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.

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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)