Drishtikon: Right against Self-Incrimination within the Money Laundering Regime (Article 20(3) vis-à-vis § 50)

The Sangyan
12 min readJan 30, 2023

Abstract

In this research paper, the author would deliberate about the constitutionality of the § 50 of the Prevention of Money Laundering Act, 2002 on the touchstone of Article 20(3) of the Indian constitution. § 50 deals with the “powers of authorities regarding summons, production of documents and to give evidence, etc.” while Article 20(3) pertains to right against self-incrimination. In this paper, the author would put forward the arguments and counter-arguments pertaining to constitutional validity.

Introduction

To begin with, § 50 of the PMLA is not contrary to Art. 20 (3). Firstly, there is a presumption in favor of the constitutionality of an enactment.[1] Even if two views are possible, the Court must make efforts to uphold the constitutional validity of a statute[2] as the interpretation must be in favor of the constitutionality.[3] The apprehension of abuse of law doesn’t invalidate legislation[4] and the principle of ‘reading down’ or ‘reading into’ the provision shall be applied to make it effective, workable, and ensure the attainment of the object of the Act.[5] The Court shall interfere with the legislative process only when a statute is clearly violative of the fundamental rights.[6]

§ 50 doesn’t have any ‘direct and inevitable effect’ on the fundamental right[7] as § 50 doesn’t fulfill the essential ingredients of Art. 20(3) for its application and § 50 has a rational relationship with the legitimate purpose of the act[8], ergo, it is constitutional. Further, the constitutional validity of § 50 has to be understood in the context of objects and reasons for enacting PMLA[9] and in the light of corresponding provisions of analogous Acts.[10] The general public interest that the impugned section serves shall be given due consideration.[11] Further, individual instances of hardship cannot become a ground to declare a provision unconstitutional.[12]

The right to silence and the right not to incriminate oneself is closely linked to the presumption of innocence.[13] The principle of immunity from self-incriminating is founded on the common law principle of ‘presumption of innocence’. § 24 of PMLA places burden of proof on the accused rather than on the prosecution, unlike any criminal case, tried before ordinary criminal courts. Ergo, the privilege of self-incrimination is not applicable under § 50.[14]

The Constitutional Touchstone

Three essential ingredients of Art. 20(3) are, firstly, “person accused of any offense”, secondly, “testimonial compulsion”, and lastly, “to be a witness against himself”.[15]A conjunctive test would be applicable, ergo, the presence of all the ingredients need to be proved beyond reasonable doubt.[16] A person may be arrested and sent to further detention beyond 24 hours but remains outside the scope of Article 20(3).[17] Art. 20(3) didn’t extend to the questioning of persons before the filing of formal complaints in socio-economic offenses.[18] § 50 is a stage before the filing of such complaint.

To start with the first element, Art. 20 (3) “is available to a person against whom a formal accusation relating to the commission of an offense has been leveled which in the normal course may result in prosecution.”[19] A person stands in the character of an accused when an FIR is lodged against him in respect of an offense.[20] Mere issuance of summons cannot be categorized as an act of prosecuting.[21] The formal accusation in socio-economic cases is a complaint filed by the authorized officer, which is the result of an investigation[22] while § 50 is a process of investigation only.

The expression “any person” includes a person who is suspected or believed to be concerned in the money laundering.[23]§ 50 of PMLA deserves to be read down in the facts and circumstances of the case so as to restrict its operation and exclude the accused person.[24] § 50 wouldn’t apply to and include accused persons.[25] Questioning u/s 50 wouldn’t contravene Art. 20(3) as persons were not yet accused but mere suspects[26] and there is no violation of Art. 20(3) by having such provisions.[27]

U/s 108 of the Customs Act, 1960 and 171A of the Sea Customs Act 1878, pari materia to § 50 of the PMLA, the person so summoned is “bound to state the truth” upon any subject and the privilege against self-incrimination can’t be given to such person as he is not an accused”.[28] The arrestee under the socio-economic laws cannot be said to be “an accused”.[29] Art. 20 (3) is not available during the process of admission/denial in a criminal trial.[30]

The second essential element is testimonial compulsion to be a witness against oneself. “Any person” is not excused from speaking the truth on the premise that such a statement could be used against him.[31] The said requirement is included in the provision for the purpose of enabling the gazette officer to elicit the truth from the person interrogated.[32] For socio-economic offenses, Art. 20 (3) wouldn’t apply to persons compelled to give evidence against themselves at such stages.[33] “The mere questioning of an accused person by a police officer, resulting in a voluntary statement, which may ultimately turn out to be incriminatory, is not ‘compulsion’.”[34] Argumentum a fortiori, compulsion created by law does not amount to “compulsion” under Article 20 (3).[35] Ergo, even if there is compulsion then it’s justified and doesn’t qualify under Art. 20 (3).

