Our conclusion, therefore, is that the Special Court
established under the Act is a court of exclusive jurisdiction.
Sections 6 and 7 confer on that court wide powers. It is a
court of original criminal jurisdiction and has all the powers of
such a court under the Code including those of Sections 306 to
308.”
A Three Judge Bench of the Apex Court in the case of HARSHAD S.MEHTA followed the judgment in the case of A.R.ANTULAY (supra) to hold, if a Special Court is created under the provisions of a special enactment, the proceedings falling under that enactment shall be held only before the Special Court. For this purpose the Apex Court holds that the Special Court enjoys all the powers of the court of original jurisdiction and it holds a dual capacity and powers of both the Magistrate and the Court of Session depending upon the stage of the case.
13. In the light of the statutory frame work of the PMLA and
the application filed under Section 50 of the Act, this Court is of the considered view that the application was not maintainable before the learned Magistrate, since the Court did not have the power to direct recording of statements for it to become a record under the PMLA, the order which is passed by the Court which did not have a jurisdiction to even consider any application under the PMLA, is rendered unsustainable. There can be no qualm about the principles laid down in the judgment rendered in the case of NIRANJAN SINGH (supra) relied on by the learned counsel representing the ED to mean what is custody, but the judgment is inapplicable to the facts of the case at hand as it does not deal with issues concerning jurisdiction. Therefore, in view of the preceding analysis, the order passed on the application by the learned Magistrate requires appropriate interference and is to be consequently obliterated. {Para 62}
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
WRIT PETITION No.19042 OF 2022 (GM-RES)
HARSHA D., S/O LATE DODDANANJAIHA Vs STATE BY HIGH GROUND POLICE STATION
Coram: MR. JUSTICE M. NAGAPRASANNA
DATED: 17TH DAY OF OCTOBER, 2022
The petitioner is before this Court calling in question order
dated 14-09-2022 passed by the I Additional Chief Metropolitan
Magistrate, Bengaluru in C.C.No.25035 of 2022 in a case
concerning offences punishable under Sections 34, 120B, 420, 465,
468 and 471 of the IPC.
2. Heard Sri Sandesh J.Chouta, learned senior counsel
appearing for the petitioner, K.S. Abhijith, learned High Court
Government Pleader for respondents 1 and 2 and Sri Madhukar
Deshpande, learned Special Public Prosecutor appearing for
respondent No.3.
3. Shorn of details, the facts in brief, are as follows:-
A crime comes to be registered in Crime No.48 of 2022 before
the Chowk Police Station, Kalaburagi in which the petitioner is one
of the accused. The same is transferred to the 2nd respondent, the
Investigating Agency. Another crime comes to be registered in
Crime No.60 of 2022 before the High Grounds Police Station against
34 persons in which petitioner is accused No.29. The latter crime
was registered during the time when the earlier crime was under
investigation. On 26.07.2022 the police filed charge sheet in Crime
No.60 of 2022. The petitioner throughout has been in prison either
concerning crime No.48 of 2022 or crime No.60 of 2022.
4. The issue in the case at hand is not with regard to merits
of the matter concerning either of the crimes. What drives the
petitioner to this Court is that on 30-08-2022 the 3rd respondent/
Directorate of Enforcement (‘ED’ for short) files an application under
Section 50(3) of the Prevention of Money Laundering Act, 2002
(‘the PMLA’ for short) before the concerned Court i.e., the learned
Magistrate in C.C.No.25035 of 2022 seeking permission to record
written statement of five accused including the petitioner who are in
judicial custody and to allow two officers of the ED with a laptop
and a printer for the purpose of recording the statements and also
sought a direction to the Jail Authorities to cooperate for recording
of such statements. The petitioner filed his objections to the said
application on 05-09-2022. The learned Magistrate considering
both the application and the objection filed, allows the application
and permits the ED to record the statements as was sought for in
the application. It is this order of the learned Magistrate that drives
the petitioner to this Court.
5. The learned senior counsel Sri Sandesh J.Chouta,
appearing for the petitioner would contend that once an
Enforcement Case Information Report in ECIR
No.ECIR/BGZO/68/2022 (for short ‘ECIR’) is registered all actions
and any permission that is to be sought has to be before the
Sessions Court as the competent Court or the designated Court to
permit such application would only be the Special Court and the
Special Court is the Sessions Court. The learned Magistrate could
not have permitted recording of statement by his order, as the
order is one without jurisdiction. He would place reliance upon the
judgment of the co-ordinate Bench of this Court in DR.
