evidentiary value of confessional statements under the prevention of money laundering act, 2005
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This article is written by Palash Bhatkoti, pursuing Certificate Course in Advanced Criminal Litigation & Trial Advocacy from LawSikho.com.

Introduction

Evidence is an indispensable part of any judicial proceeding. There is no place for hearsay, when the life, liberty, and dignity of an individual are at stake. 

The law of evidence in India is governed by the Indian evidence act,1872. The Traditional investigations are strictly governed by the provisions of the Indian evidence act, 1872 and the Criminal Procedure Code 1973. However, certain special statutes, like the Prevention of Money Laundering Act, 2005(PMLA), The Customs act, 1962, The Foreign Exchange Regulation Act, (FERA), 1973(now repealed), The Narcotic Drugs and Psychotropic Substances  Act (NDPS), 1985,etc have special provisions with respect to the manner of investigation and recording of statements of the witnesses during investigation. The law contained in these statutes with respect to the statements and confessions made during the course of investigation is distinct from the well settled principles of traditional criminal law.

The evidence can be of two types, documentary and oral. The present article is limited to the discussion of oral evidence vis-à-vis the Prevention of Money Laundering Act, 2005. The testimonies of the witnesses constitute oral evidence. In every investigation, statements of witnesses and the accused are recorded, and then they are tested in course of examination-in- chief and cross examination.

At the very outset, I would like to put a disclaimer, that the statements recorded under section 50 of the PMLA, are admissible as evidence. The same has been confirmed by the hon’ble Supreme Court in Rohit Tandon V. Enforcement Directorate, 2017. However, make no mistake, our point of discussion in this article is not the admissibility of the section 50 statements, but the weight of evidence which it carries with itself. The moot question for consideration is, whether a statement recorded under section 50 of PMLA, is good enough evidence to outweigh all other evidence or not? Can a conviction be secured only on the basis of the confessional statements recorded under section 50 PMLA?

Money laundering: a specialized crime 

The investigation under the PMLA is not a cake walk and that’s why we have a specialized agency called the Enforcement Directorate which is tasked with conducting investigations under the PMLA and FEMA. Money laundering is not an ordinary crime and demands extraordinary efforts by the investigators. Finding and decoding money trails is the fulcrum of the whole investigation, as the ultimate goal is to unearth the nexus of the proceeds of crime intertwined with the white economy.

The Supreme Court in Y.S.Jagan Mohan Reddy vs C.B.I on 9 May, 2013, observed that, economic offences have deep rooted conspiracies and involve huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of country. 

But, can the gravity of the offence deprive a person of his fundamental rights? The right to be presumed innocent is one of the basic tenets of the criminal justice system. Article 20(3) of the Indian constitution, guarantees every person, who is accused of an offence, the protection against self incrimination. Confessional statements recorded during the course of investigation are always doubtful and hence the courts always exercise due diligence before accepting them in evidence.            

The Delhi high court in Ripen Kumar V. Department of Customs, 2001 CriLJ 1288, 2000 (72) ECC 722 , has held that, ‘evidence’ in toto means the examination in chief, the cross examination and the re-examination if any. So merely because the statute allows the statement of the witnesses recorded during the investigation to be treated as evidence, would not be a good enough ground to proceed with conviction, unless the witnesses have been cross-examined.

Law of confessional statements under general statutes

The well established principle in the traditional investigations and trials with respect to the general criminal laws like the Indian Penal Code 1860 (IPC), Criminal procedure Code, 1973 (CrPc) and the Evidence Act, 1872 is that the oral statements made to a police officer is no evidence at all(refer sections 24, 25 and 26 of the evidence act). The only way, an oral evidence can be admitted, is by way of examination in chief and then cross examination. Though there are judgments which allow conviction to be made solely on the basis of confessions, but only when the confessions are of sterling quality. Convicting on the basis of a confessional statement is not a rule, but only an exception. Even the courts avoid entering into such territory without being fully sure, as to the authenticity of the confession.    

Section 33 of the evidence act makes it clear that a statement made in the course of judicial proceeding or during the course of any investigation is relevant only when the adverse party has been given an opportunity to cross-examine the witness.

Further, it has already been held by the courts time and again that evidence in totality would mean examination in chief, cross examination and re-examination, if any. Refer to Ripen Kumar’s judgment (Supra).

To have a better understanding, of the conventional jurisprudence on the evidentiary value of the statements of the witnesses, it is imperative, to discuss, the process of recording the evidence during the course of investigation and trial through a basic example:

“Mr. ‘X’, is a renowned builder. He floats an endorsement in the newspaper regarding an upcoming residential project. The housing scheme demands the potential buyers, to pay a token amount, for booking a flat, and then further payments to be made by the buyers in phased manner, till the flats are fully constructed. Many gullible investors, pay the token money and reserve their slot. However after a few months, it is discovered by the investors that the builder has not even started the construction on the site. On further enquiry, it appears that the builder’s license was already cancelled long back and no approval was granted by the government for construction. Infuriated and agonized by the alleged fraud, the investors file FIR with the Police station.”

