STATEMENT RECORDED UNDER PMLA AND OTHER LAWS: WHETHER ADMISSIBLE AS EVIDENCE?

In a recent
decision of the Supreme Court (Tofan Singh vs. State of Tamil Nadu, Cr.
Appeal No. 152/2013 decided on 29^th October, 2020), the
captioned question was examined in connection with the statement recorded under
the provisions of the Narcotic Drugs and Psychotropic Substances Act, 1985 (the
NDPS Act). The Supreme Court held that the officers who are invested with powers
u/s 53 of this Act are police officers and therefore a statement recorded u/s
67 of the Act cannot be used as a confessional statement in the trial of an
offence under the NDPS Act.

Section 53 of the
NDPS Act empowers the Central Government to invest any officer of the
Department of Central Excise, Narcotics, Customs, Revenue Intelligence or any
other department of the Central Government, including para-military forces, or
armed forces, or any class of such officers with the powers of an officer-in-charge
of a police station for investigation of offences under the NDPS Act.

The prohibition
that a statement recorded u/s 67 of the Act cannot be used as a confessional
statement has its roots in section 25 of the Indian Evidence Act, 1872 (Evidence
Act) which provides that no confession made to a police officer shall be proved
against a person accused of an offence.

It is section 53 of
the NDPS Act which distinguishes it from the provisions in other laws perceived
as comparable as regards issue of summons, power to call for information,
enforcing attendance of any person and examining him on oath, etc. If such
comparable provision in other laws (such as, FEMA, PMLA, Customs Act) does not
have wording similar to that of section 53 of the NDPS Act, it would not be
proper to apply the ratio of the Supreme Court’s decision in Tofan
Singh (Supra) to say that the statement recorded by an officer under
such other laws is not admissible as evidence.

The purpose of
this article is to analyse the correct legal position to find the answer to the
question whether a statement recorded under PMLA is admissible as evidence.

The relevant
aspects of the subject-matter have been reviewed as follows.

RELEVANT PROVISIONS OF PMLA, CrPC AND EVIDENCE ACT

Section 50(3) of
the Prevention of Money-Laundering Act, 2002 (PMLA) specifies the
following obligations of the persons summoned:

(a)        To attend in person or through authorised
agents,

(b)        To state the truth with respect to the
subject for which they are examined or they make statements,

(c)        To produce such documents as may be
required.

Section 164(2) of
the Code of Criminal Procedure, 1973 (CrPC) provides that before
recording any confession, the Magistrate is required to explain to the person
making the statement that he is not bound to make such confession and that if
he does so, it may be used as evidence against him. It further provides that
the Magistrate shall not record the confession unless, upon questioning the
person making it, he has reason to believe that it is being made voluntarily.

The ban in section 25 of the Evidence Act (i.e., no confession made to a
police officer shall be proved as against a person accused of any offence) is
an absolute ban. However, there is no ban on the confession made to any
authority who is not a police officer except when such confession is made while the accused is in police custody.

WARNING U/S 164 OF CrPC – RAISON D’ETRE

Section 50(3) of
the PMLA, among others, enjoins upon the person summoned the obligation ‘to
state the truth upon any subject respecting which he is examined or makes
statement’. In respect of such obligation of the person summoned, a crucial
question that needs to be addressed is whether the warning u/s 164 of the CrPC
needs to be administered to the person before he makes the statement.

This question has
been addressed by the Supreme Court in various decisions. After a detailed
review, the Supreme Court has laid down important propositions in this matter
and also explained the need and raison d’etre underlying the
administering of such a warning. These propositions may be reviewed as follows.

(i)   Section 30 of the Evidence Act does not
limit itself to a confession made to a Magistrate and, therefore, there is no
bar to its application to the statement so recorded. The person who makes the
statement is not excused from speaking the truth on the premise that such a
statement could be used against him. Such requirement is included in the
provision for the purpose of enabling the officer to elicit the truth from the
person being interrogated. There is no involvement of the Magistrate at that
stage¹.

