“Discovery Rights in PMLA Trials: Supreme Court Enlarges Accused’s Entitlements to Seized & Un-relied Documents”

Discovery Rights in PMLA Trials: Supreme Court Enlarges Accused’s Entitlements to Seized & Un-relied Documents

1. Introduction

In Sarla Gupta v. Directorate of Enforcement (2025 INSC 645) the Supreme Court addressed two sets of criminal appeals arising out of PMLA prosecutions. The central controversy was narrow yet fundamental: What material must the Enforcement Directorate (ED) furnish to an accused – and at which procedural stages – to preserve the guarantee of a fair trial under Article 21?

The Court’s answer recalibrates discovery in money-laundering cases and, by extension, all special statutes that absorb the Code of Criminal Procedure (CrPC). Three fresh rules now stand established:

  1. The accused is entitled to true/soft copies of every record seized from her possession under PMLA search powers (ss.17–18) irrespective of reliance in the complaint.
  2. Upon cognizance the Special Court must serve, along with the summons, (a) the entire complaint, (b) every document annexed or later produced up to cognizance, and (c) a list of all un-relied statements/documents in ED custody.
  3. Section 91 CrPC (summons to produce documents) and Section 233(3)/243(2) CrPC (compulsory process at the defence stage) are fully available to an accused both (i) while resisting the stringent bail bar in s.45(1)(ii) PMLA and (ii) during trial, save where ED satisfies the court that premature disclosure will prejudice an ongoing investigation.

These holdings overturned restrictive High Court views from Delhi and Punjab & Haryana that had confined disclosure to “relied-upon” documents alone.

2. Factual Backdrop & Procedural History

Appeal 1 (Cr.A. 1622/2022)

  • ED filed a complaint under s.44(1)(b) PMLA against Sarla Gupta & others.
  • Special Court provided only select material; applications for remaining relied/illegible/suppressed documents were dismissed on 30 Mar 2019.
  • Delhi High Court affirmed, holding Sections 207–208 CrPC inapplicable to PMLA.

Appeal 2 (Cr.A. 730/2024)

  • During ED searches (s.17), voluminous papers were seized.
  • Adjudicating Authority directed ED to supply copies, but Special Court refused similar relief in the criminal trial. High Court upheld, citing State of Orissa v. Padhi (2005) and permitting only a list of un-relied documents.

3. Summary of the Judgment

  1. High Court orders in both matters are quashed.
  2. ED directed to deliver:
    • (i) complete soft/legible sets of documents forming part of the complaint (within one month);
    • (ii) true copies of every document seized from the appellants (within one month).
  3. The Court lays down binding principles (¶55) governing disclosure, defence process, and bail-stage production of documents in PMLA prosecutions.

4. Analytical Commentary

4.1 Precedents Examined

  1. State Of Orissa v. Debendra Nath Padhi (2005) 1 SCC 568 – Clarified that at the charge-framing stage only the prosecution’s record is relevant. Oka J. distinguishes this, holding Padhi does not extinguish the accused’s later right under ss.233/91.
  2. Criminal Trials Guidelines (In re) (2021) 10 SCC 598 – Introduced Draft Rule 4(i) mandating a list of non-relied material; now adopted and extended to PMLA.
  3. Manoj v. State of MP (2023) 2 SCC 353 – Re-affirmed duty to furnish list of un-relied material; cited as consistent authority.
  4. V.K. Sasikala v. State (2012) 9 SCC 771 & Manu Sharma (2010) 6 SCC 1 – Stress on fair-trial disclosure; applied to hold that suppression of exculpatory evidence cannot stand.
  5. Yash Tuteja v. UOI (2024) 8 SCC 465 – Ruled that ss.200-204 CrPC govern complaints under s.44 PMLA; forms the platform for obligating supply of complaint-annexed documents (s.204(3) CrPC).
  6. Vijay Madanlal Choudhary (2022) 12 SCC 1 – Upheld constitutional validity of onerous s.24 & s.45 PMLA; used by Court to justify a liberal discovery regime as the necessary counter-balance.
  7. Bibhu Prasad Acharya v. ED (2025) 1 SCC 404 – Clarified interplay of ss.65 & 71 PMLA with CrPC; relied upon to hold CrPC provisions apply unless inconsistent.

