The Karnataka High Court recently comprising of a bench of Justice M Nagaprasanna has quashed a Magistrate court order permitting the Enforcement Directorate (ED) to question five undertrials who are in judicial custody in a Special Court case. (Harsha D. v. State)
The bench observed, "Only the special court designated to deal with the offences under the Prevention of Money Laundering (PML) Act has the power to grant permission for the Enforcement Director (ED) to question persons in judicial custody on their arrest in connection with offences alleged under other laws."
Facts of the case
The case pertained to Harsha D, a first divisional clerk who was arrested in the police sub-inspector recruitment scam earlier this year.
The petitioner came before the Court calling in question order passed by the I Additional Chief Metropolitan Magistrate, Bengaluru in a case concerning offences punishable under Sections 34, 120B, 420, 465, 468 and 471 of the IPC.
On 30-08-2022 the 3rd respondent/ Directorate of Enforcement (‘ED’) filed an application under Section 50(3) of the Prevention of Money Laundering Act, 2002 (‘PMLA’) before the concerned Court i.e., the learned Magistrate 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. The learned Magistrate considering both the application and the objection filed, allowed the application and permitted the ED to record the statements as was sought for in the application. Taking note of the same order the petitioner approached the Court.
Courts Observation and Judgment
The bench at the very outset observed, "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 bench further observed, "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."
The bench remarked, "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."
The bench allowing the petition remarked, "In the light of the statutory framework 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".
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