Case Title:
Vijay Madanlal Choudhary v. Union of India
According to the Prevention of Money Laundering Act of 2002, there is no requirement to formally file an Enforcement Case Information Report (ECIR) before taking legal action or opening a criminal investigation against a person involved in a procedure or activity involving the profits of crime, Supreme Court stated in the present case.
Although every FIR recorded by an officer under Section 154 of the Cr.P.C. must be referred to the Jurisdictional Magistrate, the court was evaluating the argument that this procedure is not being followed in ECIR instances. It was argued that the current legal framework allows the ED to detain someone on the basis of an ECIR without providing him with a copy of its contents, which is inherently arbitrary and violates the constitutional rights of the accused. It was argued that Article 21 naturally includes the right of an accused to get a copy of the First Information Report early on and to be aware of the charges.
The bench observed that despite there being no comparable provision in the 2002 Act requiring registration of the offence of money-laundering, the procedure outlined in the CrPC requires the officer in charge of a police station to record the information relating to the commission of a cognizable offence, in accordance with Section 154 of the 1973 Code.
Another question involving ECIR was whether it was required to give a copy of the report to the individual in question when they were being arrested, or at the very least after?
The bench observation on this issue was, “The ECIR may contain details of the material in possession of the Authority and recording 523 satisfactions of reason to believe that the person is guilty of money laundering offence, if revealed before the inquiry/investigation required to proceed against the property being proceeds of crime including to the person involved in the process or activity connected therewith, may have deleterious impact on the final outcome of the inquiry/investigation. So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution. Moreover, the arrested person before being produced before the Special Court within twenty-four hours or for those purposes of remand on each occasion, the Court is free to look into the relevant records made available by the Authority about the involvement of the arrested person in the offence of money-laundering. In any case, upon filing of the complaint before the statutory period provided in 1973 Code, after arrest, the person would get all relevant materials forming part of the complaint filed by the Authority under Section 44(1)(b) of the 2002 Act before the Special Court”.
And finally, the court held that:
In view of special mechanism envisaged by the 2002 Act, ECIR cannot be equated with an FIR under the 1973 Code. ECIR is an internal document of the ED and the fact that FIR in respect of scheduled offence has not been recorded does not come in the way of the Authorities referred to in Section 48 to commence inquiry/investigation for initiating "civil action" of "provisional attachment" of property being proceeds of crime.
Supply of a copy of ECIR in every case to the person concerned is not mandatory, it is enough if ED at the time of arrest, discloses the grounds of such arrest.