Now let us discuss, in very brief the post FIR stage, only in terms of oral evidence.

Once the police have recorded an FIR, it will proceed to call witnesses under section 160 CrPC. Their statements would be recorded under section 161 CrPC. Thereafter, during the course of trial, the prosecution will conduct the examination-in-chief of the witnesses whose statements were recorded under section 161 and then they will be cross-examined by the defense. So, this is how the recording and admission of oral evidence will take place in a conventional case.

The law contained under section 162 CrPC is clear that the statements recorded under section 161 by the police officers can only be used for contradicting the witness in the course of examination of the witness. 

The law laid down by the Hon’ble Supreme Court, in Sukhwant Singh v. State, (1995) SCC, SUPL.(2) 262 and Chaudhary Ramji Bhai V. Gujrat, 10 November, (2003) SUPP(5) SCR 390 clearly stipulates that, a statement made by a witness during the course of investigation cannot be treated as evidence, unless that witness has been cross-examined.   

The general rule is that oral evidence can be admitted only after examination-in-chief and cross-examination of the witnesses have been conducted. However, in some cases like the cheque bounce cases under the Negotiable Instruments Act, 1881 (NI Act) the examination-in-chief is exempted if the evidence is given by way of an affidavit(refer section 145 of NI Act).   

Also, the law with respect to the confessions of the co-accused is settled by the Apex court in numerous decisions over a period of time. Like in Kashmira Singh V. State of Madhya Pradesh, 1952 SCR 526 while describing the confession of a co-accused as a very weak evidence, held that, confession of a co-accused is not an evidence in the ordinary sense of the term because, as it does not  come within the definition of” ‘evidence’ contained in section 3 of the Evidence Act. It is neither required to be given on oath, nor in the presence of the accused, and it cannot be tested by cross- examination.

After observing the judicial practices and trends, I would like to sum up in a few words by saying that, as far as the validity of confessional statements is concerned in general statutes, the plain rules of evidence apply. The law of the land as it stands today is that the evidentiary value of confessional statements is negligible. A confession is a weak piece of evidence, and prosecution will be naïve, if it seeks to attain conviction purely on the basis of the confessions without being corroborated by any cogent evidence.

However, there is a slight deviation from the ‘beaten path’ under special laws, as far as the rules of evidence are concerned, which we shall examine herein-below.

               

Section 50, PMLA and identical provisions in other statutes

The three main issues which invariably pop up while deciding the validity of confessional statements recorded under the special laws are as follows:

  1. Whether the officers under the special laws are police officers within the meaning of section 25 and 26 of the Evidence Act?
  2. The nature of investigation in these statutes is quasi judicial. The statements are recorded on oath before the investigating officer.
  3. There is no provision of recording of FIR and forwarding it to the magistrate. So will the protection against testimonial compulsion be available with the accused?    

Our discussion herein below with respect to the special statutes will revolve around the aforesaid three issues.

PMLA, 2005

To, understand as to why the statements recorded under section 50 PMLA are admissible in evidence, we have to look into the provisions of the act, which allows it be to be considered as an evidence in the first place.

Sec.50- Powers of authorities regarding summons, production of documents and to give evidence, etc.

Section 50 empowers the authorized officer to call upon any person as witness including the accused, to give evidence, statement or records, etc and the person called upon is bound to attend the summons.

Adding to the horror of the attendee, the law has classified the proceedings under section 50 as judicial proceedings. This would mean that if the person summoned fails to appear before the officer, he would invite contempt of the law and can be separately prosecuted for disobeying the command of the public servant.    

Now, it is important to focus on sub sections (2), (3) and (4) of section 50 of the act to understand its full implication. Subsection (1) and (2) are hybrids of section 91 and section 160 of the CrPc. Section 91 CrPc talks about the power of the police officer to call for documents. While section 160 talks about calling persons for recording their statements. The only departure which the PMLA makes form CrPc is that it does not only mention documents, information and statements, but also includes the term ‘evidence’. 

Another important aspect is sub section (4). It deems the proceedings under sub section (2) and (3) as judicial proceedings. Judicial proceedings have been defined under CrPc section 2(i), as all those proceedings where evidence can be taken on oath. In that case, any mis-statement can also invite prosecution for perjury.

So the fact that section 50 Statements are admissible in evidence is because these statements are made on oath and signed by the deponent. The Supreme Court has also accepted the same in Rohit Tandon V. Enforcement Directorate, 2017.

 The Andhra Pradesh High Court in Dalmia Cements Limited V. Assistant of Enforcement Directorate, 2016 with this respect, observed that, since under PMLA investigation there is no provision of forwarding an FIR to the magistrate, and the officers investigating the offence under PMLA are not police officers, therefore, the protection against testimonial compulsion cannot be claimed under the PMLA. 

So, even after one and half decades from the enactment of the PMLA, the question as to the weight of the evidence of section 50 statement is undecided. But through this article, I will attempt to tackle this controversy and bring out some clarity for the readers. 

Since the language used for the purpose of summoning and taking evidence is pari-materia in other similarly placed laws, it would be beneficial to analyze the identical provisions contained in some of those statutes through judicial pronouncements to establish that section 50 statements cannot be treated as gospel’s truth as they are not conclusive evidence unless corroborated with some cogent material. 