The third necessary element is “witness against himself”. The individual must be accused of an offense to be protected.[36] As two other conditions are not fulfilled i.e., the person isn’t an accused but merely a suspect and there is no compulsion, ergo, § 50 doesn’t compel an accused to be a witness against himself. “To be a witness” is not equivalent to “furnishing evidence” in its wider sense.[37] Ergo, u/s 50, “any person” is merely “bound to state the truth” and produce materials as required. Further, § 7 of Prevention of Corruption Act 1947, made the accused a competent witness on his own application in respect of offenses under that act.[38]

Into the Reasoning

Arguendo, § 50 isn’t wholly unconstitutional as the parts of § 50 are so inextricably mixed up, the whole law shall be declared valid.[39] Even if an expression or a part of the § 50 of PMLA is unconstitutional, the ‘Doctrine of Severability’[40] may be resorted to. If the phrase “bound to state the truth” contravenes the art. 20(3), then only the said sub-section shall be held unconstitutional and not the whole.[41]

Now coming to the part where it is argued that § 50 of the PMLA is contrary to ART. 20(3), the author argues that while there is a presumption of constitutionality of the statute, per contra, Strict Scrutiny Test is applicable here, as the case involve violation of fundamental right. Under this test, the court presumes the law to be invalid unless the government can demonstrate a compelling interest to justify the law.[42] The government must prove that the law serves a compelling purpose and that the law is narrowly tailored or the least restrictive way to achieve that purpose.[43] The purpose of PMLA is to prevent money-laundering and to confiscate related property. § 50 doesn’t serve a compelling purpose and that the impugned section is not narrowly tailored or the least restrictive way to achieve that purpose.

The ‘direct and inevitable effect’ test of impugned law is applicable.[44] § 50 qualifies the test as there are such effects on the privilege against self-incrimination because § 50 categorically uses the expression “bound to state the truth” that prima facie amounts to compulsory testimony. The impugned section also doesn’t qualify the “reasonableness test” as the section imposes restrictions that completely contravenes fundamental rights.[45] Constitutionality of statute can be determined with reference to changed societal perceptions and ancillary changes that speak to a provision’s legitimacy of purpose or need.[46]

The invalidity arises from the probability of the misuse of the law to the detriment of the individual.[47] In determining the constitutionality of a provision, the court must weigh the real impact and effect thereof, on the fundamental rights.[48]“In judging the Constitutional validity of the Act, the subsequent events, namely, how the Act has worked out, have to be looked into.”[49] Further, any remote or fanciful connection between the impugned law and the public order shouldn’t be sufficient to sustain its validity.[50] S. 50 gives a blanket power to the officers that can result in arbitrary use of power.

The “void for vagueness” principle which applies to invalidate irredeemably ambiguous statutory provisions is applicable here as the phrase “bound to state the truth” in the § 50 of the PMLA leads to a substantive vagueness regarding what is truth and does the bound amounts to compulsion or not.[51]

§ 50 of PMLA violates Art. 20 (3) as the right to silence and the right not to incriminate oneself, are generally recognized international standards.[52] The right not to incriminate oneself is primarily concerned with respecting the will of an accused person to remain silent.[53] Art. 11 of UDHR, Art. 14(3) (g) of ICCPR and other international instruments safeguard this right.

In order to establish that the § 50 of the PMLA infringes Art. 20 (3), three conditions must be proved, firstly, that the person who is made to make the statement u/s 50 is “accused of any offense”, secondly, that the statement made S. 50 amounts to “testimonial compulsion”, and lastly, to be a witness against oneself.[54]

The first condition is that “Person must be an accused of an offense”. The word ‘accused’ means different things at different points in time.[55] Formal accusation relating to the commission of an offense is “sufficient” to attract the protection under Art. 20(3), however, this didn’t preclude an extension of the right under Art. 20 (3), but only provided some sort of minimum,[56] ergo, the formal accusation doesn’t exclude the informal accusation. The formal accusation must also be one that normally may result in prosecution.[57]

An accused has the right to silence if the questions were likely to expose him to guilt, before and during the trial.[58] A liberal interpretation of the expression “any person” and “all person” u/s 50 should include person accused. It makes no sense to require a formal accusation when the ED itself is leveling allegations. CrPC allows arrests and investigations without mandating an FIR,[59] so it shouldn’t be the sine qua non to trigger Art. 20 (3). ECIR shall be considered parimateria to FIR.

The second condition is “Testimonial compulsion”. In order to be in violation of Art. 20 (3), § 50 of PMLA must be of such a character that by itself it should have the tendency of incriminating the accused, if not also of actually doing so.[60] The expression “bound to state the truth” makes it a prima facie case of testimonial compulsion as the officer-in-charge takes the natural meaning of the expression and apply therefor.