4.2 Court’s Legal Reasoning

(a) Statutory Harmonisation

Sections 65 & 71 PMLA incorporate the CrPC to the extent of consistency. Since nothing in PMLA directly contradicts ss.91, 204(3), 233–243 CrPC, those provisions must operate in PMLA trials. The Court reads ss.17–21 PMLA search-retention framework alongside Rule 4(2)(4) of the 2005 Seizure Rules to extract an implied right of the person searched to obtain copies of seized records.

(b) Fair-Trial Imperative under Article 21

The bench emphasises that presumption of innocence, equality of arms, and the right to rebut burdens introduced by s.24 and s.45(1)(ii) PMLA are integral to personal liberty. Consequently, disclosure rules must be purposively interpreted to favour the accused.

(c) Stage-wise Matrix of Rights

Procedural StageAccused’s Entitlement (post-judgment)
Immediately after seizure (ss.17–18)True/soft copies of all records/instruments seized; copy of the inventory list for physical property.
Upon cognizance & issuance of process (s.204 CrPC)Full complaint + every annexed or later-produced document + statements under s.50 PMLA + list of all un-relied material.
Charge-framing (ss.226–228 CrPC)May refer only to prosecution material, but list of un-relied items already in hand allows informed objection or later Section 91 application.
Bail application (s.45(1)(ii) PMLA)Accused can invoke s.91 CrPC to summon un-relied documents to discharge bail burden; court may refuse only if premature disclosure demonstrably prejudices an active investigation.
Defence evidence (s.233/243 CrPC)Mandatory issue of process for documents/witnesses unless request is plainly vexatious/delaying.

(d) Limits on Prosecution Objections

ED can resist disclosure during active investigation, yet must place disputed documents before the judge for in-camera scrutiny. After investigation concludes, no such blanket objection survives.

4.3 Potential Impact

  • PMLA trials will now resemble sessions-court trials in ordinary criminal law regarding discovery, diluting ED’s earlier advantage in withholding material.
  • Bail jurisprudence: Defence counsel can marshal documentary evidence early, making Section 45’s twin-tests less insurmountable, likely increasing grant of bail where ED relies on selective filings.
  • Other special enactments modelled on “CrPC-in-so-far-as-not-inconsistent” clauses (e.g., NDPS, UAPA) may see accused citing this judgment to claim similar disclosure. Although context differs, doctrinal foundation in Article 21 could travel.
  • Prosecutorial discipline: ED and investigative agencies must maintain rigorous indices of seized items, anticipate disclosure, and justify any request to withhold material.
  • Court administration: Special Courts will need logistical capacity (scanning, digital vaults) to supply huge datasets; the judgment implicitly promotes e-discovery.

5. Complex Concepts Simplified

Section 91 CrPC
A discretionary power enabling a court to summon any document from any person if production is “necessary or desirable” for an investigation, inquiry, or trial.
Section 233(3) CrPC
Once prosecution evidence closes and the court finds the accused has a case to answer, the accused may compel production of witnesses/documents for defence, and the court must issue process unless the request is frivolous.
PMLA Section 24 (Burden of Proof)
The court must presume the property in question is proceeds of crime; the accused must adduce evidence to rebut this presumption.
Section 45(1)(ii) PMLA (Twin Conditions for Bail)
Bail is barred unless the judge believes there are reasonable grounds that the accused is not guilty and will not re-offend; shifts an initial evidentiary burden onto the accused at the pre-trial stage.

6. Conclusion

The Supreme Court’s judgment in Sarla Gupta is a milestone in discovery jurisprudence. By bridging the gap between general criminal procedure and the distinctive features of money-laundering prosecutions, the Court restores equilibrium between State power and individual liberty. The ruling:

  • Affirms that fair-trial guarantees trump procedural parsimony even under statutes crafted to fight sophisticated economic crimes.
  • Provides a structured, stage-wise roadmap for disclosure, ensuring the defence is never blindsided by selective evidence.
  • Makes the right to liberty under Article 21 meaningful in the PMLA context by easing the evidentiary burden at the bail stage.
  • Signals to investigative agencies that transparency is no longer optional; withholding exculpatory material can jeopardise prosecutions.

Going forward, trial courts, investigators, and defence lawyers alike must internalise the expanded discovery regime. The decision’s real value lies not merely in quashing two interlocutory orders but in cementing a principle: where statutes impose heavier presumptions and burdens, constitutional due-process demands commensurately broader defence rights.

Case Details

Year: 2025
Court: Supreme Court Of India

Judge(s)

HON'BLE MR. JUSTICE ABHAY S. OKA HON'BLE MR. JUSTICE UJJAL BHUYAN

Advocates

YOGINDER HANDOO

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