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Confession by accused under Section 50 of PMLA is not judicial confession; can’t be used against co-accused: Delhi High Court

April 19, 2024

In the Matters of: -

SANJAY JAIN VS. ENFORCEMENT DIRECTORATE, BAIL APPLN. 3807/2022

Background of the Case:

The present petition has been filed before the Delhi High Court, under Section 45 of the Prevention of Money Laundering Act, 2002 read with Section 439 of the Code of Criminal Procedure, 1973 seeking regular bail in connection with ECIR No. DLZOI/43/2021 dated 20.05.2021 registered by the respondent/ED.

The Enforcement Case Information Report (hereinafter referred to as 'ECIR') was registered against the petitioner on the basis of FIR, dated 17.05.2021 registered by the Central Bureau Investigation under Sections 120B read with 420 IPC and Sections 13(2) read with 13(1)(d) of the PC Act, 1988.

FIR contained allegations regarding exchange of illegal commissions in import of raw materials and fertilizers, manipulation of sales data of fertilizers for claiming higher subsidy, etc.

PETITIONER – SANJAY JAIN

RESPONDENT – ENFORCEMENT DIRECTORATE

Delhi High Court Observations and Judgement:

The recent ruling by the Delhi High Court had emphasized that a confession made by an accused under Section 50 of the Prevention of Money Laundering Act (PMLA) is not a judicial Confession. Key highlights of ruling are as under:

  1. In the case of Sanjay Jain v Enforcement Directorate, Hon’ble High Court clarified that such confessions should only be considered as corroborative evidence and not a substantial piece of evidence, when the same had been made under the section 50 of PMLA.
  2. Justice Mahajan asserted that the court cannot base its findings of guilt solely on the confession of a co-accused. Instead, it should evaluate all other evidence presented and establish the guilt of the accused before considering the statement of the co-accused for additional assurance. Furthermore, the court pointed out the absence of specific provisions in the PMLA, akin to those in the Terrorist and Disruptive Activities Act, 1987 (TADA) or Maharashtra Control of Organised Crime, 1999 (MCOCA), making a co-accused's confession admissible against others. In the light of same, Justice Mahajan invoked Section 30 of the Evidence Act, stating that the confession of an accused against a co-accused should be treated as corroborative evidence.
  3. According to the court, the confessional statement under Section 50 of the PMLA is not a standalone piece of evidence but should be used only to support and corroborate other evidence in reaching a conclusion of guilt. The court highlighted that while proceedings under Section 50 of the PMLA are judicial, a confession made in such a statement does not qualify as a judicial confession.
  4. These conclusions were reached in the context of granting regular bail to Sanjay Jain, an accused in the IFFO money laundering case. The court detailed the allegations against Jain, involving a criminal conspiracy from 2007-2014 to defraud shareholders and the government through fraudulent import practices.
  5. Additionally, the court clarified that statements recorded under Section 50 of the PMLA are admissible in evidence, but their thorough consideration should be reserved for the trial court. It emphasized that at the bail stage, these statements can be examined to ascertain whether there are reasonable grounds to believe that the bail applicant is not guilty. The court cautioned against a mini-trial during the bail proceedings and stressed the need to appreciate the statements at face value, considering any contradictions or inconsistencies as factors benefiting the bail applicant.
  6. Ultimately, the court concluded that there are reasonable grounds to believe in Jain's innocence and that he is unlikely to commit any offense while on bail, leading to the granting of bail.

Relevant Sections:

  1. Section 45 of PMLA: Offences to be Cognizable and Non-Bailable.
  2. Sections 50 of PMLA: Powers of authorities regarding summons, production of documents and to give evidence, etc.
  3. Section 439 of CRPC: Special powers of High Court or Court of Session regarding bail.
  4. Section 120 B of IPC: Punishment for Criminal Conspiracy.
  5. Section 420 of IPC: Cheating and dishonestly inducing delivery of property.
  6. Section 13(2) of PC Act: Punishment of Criminal Misconduct by Public Servant.
  7. Sections 30 of IEA: Consideration of proved confession affecting person making it and others jointly under trial for same offence.

Source:

https://images.assettype.com/barandbench/2024-03/e2abeeec-d732-498d-905b   871159eae13c/Sanjay_Jain_v_Enforcement_Directorate.pdf


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