The “effect doctrine” would not come in the category of the exercise of power, i.e. use or abuse of power but in the compartment of direct effect and inevitable result of a law that abridges the fundamental right.[61] § 50 would have a direct chilling effect on the privilege against self-incrimination as the impugned section is bound to arbitrary use.

Argumentum a fortiori, § 50 permit officers to question persons, and a refusal to answer questions is an offense which can be met by the prosecution. Ergo, the threat of prosecution on non-compliance amounts to compulsion.[62] Ergo, it compels a person to be a witness against oneself.

The third essential condition for Art. 20 (3) is to be a “Witness against himself” as Article 20 (3) doesn’t protect an individual from being a witness against himself. The individual must be an accused of an offense to be protected.[63] As other two conditions have been established that § 50 includes “person accused of an offense” and there is “testimonial compulsion”, ergo, §50 compels the accused to be a witness against himself and thus violates Art. 20 (3).

The expression “to be a witness” is inclusive of oral, documentary, and testimonial evidence.[64] U/s 50, a person is “bound to state the truth” and is under threat of prosecution, thus, he’s compelled to be a witness against himself. Further, § 50 doesn’t fall under the exceptions to the Art. 20 (3)[65] as it mandates conveying information based upon the personal knowledge of the person summoned.

Argumentum a fortiori, the author also argues that § 50 has a chilling effect on the Right to Privacy and Personal Autonomy. A conjunctive reading of Articles 20 (3) and 21 of the Constitution along with the principles of evidence law leads us to a clear answer that we must recognize the importance of personal autonomy in aspects such as the choice between remaining silent and speaking.[66]

Concluding Remark

At last, the author argues that the possibility of § 50 being applied for purposes not sanctioned by the Constitution cannot be ruled out. Ergo, it must be held to be wholly unconstitutional.[67] The Doctrine of Severability is not applicable as the section stands in a whole.

To sum up, the researcher is of the opinion that § 50 of PMLA is not contrary to Art. 20 (3) of the Indian constitution and even, in any case, it has a chilling effect, not the whole of § 50 is invalid.

References

[1] Supreme Court Advocates on Record Association v Union of India WP (c) NO.13 OF 2015.

[2] Government of Andhra Pradesh & Ors v P. Laxmi Devi CA 8270 of 2001.

[3] Namit Sharma v Union of India (2013) 1 SCC 745.

[4] Shreya Singhal v Union of India AIR 2015 SC 1523; Subramanian Swamy v Union of India WP (CRL) NO. 184 of 2014.

[5] Namit Sharma v Union of India (2013) 1 SCC 745.

[6] Himanshu Singh Sabharwal v State of Madhya Pradesh (2008) 3 SCC 602.

[7] Maneka Gandhi v Union of India 1978 AIR 597.

[8] Lawrence v Texas 539 US 558 (2003); Namit Sharma v Union of India (2013) 1 SCC 745.

[9] Enforcement Directorate v M. Samba Siva Rao (2000) 5 SCC 431.

[10] Dalmia Cement (Bharat) Ltd. v Assistant Director of Enforcement Directorate 2016 (4) ALD 47.

[11] Kameshwar Prasad & Ors. v State of Bihar & Anr. 1962 Supp. (3) S.C.R. 369.

[12] BEST Worker’s Union v Union of India 2016 SCC OnLine Bom 9279.

[13] Saunders v United Kingdom AIR 2010 SC 1974.

[14] DD Basu Commentary on the Constitution of India, 8th Ed., Vol. 3, p. 2989.

[15] Veera Ibrahim v State of Maharashtra 1976 AIR 1167.

[16] Selvi v State of Karnataka AIR 2010 SC 1974.

[17] Directorate of Enforcement v Deepak Mahajan 1994 SCR (1) 445.

[18] Directorate of Enforcement v Deepak Mahajan AIR 1994 SC 1775.

[19] M.P. Sharma v Satish Chandra AIR 1954 SC 300.

[20] Ramesh Chandra Mehta v State Of West Bengal AIR 1970 SC 940.

[21] M. Shobana v The Assistant Director, Directorate of Enforcement CDJ 2013 MHC 4134.

[22] Abhinav Sekhri, ‘Wither the Right against Self-Incrimination?’ <http://theproofofguilt.blogspot.in/2016/02/wither-right-against-self-incrimination.html> accessed on 05th May 2017.

[23] Poolpandi v Superintendent, Central Excise (1976) 2 SCC 302.

[24] Mark Netto v State Of Kerala (1979) 1 SCC 23.

[25] Shyamlal Mohanlal Choksi v State of Gujarat AIR 1965 SC 1251.

[26] RC Mehta v State of West Bengal AIR 1970 SC 940; Ilias v Collector of Customs AIR 1970 SC 1065.