MADHUKAR G.ANGUR v. ENFORCEMENT OF DIRECTORATE –
Criminal Petition No.1189 of 2022 decided on 30th March,
2022, the judgment of the Apex Court in the case of HARSHAD
S.MEHTA v. STATE OF MAHARASHTRA – (2001)8 SCC 257 and
the judgment of the Apex Court in A.R.ANTULAY v. R.S.NAYAK –
AIR 1988 SC 1531 to buttress his submission.
6. On the other hand, the learned counsel representing ED
Mr. Madhukar Deshpande would refute the submissions to contend
that no doubt proceedings or trial will have to be conducted by the
designated Court, but the petitioner could not have been
summoned by the ED for recording of the statement after
registration of the crime as he is in judicial custody in C.C.No.25035
of 2022. Once he is in custody of the Court, an application has to
be moved before the Court concerned which has passed order of
judicial custody. Therefore, no fault can be found in the order
passed by the learned Magistrate in permitting the ED to record
statement of the petitioner and would rely on a judgment in the
case of NIRANJAN SINGH v. PRABHAKAR RAJARAM KHAROTE
– (1980) 2 SCC 559 wherein the Apex Court considers what would
be the meaning of custody, to buttress his submission.
7. I have given my anxious consideration to the submissions
made by the respective learned counsel and perused the material
on record.
8. Before embarking upon the consideration of respective
contentions on merit, I deem it appropriate to notice the statutory
frame work 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. It is not in dispute that an ECIR is filed against the
petitioner and it is in furtherance of the said registration of the
crime, statements of the petitioner are sought to be recorded by
the respondent/ED to consider whether there is an offence made
out against the petitioner for offences punishable under the PMLA.
Now PMLA would mean offences punishable under Chapter II which
deals with offence of money laundering. Chapter-II encompasses
within itself Sections 3 and 4 of the PMLA. Sections 3 and 4 thereof
read as follows:
“3. Offence of money-laundering.—Whosoever
directly or indirectly attempts to indulge or knowingly assists
or knowingly is a party or is actually involved in any process or
activity connected with the proceeds of crime including its
concealment, possession, acquisition or use and projecting or
claiming it as untainted property shall be guilty of offence of
money-laundering.
Explanation.—For the removal of doubts, it is hereby
clarified that,—
(i) a person shall be guilty of offence of moneylaundering
if such person is found to have directly or
indirectly attempted to indulge or knowingly assisted
or knowingly is a party or is actually involved in one or
more of the following processes or activities connected
with proceeds of crime, namely—
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property, in any manner whatsoever;
(ii) the process or activity connected with proceeds of
crime is a continuing activity and continues till such
time a person is directly or indirectly enjoying the
proceeds of crime by its concealment or possession or
acquisition or use or projecting it as untainted
property or claiming it as untainted property in any
manner whatsoever.
4. Punishment for money-laundering.—Whoever
commits the offence of money-laundering shall be punishable
with rigorous imprisonment for a term which shall not be less
than three years but which may extend to seven years and
shall also be liable to fine:
Provided that where the proceeds of crime involved in
money-laundering relates to any offence specified under
paragraph 2 of Part A of the Schedule, the provisions of this
section shall have effect as if for the words “which may extend
to seven years”, the words “which may extend to ten years”
had been substituted.”
It is to unearth whether the petitioner has indulged himself in acts
that would become punishable under the aforesaid provisions of the
PMLA an ECIR is registered. Section 43 of the PMLA reads as
follows:
“43. Special Courts.—(1) The Central Government,
in consultation with the Chief Justice of the High Court,
shall, for trial of offence punishable under Section 4, by
notification, designate, one or more Courts of Session as
Special Court or Special Courts for such area or areas or
for such case or class or group of cases as may be
specified in the notification.
Explanation.—In this sub-section, “High Court” means
the High Court of the State in which a Sessions Court
designated as Special Court was functioning immediately
before such designation.
(2) While trying an offence under this Act, a Special
Court shall also try an offence, other than an offence referred
to in sub-section (1), with which the accused may, under the
Code of Criminal Procedure, 1973 (2 of 1974), be charged at
the same trial.”
