The Madras High Court recently addressed the evidentiary value of statements recorded under Section 50 of the Prevention of Money Laundering Act (PMLA), 2002, in a case involving allegations of illegal quarrying by M/s. Olympus Granites Private Limited. The court's observations provide clarity on the admissibility of such statements and their treatment under the Indian Evidence Act, 1872.
Section 50 of the PMLA empowers officers of the Enforcement Directorate (ED) to summon individuals, enforce their attendance, and record statements during investigations. A key issue in this case was whether statements made to ED officers under this provision could be considered admissible evidence, particularly in light of the Indian Evidence Act's provisions regarding confessions made to police officers.
The court emphasized that ED officers are not classified as police officers under the Indian Evidence Act. Consequently, statements made to them under Section 50 of the PMLA do not fall within the ambit of confessions made to police officers, which are generally inadmissible unless made in the presence of a magistrate. This distinction is crucial, as it determines the admissibility of such statements in court proceedings.
Furthermore, the court addressed concerns about the voluntariness of statements recorded under Section 50. It held that whether a statement was made voluntarily or under coercion is a matter to be determined during the trial. Such determinations cannot be made at preliminary stages, such as during discharge proceedings. This approach ensures that the accused has the opportunity to contest the voluntariness of their statements during the trial, where evidence can be thoroughly examined.
In the specific case before the court, the petitioner, S. Nagarajan, a director of Olympus Granites, sought discharge from proceedings initiated under the PMLA. The allegations involved illegal quarrying activities on government land, causing significant loss to the state exchequer. The ED's case relied, in part, on statements recorded under Section 50 of the PMLA.
The bench, comprising Justices G.R. Swaminathan and R. Poornima, delivered a split verdict. Justice Swaminathan found that the Special Court's order of discharge lacked proper reasoning and remitted the matter for fresh consideration. Conversely, Justice Poornima observed that there was prima facie material to proceed against the accused and dismissed the plea for discharge.
This divergence in judicial opinion underscores the complexity of interpreting the evidentiary value of statements under Section 50 of the PMLA. While acknowledging that such statements are not covered by the Indian Evidence Act's restrictions on police confessions, the court also recognized the necessity of assessing their voluntariness during the trial phase.
The Madras High Court's observations align with broader judicial interpretations across India. For instance, the Delhi High Court has held that confessional statements of co-accused under Section 50 of the PMLA are not substantive pieces of evidence and can only be used for corroboration. Similarly, the Supreme Court has emphasized the need for caution when considering statements made by individuals in custody, highlighting the potential for coercion and the importance of fair trial standards.
In conclusion, the Madras High Court's ruling reinforces the principle that statements recorded under Section 50 of the PMLA are admissible, given that ED officers are not deemed police officers under the Indian Evidence Act. However, the voluntariness of such statements remains a critical factor, to be assessed during the trial. This approach balances the investigative powers of the ED with the constitutional rights of the accused, ensuring that justice is administered fairly and in accordance with established legal principles.
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