The verdict is out on what is to be made of the judgment by the Supreme Court in Prem Prakash v. Union of India [SLP (Crl.) 5416 / 2024, decided on 28.08.2024 ("Prem Prakash")]. The reason it is attracting so much attention is because of the Court's views on how to treat statements given by persons in custody in a PMLA case, which it expressed while granting bail to the petitioner. These views extend to statements made by the person concerned (Paras 21 to 34) as well as a statement of a co-accused person that is being pressed into reliance (Paras 35 to 37).
The Holding
The facts are largely irrelevant for this post, and a quick summary would do. The petitioner was alleged to have been the puppeteer pulling the strings behind a number of persons, all towards orchestrating transfer of properties and monies by illegal means. The material used to substantiate these allegations consisted almost entirely of statements recorded by the Enforcement Directorate officials from the Petitioner whilst he was in custody, and statements of other co-accused persons and witnesses.
In respect of statements by persons concerned, the court appears to have held that: (1) where a person was arrested by the Enforcement Directorate in one case and remanded to judicial custody by a court, the Directorate cannot record statements of that person under Section 50 of the PMLA in a different case without obtaining permission from a court which remanded the person to judicial custody (Para 33); (2) if a person is in custody under PMLA irrespective of the case for which he is under custody, statements under Section 50 PMLA of such a person shall be inadmissible against the maker as such statements will be hit by Section 25 of the Indian Evidence Act 1872 (Paras 27, 32).
In respect of statements by co-accused persons, the Court has held that such statements would be hit by the rule under Section 30 of the Evidence Act which means that such statements cannot be treated as a piece of substantive evidence against an accused. This rule would apply even for the bail hearing, and will require that the agency fields other material since the statement of a co-accused can, at best, be used to lend assurance to other material (Paras 36, 37).
The Controversy
The only real controversy, I would argue, stems from the second part of the holding in respect of how to treat statements of persons in custody under PMLA. This set of observations lends itself to different readings, ranging from narrowest to broadest.
The narrowest reading of Prem Prakash, which would be the storm in a teacup view, would be that the judgment emerged from unique facts and its conclusions must remain confined to those facts. Here, The petitioner was already in custody in one PMLA case, his statements were recorded and used in a different case. All that the Court has said is that only in such a situation would it be impermissible to use the statements against their maker. In all other cases i.e., where a person is arrested and questioned in the same case under PMLA, or where a person is in custody because of a non-PMLA case, there would be no such bar.
The broadest view would argue that Prem Prakash has fundamentally altered the landscape by rendering any Section 50 PMLA statement given in custody after arrest, as a statement which cannot be used against the maker. Such a conclusion relies upon Para 32 of the judgment which begins: "We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker. The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind." A person is not under some unique sense of duress merely because he is already in custody in one case and is now questioned in another, which is why Para 32 is phrased as it is.
The problem, of course, is that Para 29 of the judgment seems to suggest precisely that a person is under a unique sense of threat: "Is a reasonable inference legitimately possible that, due to the vulnerable position in which the appellant was placed and the dominating position in which the Investigating Agency was situated, in view of the arrest in the other proceeding that, there obtained a conducive atmosphere to obtain a confession?" With due respect, this does not make sense, for the reasons already stated above. It is not the quantity of cases in which I am in custody, but the quality of the custodial experience which is what sets it apart. That is the true import of Justice Krishna Iyer's opinion in Nandini Satpathy, which the bench also invokes in Prem Prakash.
It is not just this obvious sense of internal contradictions that hamper Prem Prakash from achieving its fullest potential as a radical judgment which could force investigative agencies to abandon what appears to be the standard operating procedure to force the accused to make his own noose by recording damning statements which lack any kind of corroboration in material particulars, and then hang the accused with it. A related issue is the judgment's seeming reluctance to cross the rubicon on that extremely familiar issue in Indian criminal law and procedure — how to define 'police officer' for purposes of Section 25 of the Evidence Act. That clause bars evidence of confessions to police officers [discussed at length here] and it has been retained as section 23 in the Sakshya Adhiniyam.
Prem Prakash refers to the Supreme Court's recent magnum opus on PMLA, the judgment in Vijay Madanlal Choudhary (2022). For a judgment which set out to clarify the law, it did a woeful job, as can be seen from the observations on this issue of whether Enforcement Directorate officers would be 'police officers' for the purposes of Section 25:
"Ex-consequenti, the statements recorded by the authorities under the 2002 Act, of persons involved in the commission of the offence of money-laundering or the witnesses for the purposes of inquiry/investigation, cannot be hit by the vice of article 20(3) of the Constitution or for that matter, article 21 being procedure established by law. In a given case, whether the protection given to the accused who is being prosecuted for the offence of money-laundering, of section 25 of the Evidence Act is available or not, may have to be considered on case-to-case basis being rule of evidence."
This is remarkably confusing. Either an officer is or isn't a police officer, that is not a 'rule of evidence' that can be left to a case-to-case determination. Nevertheless, Para 24 in Prem Prakash skilfully uses this part to show us that the door was clearly not slammed shut on this issue by Vijay Madanlal, but there were a few cracks left yet. So far, so good.
What happens next is the problem. Prem Prakash has relied upon a decision by three justices in Raja Ram Jaiswal [AIR 1964 SC 828] to understand 'police officer' under Section 25 in a purposive sense by looking to the kind of powers conferred upon an officer. It failed to mention that after Raja Ram Jaiswal came the Constitution Bench decision in Badku Joti Savant [AIR 1966 SC 1746], which offered a different and arguably narrower view of how to interpret 'police officer' for purposes of Section 25. In this limited view of who is a police officer, Badku Joti Savant argued that it has to be a person who can file a police report at the end of an investigation, something which the Enforcement Directorate officials conspicuously do not exercise under the PMLA.
In other words, if the Court was taking the plunge on Section 25 in Prem Prakash, it had to set out more clearly how the existing law could be rationalised first with that part of Vijay Madanlal, and then give us a framework for expanding the contours of Section 25 to include Enforcement Directorate officials within it. This is not difficult. The periodic amendments to the PMLA and Section 44 which speaks of 'complaints' filed at the end of investigations, has brought that the PMLA investigative process closer and closer to a traditional police investigation, blurring the distinction between a complaint proceeding and one launched on a police report. For instance, Section 44 today has an explanation which allows 'further investigation' after filing a complaint , allowing 'subsequent complaints' to be filed.
Thus, even if we cannot close our eyes to the unfortunate holding of Badku Joti Savant (as much as we might want to), it is today not that hard to slot in Enforcement Directorate officials as police officers for Section 25 even with that regressively formalistic framework. Unfortunately, this is left unsaid in Prem Prakash, and it would fall upon subsequent benches confronted with the problem to develop this thought. One would hope that they water the seed and nurture this plant rather than weed it out even before it has had a chance to show the smallest of green shoots.
Will Prem Prakash prove to be seismic decision, or a mere storm in a teacup? Let us wait and see.
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