(Emphasis supplied)
Section 43 directs constitution of a Special Court or a designated
Court and such Court to be the Court of Session. Therefore, in
terms of Section 43 for trying the offence punishable under the
PMLA designated Court is the Court of Session. Section 44 of the
PMLA reads as follows:
“44. Offences triable by Special Courts.—(1)
Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974),—
(a) an offence punishable under Section 4 and any
scheduled offence connected to the offence under
that section shall be triable by the Special Court
constituted for the area in which the offence has
been committed:
Provided that the Special Court, trying a
scheduled offence before the commencement of
this Act, shall continue to try such scheduled
offence; or
(b) a Special Court may, upon a complaint made by
an authority authorised in this behalf under this
Act take cognizance of offence under Section 3,
without the accused being committed to it for
trial:
Provided that after conclusion of investigation, if
no offence of money laundering is made out
requiring filing of such complaint, the said
authority shall submit a closure report before the
Special Court; or
(c) if the court which has taken cognizance of the
scheduled offence is other than the Special Court
which has taken cognizance of the complaint of
the offence of money-laundering under subclause
(b), it shall, on an application by the
authority authorised to file a complaint under this
Act, commit the case relating to the scheduled
offence to the Special Court and the Special Court
shall, on receipt of such case proceed to deal with
it from the stage at which it is committed.
(d) a Special Court while trying the scheduled offence
or the offence of money-laundering shall hold trial
in accordance with the provisions of the Code of
Criminal Procedure, 1973 (2 of 1974), as it
applies to a trial before a Court of Session.
Explanation.—For the removal of doubts, it is clarified
that,—
(i) the jurisdiction of the Special Court while dealing
with the offence under this Act, during
investigation, enquiry or trial under this Act, shall
not be dependent upon any orders passed in
respect of the scheduled offence, and the trial of
both sets of offences by the same court shall not
be construed as joint trial;
(ii) the complaint shall be deemed to include any
subsequent complaint in respect of further
investigation that may be conducted to bring any
further evidence, oral or documentary, against
any accused person involved in respect of the
offence, for which complaint has already been
filed, whether named in the original complaint or
not.
(2) Nothing contained in this section shall be deemed to
affect the special powers of the High Court regard bail under
Section 439 of the Code of Criminal Procedure, 1973 (2 of
1974) and the High Court may exercise such powers including
the power under clause (b) of sub-section (1) of that section
as if the reference to “Magistrate” in that section includes also
a reference to a “Special Court” designated under Section 43.”
Section 44 deals with offences triable by Special Court. Special
Court would mean the Court of Session. 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 50 of the PMLA reads as follows:
“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;
(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.”
(Emphasis supplied)
Section 50 empowers the authorities under the PMLA with regard to
summons, production of documents and to give evidence. Sub-
Section (3) of Section 50 directs that all persons so summoned
shall be bound to attend in person or through authorized agents
and shall be bound to state the truth upon any subject with respect
to which they are examined or make statements and produce
documents as may be required. Therefore, the authority under the
PMLA does have power to summon and record statement of
witnesses in terms of Section 50 of the Act. Section 71 of the PMLA
reads as follows:
“71. Act to have overriding effect.—The provisions of
this Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law for the time being in
force.
Section 71 of the PMLA makes the provisions of PMLA to have
overriding effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force. It is the
interpretation of the aforesaid provisions that has become
necessary in the case at hand.
9. The petitioner is in judicial custody concerning crime No.60
of 2022. Charge sheet has been filed and the petitioner continues to
be in judicial custody and the matter is pending consideration
before the Court of the learned Magistrate in C.C.No.25035 of 2022.
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 the case at hand. It is, therefore, to get into the angle of
money laundering an ECIR comes to be registered against the
petitioner. Pursuant to registration of ECIR, the authorities, as
obtaining under Section 50 of the PMLA, sought to record the
statements of the petitioner with regard to registration of crime. In
terms of Section 50(2) of the PMLA which empowers the Director or
an authority authorized for collection of evidence, the statements of
the petitioner including others who are in judicial custody
concerning C.C.No.25035 of 2022 are sought to be recorded.
Therefore, the application was filed before the concerned Court. The
application so filed before the concerned Court by the ED is titled
“APPLICATION TO RECORD STATEMENTS UNDER SECTION 50(3)
OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002” and the
plea of the ED before the learned Magistrate is as follows:
“1. Shailendra Kumar Choubey, working as Assistant
Director in the Directorate of Enforcement, Bengaluru begs
leave to this Court to file this application to record statement
of the respondent No.2/accused No.1. Respondent
No.29/Accused No.28, Respondent No.31/ Accused No.30,
Respondent No.32/Accused No.31 and Respondent
No.28/Accused No.27 (who are under the judicial custody of
this Hon’ble Court), by virtue of Section 50(2) & (3) of the
Prevention of Money Laundering Act, 2002 (hereinafter
referred to as an “Act’; for the sake of brevity), as such I am
well conversant with the facts of the case from the office
records.
