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Synopsis

The Allahabad High Court recently observed that if there is nothing extraordinary or special, in the normal course, a person summoned by the Enforcement Directorate (ED) in whatever capacity is required to get, at least the substance of accusation if not the copy of ECIR.

The bench of Justice Mohd Faiz Alam Khan reasoned that it would enable the summoned person to prepare himself accordingly or may also collect relevant documents to answer the questions that may be put by the ED when interrogating the person summoned.

Court said that the inquiry or investigation, as the case may be, is required to be fair to all stakeholders, more so towards a person whose status before the ED is not known yet.

The court was dealing with an application under Section 482 CrPC filed by one Saurabh Mukund who had been sent summons by the ED in cases under the Prevention of Money Laundering Act, 2002 (PMLA). He was asked to appear before the ED and furnish details about 111 Companies.

Mukund argued that the issued summons were a deliberate abuse of authority and they were nothing but an attempt to harass him as in an identical matter, he was already facing prosecution by the ED. Mukund prayed the court to quash the two ECIRs and all subsequent communications/ proceedings emanating therefrom.

Mukund's counsel contended that when an ECIR had already been registered by the ED, in the same offence another 2 ECIRs could not be registered.

Further, he apprised the court that while replying to the said summons, Mukund sought a copy of the ECIRs as he felt that in all probability these two subsequent ECIRs were with regard to the same companies which were already being investigated by the ED, however, the copies were denied. 

On the other hand, the counsel for ED held Mukund's plea premature and argued that the summons had been issued to him by the ED in exercise of power contained under Section 50 of PMLA and in furtherance of 2 new ECIRs, thus his application under Section 482 CrPC was not maintainable.

ED also alleged that these 2 ECIRs were not connected with the subject matter of earlier ECIR, and Mukund was not cooperating with the investigation and was not appearing before Summoning/ Investigating Authority.

The high court noted that ED was willing to provide the ECIRs in a sealed envelope to the court but not on record by way of an affidavit as ED alleged that it could affect the investigation of the case. However, court said that it was not inclined to promote the culture of sealed covers in judicial proceedings.

Further, court noted that under Section 50, PMLA, the ED is empowered to summon 'anyone'  related to a case under PMLA, and that person is bound to appear. 

However, it highlighted that at the time of such an investigative process, the person summoned is not an accused. Mere registration of ECIR does not make a person an accused as he may eventually turn out to be an accused only upon being arrested or upon being prosecuted, court said. 

Therefore, it held that "no person is entitled in law to evade the summons issued under Section 50 PMLA on the ground that there is a possibility that he may be arrested in the future".

Court pointed out that in the matter at hand, Mukund had only been summoned to appear and submit certain documents which may be in his possession as he had been an employee of the Companies under scanner.

"...thus the petitioner's prayer for quashing of ECIR'S itself is premature as at this stage even the status of the applicant before the ED is not known and the same is in the realm of future," court opined. 

Furthermore, regarding the ED's insistence that it could provide the ECIRs to the court only in sealed covers, court said that "the inquiry or investigation, as the case may be, is required to be fair to all stake holders, moreso towards a person whose status before the ED is not known yet".

However, the bench noted that as of now, it is not mandatory for the ED to furnish a copy of ECIRs to the person as held by the Apex Court in Vijay Madanlal Choudhary and Ors. vs. Union of India (UOI) and Ors (2022).

Therefore, while stressing that Mukund's application appeared to have been filed on mere apprehension, court denied any interference.

"The Directorate of Enforcement has not filed any complaint against the petitioner and he is yet not an accused in the present ECIRs and it cannot be said at this uncertain stage that Directorate of Enforcement is identifying the petitioner as an accused, in absence of any formal accusation to this effect. 30. Thus, having gone through the facts and circumstances of present case and for the reasons given herein before and also in view of the judicial precedents discussed above, this Court finds no good ground to quash the summons issued under Section 50 of PMLA to the petitioner or the impugned ECIR's," court ordered. 

Case Title: Saurabh Mukund v. Directorate Of Enforcement Thru. Its Joint Director Lko.