Customs Act, 1962

Sec.108- Power to summon persons to give evidence and produce document 

The, similar question as to the admissibility of the statements made before the customs officer, was called in question. The question which arose for consideration was: Is a customs officer a police officer within the meaning of section 25 Evidence Act?

The Supreme Court in The State Of Punjab V. Barkat Ram ,1962 AIR 276, 1962 SCR (3) 338 held that, though section 25 of the evidence act, talks only about a police officer, but giving it a narrow interpretation would amount to travesty of justice. Though the customs officers may not be designated as police officers, the functions which they discharge are akin to police function, i.e. law enforcement and hence, they are to be considered as police officers. Consequently any statement made before a customs officer cannot be taken as admissible evidence.

NDPS Act, 1985  

Sec. 67. Power to call for information, etc.

Similar controversy arose, in the case of the NDPS act. The Supreme Court in the case of Tofan Singh V. State of Tamil Nadu, (2013) 16 SCC 31, was considering the validity of the statement made before the Narcotics officer.

Two important questions came up before the court in this case:

  1. Whether a Narcotics officer is a police officer within the meaning of section 24, 25 and 26 of the Evidence Act? 
  2. Whether a statement made before the narcotics officer can be treated as a confession? And if yes, then can it be admissible in evidence?  

The Supreme Court has referred these questions to a Constitution bench and the ultimate answers to these questions is pending the judgment of the Constitution bench. Nevertheless, the reason for referring the matter to the constitution bench was that, the Hon’ble judges in Tofan Singh’s case were not satisfied with the contention upheld in Kanhaiyalal V. Union of India, (2008) 4 SCC 668 , in which the court held that the narcotics officers are not officers are not police officers, and hence the protection given under section 24, 25, 26 of the Evidence act would not be available to the accused.

The Supreme Court in Tofan Singh, made a passing reference that, “We have also to keep in mind the crucial test to determine whether an officer is a police officer for the purpose of Section 25 of the Evidence Act viz. the “influence or authority” that an officer is capable of exercising over a person from whom a confession is obtained”

So just because an officer is not designated as ‘police officer’, would not mean that the litmus test of section 24-26 of the evidence act would not apply. 

Again in, Mohammad Fasrin V. State (2019) 8 SCC 811 the Supreme Court while proceeding on the premise that a confession is admissible in evidence, held that, the Court has to be satisfied that it is a voluntary statement, free from any pressure and also that the accused was apprised of his rights before recording the confession.

A confession recorded, especially when the accused is in custody, is a weak piece of evidence and there must be some corroborative evidence.

Thus, the Supreme Court summarized the issue by stating that, even if confessional statements are admissible in evidence, it will be a very weak piece of evidence and it cannot be relied upon by the prosecution, without due corroboration.          

FERA, 1973

Sec.40- Power to summon persons to give evidence and produce documents.

While weighing the substance of the confessional statement recorded by the Enforcement Directorate, the Supreme Court in A. Tajudeen V. Union of India, (2014), 4 SCC, held that, unless some independent corroborative evidence is brought on record, the confessional statements recorded in the custody during interrogation would be of no consequence. Strict restraint and precaution should be exercised before relying on the oral testimonies without due corroboration.  

Hence, after analyzing various similarly phrased provisions in the light of the judgments of the Hon’ble Courts, it can be concluded that the statements recorded during the course of investigation have no value on a stand-alone basis. Confessional statements are a weak piece of evidence which require corroboration. Although a definitive and concrete judgment from the Apex court is awaited in this regard, for the time being, we can rely upon the principle expounded through aforementioned judgments till the time, this controversy is put to bed by the Supreme Court.      

Conclusion

The right to fair investigation and trial is not only our fundamental right alone but it’s a part of the right to life which is the basic structure of our constitution. The importance of article 21 in our constitution cannot be emphasized enough, as it is perhaps the only article other than article 20 which is immune from the extraordinary powers of the parliament to suspend the fundamental rights. 

The Supreme Court, in Nandany Sathpathy V, P.L. Dani, AIR 1977, SC 1025, observed that, prohibitive scope of article 20(3) goes back to the stage of police interrogation not commencing in court. It extends to and protects the accused in respect of other offences, pending or imminent, which may deter him from voluntary disclosure. The phrase ‘compelled testimony’ must be read as evidence procured not merely by physical threats or violence but by psychic torture, atmospheric pressure, coercion, tiring interrogatives and intimidatory methods.

The law on the confessional statements with respect to the Prevention of Money Laundering Act, and other special statutes is not settled as of today. There are conflicting judgments supporting both the views. However, the settled position of law as we know, is, when there are two views possible, then the view favoring the accused should always be adopted.

Even otherwise, as a matter of prudence, the logical conclusion of this controversy is that the confessional statement cannot be considered as a reliable piece of evidence for securing conviction. There is no doubt, that we have the most competent and celebrated law enforcement officers across the board but that by itself wouldn’t be a good excuse to circumvent the safety measures provided under the law.    


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