2. It is humbly submitted that the Applicant is the
Investigating Officer and authorized to investigate cases under
Section 48 & 49 of the PMLA, 2002.
3. It is respectfully submitted that the Applicant
Department is the sole Investigation Agency under the Act and
the main objects of the Act are to confiscate the movable and
immovable properties which are proceeds of crime and
involved in money laundering and also to punish the offenders
of money laundering.
4. It is humbly submitted that the brief facts of the
scheduled offence case are that High Grounds Police Station
registered an FIR vide crime No.48/2022 against the above
said accused persons under Section 120B, 409, 420, 465, 468,
471 r/w 34 of IPC, 1860. It is alleged that these accused were
involved in the irregularities observed in Police Sub-Inspector
Recruitment, 2021, Karnataka State Police Examination. These
people have been actively involved in the colluding with some
candidates who used illegal means to get selection in the said
examination. There were around 8 FIRs registered by various
Police Stations against the candidates and Police authorities in
the recruitment Cell.”
The afore-quoted title and the plea for filing the application would
unmistakably indicate that the ED wanted to record statements
under sub-sections (2) & (3) of Section 50 of the PMLA and it was
described that the signatory to the application was the Investigating
Officer who was authorized to investigate under Sections 48 and 49
of the PMLA. Sections 48 and 49 deal with authorities under the
PMLA. Therefore, the intention of the Investigating Officer who was
appointed to investigate into the ECIR so registered against the
petitioner and others was to record statements in terms of subsections
(2) and (3) of Section 50. Therefore, the provisions of
PMLA were invoked against the petitioner and it is during
investigation where the offence under Sections 3 and 4 is made out
the statements are sought to be recorded.
10. If the ED wants to invoke the provisions of the PMLA to
discern the offence under Section 3 of the PMLA, the designated
Court is the Court of Session alone which had the power to even
consider any application emanating from the provisions of the PMLA
as the offence supra, Section 43 supra and Section 71 clearly mean
that the designate Court to try anything emanating from the PMLA
is the Special Court and the Special Court is the Court of Session.
Section 71 has overriding effect on any law. The petitioner may
have been in custody concerning C.C.No.25035 of 2022 and the
said custody is ordered by the learned Magistrate. Merely because
custody is ordered by the learned Magistrate, he cannot be clothed
with the powers of a Court of Session, which alone has the power to
consider any application of the kind that was made before the
learned Magistrate. The learned Magistrate was dealing with an
application filed under Section 50 of the PMLA. It was completely
without jurisdiction for the learned Magistrate to have considered
the application filed under Section 50 of the PMLA. It ought to have
been placed before the concerned Court for taking permission to
record the statements as it is trite that the Special Court can always
have the power of the Magistrate and not the other way round since
it touches upon the jurisdiction. PMLA mandates that anything
emanating from the PMLA shall be considered only by the Special
Court.
11. The answer to a question concerning jurisdiction, can be
either a ‘yes’ or a ‘no’ and never be ‘may be’. Since the
unequivocal interpretation of the PMLA is that everything shall be
placed before the Special Court, the application so filed under
Section 50 of the PMLA could not have been placed before the
learned Magistrate, notwithstanding the fact that the petitioner is in
judicial custody concerning a case and the said custody is ordered
by the learned Magistrate. The acts of the accused may result in
several proceedings under the IPC, under special enactments or
under any other law that would govern such accused and those
enactments may require the accused to be tried before a Special
Court. If the offence alleged is amalgam of the offences under the
IPC which is to be tried before a Magistrate and the other offences
to be tried before a Special Judge, any proceedings that the
prosecution wants to initiate under special enactment it shall be
only before the Special Court. Reference being made to the
judgments of the Apex Court in the cases of HARSHAD S.MEHTA
(supra), A.R.ANTULAY (supra) and VIJAY MADANLAL
CHOUDHARY AND OTHERS v. UNION OF INDIA AND OTHERS1
in the circumstances becomes apposite. I deem it appropriate to
notice the judgment in the case of VIJAY MADANLAL
CHOUDHARY (supra) at the outset. The Apex Court, while
considering entire spectrum of the PMLA and with regard to
constitution of Special Courts, has held as follows:
“352. The expression “Special Court” has been defined
in Section 2(1)(z), which in turn refers to Section 43. Section
43 reads thus:
“CHAPTER VII
SPECIAL COURTS
43. Special Courts.—(1) The Central
Government, in consultation with the Chief Justice
of the High Court, shall, for trial of offence
punishable under section 4, by notification,
designate one or more Courts of Session as
1 2022 SCC OnLine SC 929
Special Court or Special Courts for such area or
areas or for such case or class or group of cases
as may be specified in the notification.
