Article by Sidhant Dhingra, Advocate, Supreme Court of India and Delhi High Court,Partner & Head of Criminal Laws Division, Sidhant Dhingra & Associates, Advocates, India
The nature of the power of seizure contemplated under the provisions of CrPC is drastic and exercise of such powers is likely to have severe adverse effects on the person concerned thus, the parliament in its wisdom did not confer upon the Enforcement Directorate, any powers to attach or freeze assets on a mere suspicion. The Authorities cannot bypass the legislative intent using the tool of arbitrary discretion, and need to abide by the legislative wisdom behind a particular provision.
The Supreme Court in the case of Innoventive Industries Ltd. v. ICICI Banklaid down the test for determining if there is repugnancy between two statutes by finding out whether one of the statutes has adopted a plan or a scheme, which will be hindered or obstructed by giving effect to the other statute. The court while explaining how the provisions of CrPC were inapplicable for seizing the property for the offence of money laundering, cited inconsistencies on two grounds:
Further it is settled law that provisions of the PMLA are inapplicable, if any property has been acquired before the enactment/ coming into force of PMLA. However, Delhi High Court in the case of Abdullah Ali Balsharaf v. Directorate of Enforcement held if any property that is derived or obtained from any criminal activity relating to a scheduled offence is held outside India, then a property of an equivalent value held in India, would also fall within the scope of expression of 'proceeds of crime' u/s 2(u) of PMLA. Irrespective of date of acquisition.
Further too, The Delhi High Court in the case of Abdullah Ali Balsharaf v. Directorate of Enforcementdealt with the inconsistency between S. 109 of CrPC and S. 17(1A) of PMLA where the ED seized the assets of the petitioner u/s 102 of CrPC. S. 65 of PMLA states that:
The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, insofar as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act.
Further in this particular case the Delhi High court dealt with two important questions as well.
Sidhant Dhingra (Advocate) M-9650677902, 011-35745550.
1. Abdullah Ali Balsharaf and Ors. v. Directorate of Enforcement, MANU/DE/0051/2019
2. Innoventive Industries Ltd. v. ICICI Bank and Anr, (2018) 1 SCC 407.
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