(ii)   Warning a person that making a false statement
is an offence cannot be construed to mean exertion of pressure to extract the
statement².

(iii) Statements
made before the officers are not confessions recorded by the Magistrate u/s 164
of the CrPC. Such statements are not made subject to the safeguard under which
confessions are recorded by a Magistrate. Therefore, it is all the more
necessary to scrutinise such statements to ascertain whether the same were made
under threat from some authority. If such scrutiny reveals that the statements
were voluntary, the same may be received against the maker of the statement in
the same manner as a confession³.

PERSON MAKING A STATEMENT – NOT A COMPELLED WITNESS

During the
examination of an accused, an important issue that arises is whether an
accused person can be compelled to be a witness against himself. In this
connection, reference may be made to Article 20(3) of the Constitution of India
which provides that no person accused of any offence shall be compelled to be a
witness against himself. However, to invoke such a Constitutional right
guaranteed under Article 20(3) against testimonial compulsion, the following
aspects must be examined⁴.

i)             
Whether a formal accusation has
been made against the person claiming such Constitutional guarantee. At the
stage when an authority issues notice to collect information, there is no
accusation against the person from whom the information is sought. The
information is collected to ascertain whether a formal accusation can be made
against the person. This is decided only after the information is collected and
examined. It is only when a show cause notice is issued that it can be said
that a formal accusation has been made against the person⁵;

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1      Asst. Coll. C. Ex.
Rajamundry vs. Duncan Agro Industries Ltd. [2000] 120 ELT 280 (SC)

       
2      C. Sampath Kumar
vs. Enforcement Officer [1997] 8 SCC 358

ii) Whether the offence committed by such a person
would result in his prosecution;

iii)         What is the nature of the accusation and
the probable consequence of such an accusation?

iv)         To ascertain whether the statement is
covered within the prohibition of Article 20(3), the person must be an accused at
the time when he made the statement. Therefore, the fact that he became
an accused after making the statement is irrelevant⁶.

OFFICER RECORDING STATEMENT – WHETHER A POLICE OFFICER

In respect of the
statement recorded u/s 50 of the PMLA, the crucial issue which requires
consideration is whether the officer who records such a statement is a police
officer for the purposes of section 25 of the Evidence Act. Section 25
provides that no confession made to a police officer shall be proved as against
a person accused of any offence. The provisions perceived as comparable to
section 50 of the PMLA are also found in the following statutes:

(1) Foreign
Exchange Management Act, 1999.

(2) Customs Act,
1962.

(3) Central Excise
Act, 1944.

(4) NDPS Act, 1985.

Accordingly, the
decisions of courts in respect of such apparently comparable sections in other
laws may provide a useful reference. The language of the relevant provisions in
the abovementioned laws must be carefully examined and compared with that of
section 50 of the PMLA before relying on the decisions based on the
corresponding provision in the other laws. In this context, some important
propositions laid down by the Courts are reviewed as follows:

(A)  
The crucial test to ascertain
whether an officer recording a statement under a Special Act (such as PMLA) is
a police officer is to check whether such officer is vested with all
powers exercisable by the officer-in-charge of a police station under the CrPC qua
investigation of offences under the CrPC Such powers include the power to
initiate prosecution by submitting a report or chargesheet u/s 173 of the CrPC.
It is not sufficient to show that such officer exercises some or many
powers of a police officer conducting investigation under the CrPC. If he does
not exercise all such powers, such officer would not be regarded
as a police officer⁷.

___________________________________________

5   Bhagwandas Goenka vs. Union of India: AIR
1963 SC 26

6   State of Bombay vs. Kathi Kalu Oghad [1962] 3
SCR 10

(B)  An officer under the Customs
Act, 1962 is empowered to check smuggling of goods, ascertain contravention
of provisions of the Customs Act, to adjudicate on such contravention, realise
customs duty and for non-payment of duty on confiscated smuggled goods and
impose penalty. The Customs Officer does not have power to submit a report to
the Magistrate u/s 173 of the CrPC because he cannot investigate an offence
triable by a Magistrate. He can only file a complaint before the Magistrate.