Explanation.—In this sub-section, “High Court”
means the High Court of the State in which a Sessions
Court designated as Special Court was functioning
immediately before such designation.
(2) While trying an offence under this Act, a
Special Court shall also try an offence, other than an
offence referred to in sub-section (1), with which the
accused may, under the Criminal Procedure Code, 1973
(2 of 1974), be charged at the same trial.”
353. The Special Courts established under Section 43 of
the 2002 Act are empowered to try the offences under the
2002 Act. Section 44 bestows that power in the Special
Courts. The same reads thus:
“44. Offences triable by Special Courts.—(1)
Notwithstanding anything contained in the Criminal
Procedure Code, 1973 (2 of 1974),—
(a) an offence punishable under section 4 and any
scheduled offence connected to the offence under
that section shall be triable by the Special Court
constituted for the area in which the offence has
been committed:
Provided that the Special Court, trying a
scheduled offence before the commencement of
this Act, shall continue to try such scheduled
offence; or
(b) a Special Court may, upon a complaint made by
an authority authorised in this behalf under this
Act take cognizance of offence under section 3,
without the accused being committed to it for
trial.
Provided that after conclusion of investigation, if no
offence of money-laundering is made out requiring filing
of such complaint, the said authority shall submit a
closure report before the Special Court; or
(c) if the court which has taken cognizance of the
scheduled offence is other than the Special Court
which has taken cognizance of the complaint of
the offence of money-laundering under subclause
(b), it shall, on an application by the
authority authorised to file a complaint under this
Act, commit the case relating to the scheduled
offence to the Special Court and the Special Court
shall, on receipt of such case proceed to deal with
it from the stage at which it is committed.
(d) a Special Court while trying the scheduled offence
or the offence of money-laundering shall hold trial
in accordance with the provisions of the Criminal
Procedure Code, 1973 (2 of 1974) as it applies to
a trial before a Court of Session.
Explanation.—For the removal of doubts, it is clarified
that,—
(i) the jurisdiction of the Special Court while dealing
with the offence under this Act, during
investigation, enquiry or trial under this Act, shall
not be dependent upon any orders passed in
respect of the scheduled offence, and the trial of
both sets of offences by the same court shall not
be construed as joint trial;
(ii) the complaint shall be deemed to include any
subsequent complaint in respect of further
investigation that may be conducted to bring any
further evidence, oral or documentary, against
any accused person involved in respect of the
offence, for which complaint has already been
filed, whether named in the original complaint or
not.
(2) Nothing contained in this section shall be deemed to
affect the special powers of the High Court regarding bail
under section 439 of the Criminal Procedure Code, 1973 (2 of
1974) and the High Court may exercise such powers including
the power under clause (b) of subsection (1) of that section as
if the reference to “Magistrate” in that section includes also a
reference to a “Special Court” designated under section 43.”
354. This provision opens with a non-obstante clause
making it clear that the dispensation provided therein is
notwithstanding anything contained in the 1973 Code
regarding the matters provided therein in relation to trials
concerning offence of money-laundering to be conducted by
the Special Court. This provision has undergone amendment
vide Act 20 of 2005, Act 2 of 2013 and Finance (No. 2) Act,
2019. In the present set of matters, we are essentially
concerned with the provision as obtaining after Act 2 of 2013
and the subsequent amendment vide Finance (No. 2) Act,
2019. To begin with, Clause (a) in sub-section (1) of Section
44, as existed prior to amendment Act 2 of 2013, stood thus:
“44. Offences triable by Special Courts.—(1)
Notwithstanding anything contained in the Criminal
Procedure Code, 1973 (2 of 1974),—
(a) the scheduled offence and offence punishable
under Section 4 shall be triable only by the
Special Court constituted for the area in which
the offence has been committed:
Provided that the Special Court, trying a
scheduled offence before the commencement of
this Act, shall continue to try such scheduled
offence; or.”
355. Post amendment of 2013 and as applicable to this
date, Clause (a) reads thus:
“44. Offences triable by Special Courts.—(1)
Notwithstanding anything contained in the Criminal
Procedure Code, 1973 (2 of 1974),—
Provided that the Special Court, trying a
scheduled offence before the commencement of this
Act, shall continue to try such scheduled offence; or;
(a) an offence punishable under section 4 and any
scheduled offence connected to the offence under
that section shall be triable by the Special Court
constituted for the area in which the offence has
been committed:
….”
