Case Note & Summary
The application arose from allegations against a former Home Minister of Maharashtra. On 20 March 2021, the then Commissioner of Police wrote a letter to the Chief Minister alleging abuse of position and powers to seek illegal monetary benefits. This led to writ petitions and a preliminary enquiry. Writ Petition No.1541 of 2021 was filed by Dr. Jayashree Patil, and Public Interest Litigation No.6 of 2021 was filed by the Commissioner of Police on 24 March 2021 seeking a CBI investigation. The Bombay High Court by order dated 5 April 2021 directed a preliminary enquiry to be completed within fifteen days, with liberty to the CBI to decide further action. The Supreme Court dismissed the applicant's special leave petition against that order on 8 April 2021. The CBI registered FIR No.RC2232021A0003 on 21 April 2021 under Section 7 of the Prevention of Corruption Act, 1988 and Section 120-B of the Indian Penal Code. The applicant's writ petition to quash the FIR was dismissed by the Bombay High Court on 22 July 2021, and the Supreme Court rejected the special leave petition on 18 August 2021.
Thereafter, the Directorate of Enforcement registered ECIR/MBZO-I/66/2021 against the applicant under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002. A search was conducted at the residence of the applicant and his son on 25 June 2021. Summonses were issued to the applicant on 25 June 2021, 28 June 2021, 2 July 2021, 30 July 2021, and 16 August 2021. The applicant sent authorized representatives with written replies instead of appearing in person. Summonses were also issued to the applicant's wife on 12 July 2021 and to his son on 25 July 2021, who responded through representatives or email. A provisional attachment order was issued on 16 July 2021. The applicant and his son filed Writ Petition (Cri.) No.282/2021 in the Supreme Court challenging the constitutional validity of various PMLA provisions. On 16 August 2021, the Supreme Court directed that the writ petition be listed along with matters raising identical legal issues and observed that the petitioners could take recourse to appropriate remedies under the Code of Criminal Procedure, 1973, including a quashing petition in the High Court. The fifth summons was issued the same day, and the authorized representative appeared requesting time.
In this factual background, the applicant approached the Bombay High Court by filing Criminal Application No.625 of 2021 seeking multiple reliefs. The primary reliefs included quashing of the summonses dated 25.06.2021, 28.06.2021, 30.07.2021 and 16.08.2021; restraining the respondents from taking penal or coercive action under Section 19 PMLA; directing compliance with Section 50(2) and 50(3) PMLA and permitting appearance through authorized representative and electronic mode; directing the respondents to act in accordance with Section 41A CrPC and the guidelines in Arnesh Kumar v. State of Bihar; directing audio-video recording of statements; and entrusting the investigation to a Special Investigating Team. Respondent Nos.1 and 2 filed a preliminary reply. The court heard the matter at length through video conferencing.
The court noted that since the applicant had already approached the Supreme Court in Writ Petition (Cri.) No.282/2021, the question arose regarding the scope of proceedings before the High Court. The court set out the prayers in the pending Supreme Court writ petition, which challenged the constitutional validity of provisions including Section 45 PMLA twin conditions, the cognizable nature of PMLA offences, and the Explanation to Section 3 PMLA. The provided excerpt of the judgment does not contain the court's final analysis or decision. Therefore, the final outcome, ratio decidendi, and operative directions are not mentioned in the available text.
Issue of Consideration
The main question of law considered by the court was the scope of proceedings before the High Court when a writ petition challenging the constitutional validity of PMLA provisions is already pending before the Supreme Court.
Law Points
- Section 50 PMLA empowers authority to summon persons
- Section 50(3) PMLA permits attendance through authorized agents as directed
- arrest under Section 19 PMLA must comply with Section 41A CrPC and Arnesh Kumar guidelines
- twin conditions under Section 45 PMLA struck down in Nikesh Tarachand Shah
- Explanation to Section 45 PMLA inserted by Finance Act 2019 deems offences cognizable
- Explanation (i) to Section 3 PMLA inserted by Finance Act 2019 changes disjunctive to conjunctive
- investigation under PMLA challenged as non-cognizable without Magistrate order under Section 155 CrPC
Case Details
2021 LawText (BOM) (10) 58
Criminal Application No. 625 of 2021
Nitin Jamdar, Sarang V. Kotwal
Vikram Choudhary, Ashok Mundargi, Inderpal B. Singh, Aniket Ujjwal Nikam, Harpreet Singh J. Purewal, Tushar Mehta, Aman Lekhi, Anil C. Singh, Zoheb Hossian, Kanu Agarwal, Vivek Gumani, Aditya Thakkar, Ujjwal Sinha, Aniket Seth, Ritwiz Rishabh, Kr.Kunwar Aditya Singh, D.P.Singh, J.P. Yagnik
Shri Anil Vasantrao Deshmukh
1. Directorate of Enforcement, 2. Assistant Director, Directorate of Enforcement, 3. State of Maharashtra
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Nature of Litigation
Criminal application before Bombay High Court seeking quashing of summons issued by Enforcement Directorate under Section 50 PMLA and other restraints.
