Undue Process: Here's What's Wrong With the Supreme Court's PMLA Judgment

By upholding self-Incrimination and the presumption of guilt, the bench has put the personal liberty of citizens at risk.

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“They say that Justice is a Queen—
 A Queen of awful Majesty—
Yet in the papers I have seen
 Some things that puzzle me.–”

∼ The Majesty of Justice by Lewis Carroll

Like birthdays and ‘un’birthdays that Humpty Dumpty speaks of to Alice (in Wonderland), it seems that there are to be safeguards and ‘un’safeguards in criminal prosecution.

Serious crime can be prosecuted only by the state, and may entail imprisonment of the accused during and after the process. Safeguards have therefore been devised in order that state power, wielded by fallible women and men, does not run amuck when personal liberty is at stake. These are time-honoured norms of criminal justice or due process.

Presumption of innocence and the right to silence are not “mere procedure”. They are vital rights affecting life and liberty. Yet, in the recent judgment delivered by the Supreme Court in the batch of petitions titled Vijay Madanlal Chaudhry vs Union of India, a pervasive if unspoken “mere” seems to qualify vital due process. A view, as it were, that due process is dispensable in the pursuit of legislative policy

Under the Prevention of Money Laundering Act, 2002 (PMLA) there is a presumption of guilt against the accused. Section 24 of PMLA, which places on the accused the burden of proving their innocence, was challenged as violating the right to life, liberty and fair procedure guaranteed by Articles 21 and 14 of the constitution in the Vijay Madanlal  batch of cases.

The Supreme Court rejected the challenge. “Although a human right,” says the court, presumption of innocence is “nothing but a rule of evidence, which the legislature can do away with.

Presumption of guilt, without foundational facts

Statutory presumptions of guilt are not unknown, but they are rare and arise only upon proof of other foundational facts. For example, a provision that if contraband is recovered from the possession of a person, it will be presumed that he intended the same for crime. The state will have to prove first that contraband was recovered as a foundational fact, before a presumption against that person can be drawn.  A blank declaration that the accused shall be simply presumed guilty, as Section 24 PMLA makes, is unheard of.

Watch | Supreme Court Order Upholding PMLA Amendments Has Major Flaws: Justice Lokur

Of concern is not just the conclusion of the Supreme Court but also the manner that it is arrived at, with nary a word on whether a presumption against the accused, without foundational facts, is at all reasonable, fair and just.

But such an assessment is necessary when a law is challenged as violating Articles 21 and 14 of the constitution. If the words and intent of parliament should suffice, what remains to be judged by the court? It would amount to making constitutional imperatives subject to statutory purpose rather than the other way around.

This is not the first time that due process has been abridged by the Supreme Court in deference to what parliament considers expedient. But there is something to be learnt from history.

History of personal liberty is the history of procedural safeguards

In Kartar Singh v State of Punjab (1994) the constitution bench upheld Section 15 of the Terrorist and Disruptive Activities (Prevention) Act, 1987 (TADA) by a majority of 3:2,  but not quite so perfunctorily as we see today.

Section 15 of TADA allowed  confessions recorded by a Superintendent of Police as evidence, thus unsettling a century-old rule barring confessions to police officers. Though it declared that this provision was validly passed by parliament in “the exigencies of certain situations,” the majority judgment noted that police brutality was rampant.

It appraised the safeguards in Section 15 and prescribed several of its own that included a mandatory production of the maker of the confession before a judicial magistrate within 48 hours of recording it, so that any complaint of duress or ill use could be made, and a remand to judicial custody thereafter.

The minority judgment in Kartar Singh held that due process is not in thrall to “policy or rationale or object of the Act”. And that “mere law is not sufficient. It must be fair and just law”.

In urging that Section 15 of TADA be struck down, the minority judgment observed that[T]the history of personal liberty is largely the history of procedural safeguards”. The minority view in Kartar Singh was  remarkably prescient.

In time, numerous instances of forced confessions and unjustified detentions came to light. In the face of this gross abuse of the law, TADA was allowed to lapse in 1995.