356. The amendment of 2013 in fact clarifies the
dispensation to be followed in regard to trials concerning
offence of money-laundering under this Act and the trial in
relation to scheduled offence including before the Special
Court trying such (scheduled) offence. By virtue of this clause,
the trials regarding the offence of money-laundering need to
proceed before the Special Court constituted for the area in
which the offence of money-laundering has been committed.
In case the scheduled offence is triable by Special Court under
the special enactment elsewhere, the provision, as amended,
makes it amply clear that both the trials after coming into
effect of this Act need to proceed independently, but in the
area where the offence of money-laundering has been
committed.
357. In that, the offence of money-laundering
ought to proceed for trial only before the Special Court
designated to try money-laundering offences where the
offence of money-laundering has been committed. This
is a special enactment and being a later law, would
prevail over any other law for the time being in force in
terms of Section 71 of the 2002 Act.”
(Emphasis supplied)
The Apex Court holds that the offences falling under the PMLA shall
be tried only by the Special Court that is the Court of Session and
Section 71 of the PMLA has overriding effect over any other law for
the time being in force.
12. It is now germane to notice the judgment of Seven Judge
Bench of the Apex Court in the case of A.R.ANTULAY v.
R.S.NAYAK2 (supra). A Constitution Bench had directed the matter
to be transferred to a High Court for conduct of enquiry. This order
comes to be recalled by a Seven Judge Bench holding that the
jurisdiction that is not conferred under the Act cannot be conferred
even by the Court. The Apex Court in the said judgment holds as
follows:
“7. The State Government on 15-1-1983, notified the
appointment of Shri R.B. Sule as the Special Judge to try the
offences specified under Section 6(1) of the 1952 Act. On or
about 25-7-1983, it appears that Shri R.B. Sule, Special Judge
discharged the appellant holding that a member of the
Legislative Assembly is a public servant and there was no valid
sanction for prosecuting the appellant.
8. On 16-2-1984, in an appeal filed by Respondent 1
directly under Article 136, a Constitution Bench of this Court
held that a member of the Legislative Assembly is not a public
servant and set aside the order of Special Judge Sule. Instead
of remanding the case to the Special Judge for disposal in
accordance with law, this Court suo motu withdrew the Special
Cases No. 24/82 and 3/83 (arising out of a complaint filed by
one P.B. Samant) pending in the Court of Special Judge,
Greater Bombay, Shri R.B. Sule and transferred the same to
the Bombay High Court with a request to the learned Chief
Justice to assign these two cases to a sitting Judge of the High
Court for holding the trial from day to day. These directions
were given, according to the appellant, without any pleadings,
without any arguments, without any such prayer from either
side and without giving any opportunity to the appellant to
AIR 1988 SC 1531
make his submissions before issuing the same. It was
submitted that the appellant's right to be tried by a competent
court according to the procedure established by law enacted
by Parliament and his rights of appeal and revision to the High
Court under Section 9 of the 1952 Act had been taken away.
… …. ….
14. P.S. Shah, J. to whom the cases were referred to
from D.N. Mehta. J. on 24-7-1986 proceeded to frame as
many as 79 charges against the appellant and decided not to
proceed against the other named co-conspirators. This is the
order impugned before us. Being aggrieved by the aforesaid
order the appellant filed the present Special Leave Petition
(Cri) No. 2519 of 1986 questioning the jurisdiction to try the
case in violation of the appellant's fundamental rights
conferred by Articles 14 and 21 and the provisions of the Act
of 1952. The appellant also filed Special Leave Petition (Cri)
No. 2518 of 1986 against the judgment and order dated 21-8-
1986 of P.S. Shah, J. holding that none of the 79 charges
framed against the accused required sanction under Section
197(1) of the Code. The appellant also filed a Writ Petition No.
542 of 1986 challenging a portion of Section 197(1) of Code as
ultra vires Articles 14 and 21 of the Constitution.
… …. …
19. In this appeal two questions arise, namely, (1)
whether the directions given by this Court on 16-2-1984
in R.S. Nayak v. A.R. Antulay [(1984) 2 SCC 183, 243: 1984
SCC (Cri) 172: (1984) 2 SCR 495, 557] withdrawing the
Special Case No. 24 of 1982 and Special Case No. 3 of 1983
arising out of the complaint filed by one Shri P.B. Samant
pending in the Court of Special Judge, Greater Bombay, Shri
R.B. Sule, and transferring the same to the High Court of
Bombay with a request to the Chief Justice to assign these two
cases to a sitting Judge of the High Court, in breach of Section
7(1) of the Act of 1952 which mandates that offences as in
this case shall be tried by a Special Judge only thereby
denying at least one right of appeal to the appellant was
violative of Articles 14 and 21 of the Constitution and whether
such directions were at all valid or legal, and (2) if such
directions were not at all valid or legal in view of the order
dated 17-4-1984 referred to hereinbefore, is this appeal
sustainable or the grounds therein justifiable in these
proceedings. In other words, are the said directions in a
proceeding inter partes binding even if bad in law or violative
of Articles 14 and 21 of the Constitution and as sued are
immune from correction by this Court even though they cause
prejudice and do injury? These are the basic questions which
this Court must answer in this appeal.