It is, thus,
evident that the officer recording a statement under the Customs Act does not
exercise all such powers. Accordingly, a Customs Officer is not a
police officer within the meaning of section 25 of the Indian Evidence Act.
Consequently, the statements made before a Customs Officer by a person against
whom such officer makes an inquiry are not covered by the said section and are,
therefore, admissible in evidence⁸.

(C)  While investigating offences under the PMLA,
the Director and other officers do not have all powers
exercisable by the officer-in-charge of a police station under the CrPC. For
example, they do not have the power to submit a report u/s 173 of the CrPC.
Hence, the officers recording a statement u/s 50 of the PMLA are not ‘police
officers’. Accordingly, they are not hit by the prohibition in section 25 of
the Evidence Act. Consequently, a statement recorded before such officers is
admissible as evidence⁹.

(D) On similar grounds, it has been held that an
officer functioning under FERA (having similar powers as under FEMA) cannot be
considered a police officer¹⁰.

(E)  In a recent decision¹¹ concerning
the provisions of the NDPS Act, the Supreme Court examined important aspects
such as fundamental rights and the NDPS Act, confessions u/s 25 of the Evidence
Act, provisions contained in the NDPS Act, the scope of section 67 of the NDPS
Act (power to call for information, etc.) and whether an officer designated u/s
53 of the NDPS Act (power to invest officers of certain departments with powers
of officer-in-charge of a police station) can be said to be a police officer.
After such examination, the Supreme Court held as follows:

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7   Balkishan vs. State of Maharashtra AIR 1981
SC 379

8   State of Punjab vs. Barkatram: AIR 1962 SC
276; Rameshchandra Mehta vs. State of WB: AIR 1970 SC 940; Veera Ibrahim vs.
State of Maharashtra [1976] 2 SCC 302; Percy Rustomji Basta vs. State of
Maharashtra [1971] 1 SCC 847

9   Virbhadra Singh vs. ED (MANU/DEL/1813/2015)
(Del. HC)

10  P.S. Barkathali vs. DoE AIR 1981 Ker 81; also
see Emperor vs. Nanoo [1926] 28 Bom LR 1196; 51 Bom 78 (FB)

11    Tofan Singh vs. State of Tamil Nadu
(Criminal Appeal No. 152 of 2013 decided on 29^th October, 2020)

• the officers who are invested
  with powers u/s 53 of the NDPS Act are ‘police officers’ within the meaning of
  section 25 of the Evidence Act, as a result of which any confessional statement
  made to them would be barred under the provisions of section 25 of the Evidence
  Act and cannot be taken into account in order to convict an accused under the
  NDPS Act;

•   a statement recorded u/s 67
  of the NDPS Act cannot be used as a confessional statement in the trial of an
  offence under the NDPS Act.

SUPREME
COURT SOUNDS A NOTE OF CAUTION REGARDING EVIDENTIARY VALUE OF STATEMENT
RECORDED BY THE OFFICER

The raison
d’etre for section 25 of the Evidence Act (that the statement recorded by a
police officer is not admissible as evidence) is to avoid the risk of the
allegation that such a statement was obtained under coercion and torture.

In the preceding heading, the aspects, such as whether the officer
recording the statement under a particular statute is a police officer and
whether such statement is admissible as evidence as examined by Courts, have
been reviewed in detail in connection with various statutes.

The Supreme Court has sounded a note of
caution in respect of the statement made by a person to an officer who is not a
police officer, and which is accordingly not hit by the ban u/s 25 of the Evidence
Act. Such statement must be scrutinised by the Court to ascertain whether the
same was voluntary or whether it was obtained by inducement, threat or promise
in terms of the tests laid down in section 24 of the Evidence Act. If such
statement is impaired on the touchstone of such tests, the same would be
inadmissible¹².

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12  Asst. Coll. of C. Ex. Rajamundry vs. Duncan
Agro Industries Ltd. [2000] 120 ELT 280 (SC)