Its successor, the Prevention of Terrorism Act (POTA), brought as an ordinance in 2001 and enacted in March 2002, contained Section 32, which was similar to Section 15 of TADA but spared the co-accused from its effect. The safeguards prescribed by the majority in Kartar Singh were added.

In the parliament attack case, NCT v Navjot Sandhu (2005), the Supreme Court discarded as involuntary, the ‘confessions’ of Afzal and Shaukat recorded by the deputy commissioner of police. The court also expressed doubts on the wisdom of empowering policemen, whatever their rank, to record confessions.

Also read: PMLA Ruling Signals That Focus on Due Process Is Urgent Priority

POTA, too, was repealed in 2004 in the wake of unmistakable evidence of abuse. Simultaneously, the Unlawful Activities (Prevention) Act (UAPA)  was amended to incorporate some of POTA’s provisions but without the dreaded clause permitting  evidence of self-incriminatory statements recorded by a police official.

Of course, some laws, like the Maharashtra Control of Organised Crime Act, 1999 (MCOCA), still retain such a provision. Nevertheless, there has been serious disquiet in the judiciary about self-incrimination recorded in the course of investigation.

Compelled self-incrimination under Section 50, PMLA

‘Give your evidence,’ said the King; `and don’t be nervous, or I’ll have you executed on the spot.’
Alice in Wonderland, Lewis Carroll

We have seen that the statutory scheme distrusts confessions to the police, and even when deviations were made, in special laws, at least a notional right to silence was incorporated. Even so, confessions to police officers were found to be suspect.

Yet the PMLA provides for a statement to be recorded under Section 50, by innocuously terming it a judicial proceeding though it is done by Enforcement Directorate (ED) officials, who may later lodge a criminal case against the person for what the statement reveals.

Section 50 of the PMLA allows ED officers to summon anyone, compel their statements on oath and prosecute them if the statement is refused or not in accord with what the ED thinks is right. There is no right of silence, no scope for volition, and no direction about the manner of the use of such statements in a criminal prosecution or as to their evidentiary status.

No doubts seem to have assailed the Supreme Court before upholding the validity of Section 50, PMLA. Institutional memory of the abuse of the power conferred on prosecuting agencies to record confessions and judicial ruminations on the unwisdom of such power eludes the Vijay Madanlal Chaudhry judgment.

Coercion inheres in the very act of official interrogation, as many judgments recognise. Disquiet over self-incrimination during interrogation stems from this fact.

In 1855, the Madras Torture Commission was set up to address widespread allegations of torture by the East India Company. From then until today, the excesses of investigative agencies and forced confessions have been an unceasing concern.

The Madras Torture Commission was followed by a spate of laws that prohibited  the use in a criminal trial of  any statement recorded by the investigator, whether of a witness or of the accused,  though interrogation or investigation was not curtailed.

Also read: With Low Conviction Rate, ED Is Nothing More Than a Caged Parrot That Can’t Get Anyone to Sing

Sections 161(2) and 162 CrPC, and Sections 25 and 26 of the Evidence Act further the rule against compelled self-incrimination that is found in Article 20(3) of the constitution and are viewed as essential due process. Deviations from these wise rules in special laws have always resulted in misuse. Not too long ago, two different agencies recorded MCOCA confessions in two different trials of two different sets of accused persons, both sets “confessing” to the same acts of crime!

The recent judgment in Vijay Madanlal holds that the PMLA is a “sui generis” amalgam of penal and adjudicatory mechanisms for confiscation of proceeds of crime and is not a pure penal law. It holds also that ED officers may investigate an offence or conduct an inquiry to confiscate property or do both but  cannot be treated as the police. Upon this view the judgment exempts the PMLA from the normal standards of criminal procedure.

But other penal statutes too have a mechanism to confiscate proceeds of crime and property used in crime, notably the UAPA and NDPS (Narcotic Drugs and Psychotropic Substances Act). Still, they are amenable to the norms of criminal justice. Why the court should consider PMLA exempt is unclear.

Moreover, as officers empowered to record statements and prosecute, ED officials are in a position to extort confessions, present a complaint, arrest an accused, oppose bail and argue for conviction and imprisonment that may extend to seven or sometimes 10 years. Therefore, it should have been  obvious that those prosecuted by the ED ought to have the protections in the CrPC and Evidence Act.