[27] Abhinav Sekhri, ‘The Right against Self-Incrimination: Re-Defining Minimums’, <http://theproofofguilt.blogspot.in/2016/03/the-right-against-self-incrimination-re.html> accessed on 05th May 2017.

[28] Veera Ibrahim v State of Maharashtra 1976 AIR 1167; RC Mehta v State of West Bengal 1999 (110) E.L (SC).

[29] Directorate of Enforcement v Deepak Mahajan 1994 SCR (1) 445.

[30] CBI v Gondwana Ispat Ltd. CC №01/2016.

[31] CCE v Duncan Agro Industries Ltd. (2008) 13 SCC 305.

[32] G. Radhakrishnan v The Assistant Director, Director of Enforcement W.P. (MD) №11525 of 2014.

[33] Abhinav Sekhri, ‘Detention, Deepak Mahajan, and Self-Incrimination’, <http://theproofofguilt.blogspot.in/2016/03/aprevious-version-of-this-post-appeared.html> accessed on 01st May 2017.

[34] State of Bombay v Kathi Kalu Oghad AIR 1961 SC 1808.

[35] Percy Rustam Basta v State Of Maharashtra 1971 SCR 35.

[36] Abhinav Sekhri, Once a witness, never an Accused?’ http://theproofofguilt.blogspot.in/2014/12/once-witness-never-accused.html> accessed on 05th May 2017.

[37] State Of Bombay v Kathi Kalu Oghad (1962) 3 SCR 10.

[38] H.M. Seervai, Constitutional Law of India, 4th ed., Vol. 2.

[39] Sambhu Nath Sarkar v State Of West Bengal 1974 SCR (1) 1.

[40] Constitution of India Article 13.

[41] Shreya Singhal v Union of India AIR 2015 SC 1523.

[42] Burson v Freeman 504 US 191 (1992); Roe v Wade 410 US 113 (1973).

[43] Kerala Bar Hotels Association & Anr. v State of Kerala & Ors. CA NO. 4157 OF 2015.

[44] Maneka Gandhi v Union of India 1978 AIR 597.

[45] NB Khare v State of Delhi [1950] S.C.R. 519; Mohd. Faruk v State of Madhya Pradesh & Ors., [1970] 1 S.C.R. 156.

[46] Naz Foundation v Govt. of NCT of Delhi WP(C) №7455/2001.

[47] K.A. Abbas v Union of India & Anr. [1971] 2 S.C.R. 446.

[48] Namit Sharma v Union of India (2013) 1 SCC 745.

[49] Charan Lal Sahu v Union of India (1990) 1 SCC 614 (667).

[50] Superintendent, Central Prison, Fatehgarh v Ram Manohar Lohia [1960] 2 S.C.R. 821.

[51] Shreya Singhal v Union of India AIR 2015 SC 1523; A.K. Roy v Union of India (1982) 1 SCC 271; Supreme Court Advocates on Record Association v Union of India WP © NO.13 OF 2015.

[52] Saunders v United Kingdom AIR 2010 SC 1974.

[53] Dalmia Cement (Bharat) Ltd & Ors. v Assistant Director of Enforcement Directorate and Ors. 2016 (4) ALD 47.

[54] Veera Ibrahim v State of Maharashtra 1976 AIR 1167.

[55] Directorate of Enforcement v Deepak Mahajan 1994 SCR (1) 445.

[56] M.P. Sharma v Satish Chandra AIR 1954 SC 300.

[57] Thomas Dana v State of Punjab AIR 1959 SC 375.

[58] Nandini Satpati v P.L. Dani 1978 (2) SCC 424.

[59] Code of Criminal Procedure 1973, S. 154.

[60] State of Bombay v Kathi Kalu Oghad AIR 1961 SC 1808.

[61] Rainbow Trading Co. v Assistant Collector of Customs MANU/TN/0400/1962.

[62] Abhinav Sekhri, ‘The Right against Self-Incrimination: Re-Defining Minimums’, <http://theproofofguilt.blogspot.in/2016/03/the-right-against-self-incrimination-re.html> accessed on 05th May 2017.

[63] Abhinav Sekhri, ‘Once a witness, never an Accused?’ <http://theproofofguilt.blogspot.in/2014/12/once-witness-never-accused.html> Accessed on 05th May 2017.

[64] M.P Sharma v Satish Chandra AIR 1954 SC 300.

[65] Selvi v State of Karnataka AIR 2010 SC 1974.

[66] ibid. Justice K. S. Puttaswamy (Retd.) and Anr. v Union Of India And Ors (2017) 10 SCC 1.

[67] Shreya Singhal v Union of India AIR 2015 SC 1523.

About The Author

Abhishek Kumar, B.A.,LL.B. [2015–20] National Law University, Delhi. This piece was submitted as research paper at the National Law University, Delhi by Abhishek Kumar as part of his academic course.

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