Remedy Sought
Applicant sought quashing of summonses dated 25.06.2021, 28.06.2021, 30.07.2021 and 16.08.2021; restrain respondents from penal/coercive action under Section 19 PMLA; permit appearance through authorized representative and electronic mode; direct audio-video recording; entrust investigation to SIT.
Filing Reason
Applicant was summoned by Enforcement Directorate in ECIR/MBZO-I/66/2021 and sought to challenge the summons and prevent coercive action.
Previous Decisions
CBI registered FIR on 21 April 2021; Bombay High Court dismissed writ petition to quash FIR on 22 July 2021; Supreme Court rejected SLP on 18 August 2021; Supreme Court on 16 August 2021 in Writ Petition (Cri.) No.282/2021 directed listing with identical matters and observed petitioner could seek appropriate remedies including quashing petition in High Court.
Issues
Whether the Bombay High Court should entertain the application when a writ petition challenging validity of PMLA provisions is pending before Supreme Court.
Whether summonses issued under Section 50 PMLA to the applicant should be quashed for requiring personal appearance instead of authorized representative.
Whether penal/coercive action under Section 19 PMLA should be restrained.
Whether compliance with Section 50(2) & (3) PMLA permits appearance through authorized representative and electronic mode.
Whether powers under Section 50(3) PMLA are discretionary and must be exercised objectively.
Whether arrest should be subject to Section 41A CrPC and Arnesh Kumar guidelines.
Whether investigation should be transferred to SIT and audio-video recording directed.
Submissions/Arguments
Applicant argued that summons should be set aside because he was entitled to appear through authorized representative and not be compelled to personal appearance under Section 50 PMLA.
Applicant argued that the Directorate should comply with Section 41A CrPC and Arnesh Kumar v. State of Bihar before any arrest.
Applicant argued that the twin conditions under Section 45 PMLA are unconstitutional following Nikesh Tarachand Shah.
Applicant argued that investigation proceedings should be audio-videographed in presence of lawyer and transferred to SIT.
Respondents filed a preliminary reply; arguments were heard at length.
Judgment Excerpts
The Applicant has filed this criminal application for various reliefs, primarily pertaining to the summons issued by the Respondent-Directorate of Enforcement under section 50 of the Prevention of Money Laundering Act, 2002.
Since the Applicant through Writ Petition (Cri.) No.282/2021 has already approached the Supreme Court, and the petition is pending, the question that arises is regarding the scope of proceedings before us.
Respondent No.2 issued a summons to the Applicant on 25 June 2021, requiring him to remain present on the date assigned.
Procedural History
On 20 March 2021, then Commissioner of Police Param Bir Singh wrote a letter to the Chief Minister alleging abuse of position by the applicant. Writ Petition No.1541 of 2021 was filed by Dr. Jayashree Patil, and Public Interest Litigation No.6 of 2021 was filed by Param Bir Singh on 24 March 2021 seeking CBI investigation. Bombay High Court by order dated 5 April 2021 directed preliminary enquiry within 15 days. Supreme Court dismissed SLP (Criminal) Diary No.9414/2021 on 8 April 2021. CBI registered FIR No.RC2232021A0003 on 21 April 2021 under Section 7 of Prevention of Corruption Act and Section 120-B IPC. Applicant's Criminal Writ Petition No.1904/2021 to quash FIR was dismissed on 22 July 2021. Supreme Court rejected SLP on 18 August 2021. Directorate of Enforcement registered ECIR/MBZO-I/66/2021 under Section 3 read with Section 4 PMLA. Search was conducted on 25 June 2021. Summonses were issued to applicant on 25 June 2021, 28 June 2021, 2 July 2021, 30 July 2021, and 16 August 2021; applicant sent authorized representatives. Summonses to wife on 12 July 2021 and son on 25 July 2021; replies sent. Provisional attachment order issued on 16 July 2021. Applicant and son filed Writ Petition (Cri.) No.282/2021 in Supreme Court challenging PMLA provisions. On 16 August 2021, Supreme Court directed listing with identical matters and permitted recourse to remedies including quashing petition in High Court. Fifth summons issued on 16 August 2021; authorized representative appeared requesting time. Applicant filed Criminal Application No.625 of 2021 in Bombay High Court.
Acts & Sections
- Prevention of Money Laundering Act, 2002: Section 3, Section 4, Section 19, Section 45, Section 45(1), Section 50, Section 50(2), Section 50(3), Explanation (i) to Section 3, Explanation to Section 45(2)
- Prevention of Corruption Act, 1988: Section 7
- Indian Penal Code, 1860: Section 120-B
- Code of Criminal Procedure, 1973: Section 41A, Section 154, Section 155, Section 156, Section 157, Section 172
- Finance Act, 2018: Section 208(e)(i)
- Finance Act, 2019: Section 200
- Finance (No.2) Act, 2019: Section 193
- Constitution of India: Article 14, Article 21