An earlier three judge ruling of the Supreme Court in Tofan Singh v State of Tamil Nadu (2021) was that such powers would make an official akin to a policeman, whatever designation or nomenclature he or she may be known by. Tofan Singh held that a statement recorded by the Narcotics Control Bureau under Section 67 of the NDPS Act would be covered by the prohibitions that statements recorded by the police are subject to. The Vijay Madanlal judgment’s reading of Tofan Singh is less than complete.

The PMLA has a schedule listing various statutes. An offence under any listed statute is a scheduled offence for the PMLA. The ED’s role is derived entirely from the commission of a scheduled offence, which must be investigated by other agencies. Scheduled offences range from the non-cognizable to those carrying death. So the PMLA and the ED’s powers are premised on such criminal offences, the proceeds of which the ED can investigate and prosecute.

So, the fact that the ED can and does launch criminal prosecutions which affect or are affected  by other criminal prosecutions cannot be glossed over. Safeguards for the accused in criminal law are needed if and when the ED does choose to prosecute.

The recent judgment returns an ambiguous answer on this point which is hard to reconcile with the constitution, statute and precedent.

ED – not the police and yet the police

Having declared that the ED does not “investigate” in the sense used in the CrPC and  that its officers are not police officers, the judgment  observes that  if recorded by the ED  after “formal arrest”  the prohibition against statements to the police contained in  Section 25 Evidence Act may apply to the statement under Section 50, on a  case to case basis, “Section 25 Evidence Act being rule of evidence” (sic).

What does this mean? The ED may or may not be “police” as chance dictates? Section 25 Evidence Act is a comprehensive principle that either applies wholly or not at all. It bars the use of any statement made to a police officer against any person accused of an offence. It is not necessary that the person making the statement should be an accused on that day or that he or she should be in in custody. It cannot be used against the maker or anyone else if any of them is accused of any offence even subsequently.

Section 25 has nothing to do with arrest or custody. Again, it is hard to see by what rule of interpretation its application to PMLA has  been made conditional upon arrest in the recent judgment, and qualified with an indeterminate “may” to be applied on a case to case basis.

Section 25, Evidence Act is no mere rule of evidence but a facet of the right to life under Article 21 of the constitution, so say many judgements including those by the constitution bench.

A regular court holding trial can compel a witness to return an answer even though it may incriminate, but the witness cannot, thereafter be prosecuted for the crime so disclosed in the evidence.

In this scheme of things the ED seems to stand apart, acting as judge, prosecutor or police whimsically. One is tempted to paraphrase Cassius (Julius Caesar) and ask, “Upon what meat doth this, our ED feed that it is grown so great?”

Arrest or no arrest, police or no police, Section 24 of the Evidence Act bars any confession born of compulsion, especially if the compulsion proceeds from a person in authority. Section 50, PMLA is a text book example of such compulsion.

These ambiguities will operate within a medley of vague definitions of money laundering and proceeds of crime. An interminable sequence is set in motion of “proceeds of crime” arising from the scheduled offence, extending to anything  or anyone that they may touch.

The accused may or not be given the ECIR (a complaint that the ED registers, termed an internal document by the court), but still can be prosecuted. The ED may search places and people first, record their statements on oath (Section 17) and arrest them even before a scheduled offence is registered.

If ultimately there is a discharge or acquittal in the scheduled offence, the PMLA will mercifully stop. Until then a PMLA accused is presumed guilty with near impossible bail conditions.

To quote a fascinating conversation between the Queen and Alice in Carroll’s Through the Looking Glass:

`What sort of things do YOU remember best?’ Alice ventured to ask.

Oh, the things that happened the week after next,’ the Queen replied in a careless tone. ‘For instance…there’s the King’s Messenger. He’s in prison now, being punished: and the trial doesn’t even begin till next Wednesday: and of course the crime comes last of all.’

Suppose he never commits the crime?said Alice.

That would be all the better, wouldn’t it?’ the Queen said.

Nitya Ramakrishnan is a lawyer.