… … …
22. The only question with which we are concerned in
this appeal is, whether the case which is triable under the
1952 Act only by a Special Judge appointed under Section 6 of
the said Act could be transferred to the High Court for trial by
itself or by this Court to the High Court for trial by it. Section
406 of the Code deals with transfer of criminal cases and
provides power to this Court to transfer cases and appeals
whenever it is made to appear to this Court that an order
under this section is expedient for the ends of justice. The law
provides that this Court may direct that any particular case or
appeal be transferred from one High Court to another High
Court or from a criminal court subordinate to one High Court
to another criminal court of equal or superior jurisdiction
subordinate to another High Court. Equally Section 407 deals
with the power of the High Court to transfer cases and
appeals. Under Section 6 of the 1952 Act, the State
Government is authorised to appoint as many Special Judges
as may be necessary for such area or areas for specified
offences including offences under the Act. Section 7 of the
1952 Act deals with cases triable by Special Judges. The
question, therefore, is whether this Court under Section 406 of
the Code could have transferred a case which was triable only
by a Special Judge to be tried by the High Court or even if an
application had been made to this Court under Section 406 of
the Code to transfer the case triable by a Special Judge to
another Special Judge could that be transferred to a High
Court, for trial by it. It was contended by Shri Rao that the
jurisdiction to entertain and try cases is conferred either by
the Constitution or by the laws made by Parliament. He
referred to us the powers of this Court under Articles 32, 131,
137, 138, 140, 142, 145(1) of the Constitution. He also
referred to Entry 77 of List I of the Constitution which deals
with the constitution of the courts. He further submitted that
the appellant has a right to be tried in accordance with law
and no procedure which will deny the equal protection of law
can be invented and any order passed by this Court which will
deny equal protection of laws would be an order which is void
by virtue of Article 13(2) of the Constitution. He referred us to
the previous order of this Court directing the transfer of cases
to the High Court and submitted that it was a nullity because
of the consequences of the wrong directions of this Court. The
enormity of the consequences warranted this Court's order
being treated as a nullity. The directions denied the appellant
the remedy by way of appeal as of right. Such erroneous or
mistaken directions should be corrected at the earliest
opportunity, Shri Rao submitted.
… … … ….
24. Section 7(1) of the 1952 Act creates a condition
which is sine qua non for the trial of offences under Section
6(1) of the said Act. The condition is that notwithstanding
anything contained in the Code of Criminal Procedure or any
other law, the said offences shall be triable by Special Judges
only. (emphasis supplied). Indeed conferment of the exclusive
jurisdiction of the Special Judge is recognised by the judgment
delivered by this Court in A.R. Antulay v. Ramdas Sriniwas
Nayak [(1984) 2 SCC 500: 1984 SCC (Cri) 277: (1984) 2 SCR
914] where this Court had adverted to Section 7(1) of the
1952 Act and at p. 931 (SCC p. 514) observed that Section 7
of the 1952 Act conferred exclusive jurisdiction on the Special
Judge appointed under Section 6 to try cases set out in
Sections 6(1)(a) and 6(1)(b) of the said Act. The court
emphasised that the Special Judge had exclusive jurisdiction to
try offences enumerated in Section 6(1)(a) and (b). In spite of
this while giving directions in the other matter, that is, R.S.
Nayak v. A.R. Antulay [(1984) 2 SCC 183, 243: 1984 SCC
(Cri) 172: (1984) 2 SCR 495, 557] this Court directed transfer
to the High Court of Bombay the cases pending before the
Special Judge. It is true that Section 7(1) and Section 6 of the
1952 Act were referred to while dealing with the other matters
but while dealing with the matter of directions and giving the
impugned directions, it does not appear that this court kept in
mind the exlusiveness of the jurisdiction of the Special Court
to try the offences enumerated in Section 6.
… …. ….
