Bombay High Court, in its ruling on Ram Kotumal Issrani vs. Directorate of Enforcement, affirmed the arrest by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) and directed the agency to establish guidelines regarding the timing for recording statements under Section 50 of PMLA. Complying with this directive, the ED issued internal guidelines stipulating that officers should be prepared with necessary documents and questionnaires to expedite the examination of summoned individuals, ideally completing it within the same day or the following day. This rapid processing minimizes opportunities for suspects to transfer or conceal criminal proceeds or tamper with evidence, especially pertinent in money laundering cases where digital transactions allow rapid movement of assets. The circular highlights a humane approach, advising officers to conduct examinations within regular business hours, particularly for elderly, ill, or infirm individuals, and to reschedule as necessary to avoid undue hardship. In exceptional cases, such as where credible evidence indicates a risk of asset dissipation or evidence destruction, officers may extend examinations beyond standard hours. However, such decisions require documented justification and approval from higher authorities, including Deputy or Joint Directors. The guidelines reinforce both efficient investigation practices and procedural safeguards to uphold the rights of individuals under examination.
Enforcement Directorate
PRESS RELEASE 29-10-2024
Division Bench of Hon’ble High Court of Judicature at Bombay vide its order dated 15.04.2024 in the matter titled ‘Ram Kotumal Issrani Vs. Directorate of Enforcement’ bearing Criminal Writ Petition (Stamp) No. 15417 of 2023 while upholding the arrest made by the Enforcement Directorate (ED) under PMLA has directed this Directorate to issue circular/directions, as to the timings, for recording the statements under section 50 of PMLA. In compliance of such directions, this Directorate has issued detailed internal guidelines for the officers inter-alia indicating the timings of recording of such statements.
In the said circular, para 18 deals with the timing of recording of statements under section 50 of PMLA. Para 18 is reproduced as under:
“18. Timing of recording of statement: It is expected from the Authorized Officer that he shall be well prepared with copies of documents to be confronted as well as questionnaire to examine the person summoned at appointed date and time. The Authorized Officer while fixing the date and time of the compliance of the summons should ensure that the person so summoned is taken up for examination on appointed time and date without keeping him waiting for hours. Considering the nature of offence of money laundering where a person is able to dissipate, transfer or conceal the proceed of crime or destroy digital evidence within shortest period of time through online instructions using mobile phone or other digital media (this fact has been acknowledged by Hon’ble Apex Court in case of Vijay Madanlal Choudhary), the Investigating Officer shall endeavour to conclude the examination of the person summoned expeditiously, ideally on the same day or the following day. This approach may minimize the opportunity to the person summoned either to transfer or conceal proceeds of crime or to fabricate make believe and concocted explanations. However, efforts should be made to record statement of person summoned during earthly hours i.e. during office hours rather than stretching it too late at night. In cases of senior citizens, individuals with serious medical condition or individuals who are sick or infirm (subject to verification of medical records or condition), examination of such person should be restricted to earthly hours and it would be appropriate to adjourn the examination to next date or any other mutually agreed date as a matter of practice. However, in exceptional circumstances, for example, where authorized officer has credible information/ material that the person if allowed to leave without completion of examination will either alienate proceeds of crime or destroy evidence or past conduct of person summoned or abscond or may not join investigation, etc., the authorized officer may record the statement beyond earthly hours after recording such reason on case file and taking approval of Deputy/ Joint/ Additional Director concerned.”
