Investigation under Money-Laundering Act and Final Report

The term ‘investigation’ has not been defined in the Money-Laundering Act but it has been defined in the Code. With reference to the said definition of the term ‘investigation’ appearing in the Code, it was contended on behalf of the Enforcement Directorate that the investigation as defined in the Code, only includes the proceedings for the purpose of collection of evidence conducted by the police officer and does not include submission of final report, which is provided u/s 173 of the Code.

13. It is true that the term ‘investigation’ has not been defined in the Money-Laundering Act, but the said term has been defined under the Code, as quoted below:

(h) “investigation” includes all the proceedings under this Code for the collection of evidence conducted by a police officer or by any person (other than a Magistrate) who is authorised by a Magistrate in this behalf;

14. The question as to whether the term ‘investigation’ shall include submission of Final Form or not, has been set at rest by the Supreme Court in the case of H.N. Rishbud and Inder Singh Vs. The State of Delhi, . The relevant finding of the Supreme Court in paragraph 5 of the judgment is quoted below:

Thus under the Code investigation consists generally of the following steps: (1) Proceeding to the spot, (2) Ascertainment of the facts and circumstances of the case, (3) Discovery and arrest of the suspected offender, (4) Collection of evidence relating to the commission of the offence which may consist of (a) the examination of various persons (including the accused) and the reduction of their statements into writing, if the officer thinks fit, (b) the search of places or seizure of things considered necessary for the investigation and to be produced at the trial, and (5) Formation of the opinion as to whether on the material collected there is a case to place the accused before a Magistrate for trial and if so taking the necessary steps for the same by the filing of a chargesheet u/s 173.

15. Similar view has also been expressed by the learned Single Judge of Orissa High Court in the case of Smt. Sabita Praharaj Vs. Smt. Gitarani Praharaj and Others, .

16. Section 173 of the Code makes it obligatory on the part of the’ Officer in charge to submit the report of completion of investigation before the concerned Court. Section 173(2) of the Code provides that as soon as the investigation is completed, the Officer in charge of the police station, shall file a report in the form prescribed by the State Government giving certain information as indicated in the said provision including nature of the information and as to whether any offence appears to have been committed and if so, by whom. It will also include filing of the final report, if no material is found during investigation for submission of a charge-sheet. It will not be out of place to say that when an investigation is conducted in respect of scheduled offences and no material is found to support the allegations during the investigation, Final Form is also submitted u/s 173 of the Code. Therefore, there is no reason why the term ‘investigation’ shall not include submission of final report when in course of investigation no material is found against the accused for submission of the charge-sheet.

17. Apart from above, it can never be the intention of the Legislature while legislating the Money-Laundering Act to empower the Directorate of Enforcement to sit over the records when after investigation no material is found in respect of the offence alleged under the said Act against an accused keeping the public, the complainant and most importantly the Court in dark regarding nature and extent of investigation and outcome thereof. Lack of judicial scrutiny, coupled with lack of transparency would confer too excessive a power/discretion upon the Director of Enforcement. Judicial scrutiny under Article 226 would also not be of any help when the petitioner has no access to the nature, manner and extent of investigation by the Directorate. We cannot overlook the fact that generally persons engaged in money laundering are likely to be rich and powerful. This should not be seen as doubting the personnel presently serving in the directorate, but then there would be others who would occupy these positions in future.

18. For avoiding undesirable consequences it is open in statutory interpretation to read it down or read it wide. However, we are of the view that Section 65 of the Money-Laundering Act takes care of such a situation and the Enforcement Directorate is duty bound to submit final report or charge-sheet, as the case may be, before the Court which is designated as Special Court by the Central Government in consultation with the Chief Justice of the High Court u/s 43 of the Money-Laundering Act. In the present case, admittedly after completing investigation the Enforcement Directorate has not filed the final report on the ground that there is no provision for submission of the final report under the Money-Laundering Act. Since we hold that the term ‘investigation’ shall also include submission of final report as defined in the Code, we direct that if the process is issued by the Magistrate or upon a further investigation a charge-sheet is submitted in respect of any scheduled offence, the Enforcement Directorate will submit the Final Form before the designated Court so that the designated Court shall be in a position to examine the efforts made by way of investigation, the evidence collected during the investigation and find out as to whether the final report was justified or not. The complainant shall also get an opportunity to look into the report and submit a protest petition, if he desires. We therefore, dispose of this writ petition directing the Enforcement Directorate, in case of contingencies given above, to submit Final Form before the designated Court within 2 months from the date of knowledge of the same.


Source :

(2013) 6 ADJ 672 : (2013) 3 UPLBEC 2239

ALLAHABAD HIGH COURT

( Before : Sushil Harkauli, J; N.A. Moonis, J; L.K. Mohapatra, J )

SHIV KANT TRIPATHI  Vs. STATE OF U.P. AND OTHERS 

Criminal Misc. Writ Petition No. 4909 of 2010

Decided on : 01-08-2013