59. Here the appellant has a further right under Article
21 of the Constitution — a right to trial by a Special Judge
under Section 7(1) of the 1952 Act which is the procedure
established by law made by the Parliament, and a further right
to move the High Court by way of revision or first appeal
under Section 9 of the said Act. He has also a right not to
suffer any order passed behind his back by a court in violation
of the basic principles of natural justice. Directions having
been given in this case as we have seen without hearing the
appellant though it appears from the circumstances that the
order was passed in the presence of the counsel for the
appellant, these were bad.
… … ….
80. In giving the directions this Court infringed the
constitutional safeguards granted to a citizen or to an accused
and injustice results therefrom. It is just and proper for the
court to rectify and recall that injustice, in the peculiar facts
and circumstances of this case.”
The Apex Court in the case of HARSHAD S.MEHTA v. STATE OF
MAHARASHTRA3 (supra) has held as follows:
“Criminal courts are normally constituted under the
provisions of the Criminal Procedure Code. Section 6 of the
Code of Criminal Procedure, 1973 (for short “the Code”)
provides for the classes of criminal courts. In addition to the
provisions contained in the Code or the old Code of 1898, from
time to time, enactments have been passed providing that in
respect of certain offences, there will be a Special Court
manned by persons having specified qualifications. In the
present appeals, we are concerned with such an enactment,
namely, the Special Court (Trial of Offences Relating to
Transactions in Securities) Act, 1992 (“the Act” for short). The
passing of the Act was preceded by an Ordinance which was
promulgated on 6-6-1992.
… … … …
6. The Act has an overriding effect as provided in
Section 13 which, inter alia, stipulates that the provisions of
the Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law for the time being in
3 (2001)8 SCC 257
force. Section 14 is the rule-making power of the Central
Government. Section 15 repeals the Ordinance.
… … … …
22. The Special Court may not be a criminal court as
postulated by Section 6 of the Code. All the same, it is a
criminal court of original jurisdiction. On this count the doubt,
if any, stands resolved by the decision of the Constitution
Bench of this Court in A.R. Antulay v. Ramdas Sriniwas
Nayak [(1984) 2 SCC 500 (p. 527, para 27) : 1984 SCC (Cri)
277] . In Antulay case [(1984) 2 SCC 500 (p. 527, para 27) :
1984 SCC (Cri) 277] the Constitution Bench said that shorn of
all embellishment, the Special Court is a court of original
criminal jurisdiction and to make it functionally oriented some
powers were conferred by the statute setting it up and except
those specifically conferred and specifically denied, it has to
function as a court of original criminal jurisdiction not being
hidebound by the terminological status description of
Magistrates or a Court of Session. Under the Code, it will enjoy
all powers which a court of original criminal jurisdiction enjoys
save and except the ones specifically denied.
... … … …
62. Our conclusion, therefore, is that the Special Court
established under the Act is a court of exclusive jurisdiction.
Sections 6 and 7 confer on that court wide powers. It is a
court of original criminal jurisdiction and has all the powers of
such a court under the Code including those of Sections 306 to
308.”
A Three Judge Bench of the Apex Court in the case of HARSHAD
S.MEHTA followed the judgment in the case of A.R.ANTULAY
(supra) to hold, if a Special Court is created under the provisions of
a special enactment, the proceedings falling under that enactment
shall be held only before the Special Court. For this purpose the
Apex Court holds that the Special Court enjoys all the powers of the
court of original jurisdiction and it holds a dual capacity and powers
of both the Magistrate and the Court of Session depending upon the
stage of the case.
13. In the light of the statutory frame work of the PMLA and
the application filed under Section 50 of the Act, this Court is of the
considered view that the application was not maintainable before
the learned Magistrate, since the Court did not have the power to
direct recording of statements for it to become a record under the
PMLA, the order which is passed by the Court which did not have a
jurisdiction to even consider any application under the PMLA, is
rendered unsustainable. There can be no qualm about the
principles laid down in the judgment rendered in the case of
NIRANJAN SINGH (supra) relied on by the learned counsel
representing the ED to mean what is custody, but the judgment is
inapplicable to the facts of the case at hand as it does not deal with
issues concerning jurisdiction. Therefore, in view of the preceding
analysis, the order passed on the application by the learned
Magistrate requires appropriate interference and is to be
consequently obliterated.
14. For the aforesaid reasons, I pass the following:
O R D E R
(i) The Writ Petition is allowed.
(ii) The impugned order dated 14.09.2022 passed by the
I Additional Chief Metropolitan Magistrate, Bengaluru in
C.C.No.25035 of 2022 stands quashed.
(iii) The 3rd respondent - Enforcement Directorate is
reserved liberty to file an application of the kind that it
has filed before the learned Magistrate, before the
Special Court, which shall deal with it in accordance
with law.
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