissible as evidence, unless a part of that statement has led to the discovery of a material fact. The PMLA however has empowered some officers to record statements that are admissible in evidence.

Section 50 (2) has empowered certain officers to summon witnesses for the purpose of giving evidence or to produce documents. Under Section 50(3) It is stated that all such witnesses are bound to state the truth upon any subject for which they are being examined. In contrast, under the premise of ‘examination’ of witnesses by the police under Sections 161 and Section 162 of the CrPC, any statement which is recorded by a police officer cannot be relied on in court for any purpose. In fact, Section 162 of the Code of Criminal Procedure has put a bar against any such statement given to a police officer being signed by the witness.

 

To understand the proposition reference may be made to the following cases:

Case: Badku Joti Savant Vs State of Mysore

https://indiankanoon.org/doc/32824/

MANU/SC/0276/1966

Facts: The appellant who had been arrested and interrogated in connection with the recovery from his house of contraband gold had been convicted by the Magistrate but acquitted by the Sessions Judge. The State went in appeal to the High Court which considered the evidence and relying on the statement made by the appellant to the Deputy Superintendent of Customs and Excise held that the appellant was guilty. One of the contentions raised in the appeal before the Supreme Court was whether the statement made by the appellant to the Deputy Superintendent of Customs and Excise who has the powers of an Officer in charge of a Police Station was admissible in evidence within the meaning of Section 25 of the Indian Evidence Act (No. 1 of 1872).

Held:

  • The Apex Court was of the opinion that for the purposes of inquiry under section 21 a central excise officer shall have the powers of an officer in charge of a police station when such officer is investigating a cognizable crime. However, these powers do not include the power to submit a charge sheet under section 173 of the Cr.P.C.
  • It is pertinent to note that a central excise officer is not a police officer. The court stated that mere conferment of powers under section 9 of the Act does not make a central excise officer a police officer. If the case was so then every officer entrusted with investigation under section 202 of Cr.P.C would become a Police Officer.
  • Further, the court observed that any statement made before a central excise officer is admissible in evidence and would not be hit by section 25, such statement shall also be admissible in evidence unless the appellant can take advantage of section 24.  

Case: A. Tajudeen Vs. Union of India (UOI)

https://indiankanoon.org/doc/128211521/

MANU/SC/0903/2014

Facts:

Present appeal filed against order whereby High court set aside order of Appellate Board whereby Appellate Board quashed direction pertaining to confiscation of money seized from residence of Appellant and also directed to refund of penalty imposed on Appellant

Held:

  • In the aforementioned case the Supreme Court of India observed the innocence of the Appellant will have to be determined on the basis of the statements made by the Appellant and his wife to the officers of the ED. They are to be treated as Primary Evidence to establish the guilt of the Appellant.
  • Further, it is important to note that the statements in question were made at the time of the raid/in the custody of the ED officials. These statements were later retracted by the Appellant and his wife. In such cases it is important to determine the veracity and reliability of such statements. The Appellant and his wife have retracted the above statements while stating that they were made under coercion and would not be binding on them.
  • Such statements should not be readily accepted unless there is independent corroboration of certain material facts of the said statements through independent sources. The corroboration required would depend from case to case.

 

K.T.M.S. Mohd. and Anr. Vss. Union of India

https://indiankanoon.org/doc/1059883/

MANU/SC/0349/1992 : (1992) 3 SCC 178

  • The Apex Court was of the opinion that it is sin quo non to act on any statement which is voluntarily given to the ED or custom authorities. If they appear to have been obtained from inducement, threat, coercion or by any improper means then that statement must be rejected.

 

  • Further, it is important to note that merely because a statement was retracted, it cannot be said to have been involuntary or unlawfully obtained.
  • The onus to prove coercion is on the person who makes any such claim, even if the appellant cannot establish coercion, it is up to the authorities or any court intending to act upon the statement to show it was obtained voluntarily.

Telestar Travels Pvt. Ltd. and Ors. vs. Special Director of Enforcement

https://indiankanoon.org/doc/105661741/

MANU/SC/0154/2013

  • In light of K.T.M.S. Mohd. v. Union of India MANU/SC/0349/1992 : (1992) 3 SCC 178, K.I. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, Cochin MANU/SC/2070/1997 : (1997) 3 SCC 721 the court held that retracted statements could furnish a sound basis for recording a finding against the party making the statement.
  • There is, in that view, no gainsaying that the Adjudicating Authority and the Appellate Tribunal have both correctly appreciated the legal position and applied the same to the case at hand, while holding that the statements were voluntary and, therefore, binding upon the Appellants.

Conclusion:

From the above, it is clear that the statements before the Enforcement Department (ED) under PMLA, are admissible against the accused in the courts of law. Further, even of the statement made before the ED is retracted, the same will not automatically become in-admissible.

By

Vijay Pal Dalmia, Advocate

Supreme Court of India

Mobile: +91 9810081079

Email: vpdalmia@gmail.com

 

and

Adeem Ahmed

LL.B. 5th Year, Amity Law School Noida, India

adeemahmedlegal@gmail.com

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