Sarla Gupta v. Directorate of Enforcement
Supreme Court of India, 7 May 2025, 3 judges, 2025 INSC 645
In PMLA complaint cases the accused must get the complaint, documents produced with it, a list of unrelied documents and copies of records seized from him, and may seek unrelied documents at bail (Section 91) and defence (Section 233).
Facts
Two appeals arose from complaints filed by the Enforcement Directorate under Section 44(1)(b) of the PMLA. In the first, based on a CBI FIR under the IPC and the PC Act, the Special Court refused the accused's application for relied upon documents not supplied, illegible copies and documents collected during the investigation which were said to be suppressed, holding that only relied upon documents need be supplied; the Delhi High Court dismissed the writ petition. In the second, based on a predicate offence under Section 420 IPC, the ED had searched the appellants' premises and seized documents; the Special Court refused to direct supply of copies of the seized documents because investigation was in progress and charges were not framed, and the Punjab and Haryana High Court dismissed the challenge.
Questions before the Court
- Is a person from whom records and documents are seized under Sections 17 and 18 of the PMLA entitled to copies of them?
- Which documents must be supplied to the accused once cognizance is taken on a complaint under Section 44(1)(b) of the PMLA?
- At what stage may the accused seek production of documents in the ED's custody that are not relied upon: at framing of charge, at defence, or at the hearing of a bail application under Section 45?
What the Court held
- When records, or instruments and documents of title, are seized under Sections 17 and 18 of the PMLA, the accused from whom they are seized is entitled to true copies, even if they are not relied upon in the complaint. Soft copies may be given if the documents are bulky.
- On taking cognizance of a complaint under Section 44(1)(b), the Special Judge must direct supply, with the process, of the complaint, any statements recorded before cognizance, the documents (including Section 50 statements) produced with the complaint or till cognizance, and supplementary complaints with their documents. The principles of Sections 207 and 208 CrPC apply.
- A list of statements, documents, material objects and exhibits not relied upon must also be furnished. At framing of charge only documents produced with the complaint or supplementary complaints can be relied on, and ordinarily the accused cannot seek copies of unrelied documents at that stage.
- At the stage of defence, the accused may seek production of documents in the prosecution's custody under Section 233(3) CrPC, which can be refused only on its limited grounds and must be liberally construed because of the reverse burden under Section 24 PMLA; witnesses may be recalled under Section 311.
- At the hearing of a bail application governed by Section 45(1)(ii), the accused may invoke Section 91 CrPC for unrelied documents. While investigation is pending the ED may object on the ground of prejudice, but the Court must see the documents and may refuse only if satisfied that disclosure would prejudice the investigation.
Why it matters
The judgment sets out, stage by stage, the accused's right to documents in PMLA prosecutions: copies of seized records, documents produced with the complaint, the list of unrelied documents, and production of unrelied documents at defence and at bail. It grounds these rights in the fair trial guarantee of Article 21 and links them to the heavy burdens placed on the accused by Sections 24 and 45(1)(ii) of the PMLA.
In the Court's words
Copied from the official judgment; each passage links to its page.
“When the records are seized from the custody of the accused, there is no reason why the true copies of the seized documents should not be provided on an application being made by the accused. The same is the case with the instruments or documents of title forming part of the property seized. If the documents are bulky, even soft copies thereof can be provided. Even if the seized record or documents are not relied upon in the complaint, copies must be supplied, though the accused will not be entitled to rely upon them at the time of framing the charge.”
“But, there is no reason why the principles laid down under Sections 207 and 208 should not be applied to a complaint under Section 44(1)(b) of the PMLA. The provisions are consistent with the principles of fair play. The object of the provisions is to protect the rights of accused persons. An accused is entitled to a fair trial as he has the right to defend himself. That is the essence of Article 21 of the Constitution.”
“Thus, as compared to traditional penal statutes, at the time of trial of the offence under the PMLA, there is a huge negative burden put on the accused. Therefore, it is all the more necessary that sub-section (3) of Section 233 of CrPC (Sub-section (3) of Section 256 of the BNSS) should be liberally construed in favour of the accused.”
“Therefore, at the stage of hearing of a bail application to which stringent provisions of Section 45(1)(ii) of the PMLA are applicable, the accused must be allowed to invoke the provision of Section 91 of the CrPC for seeking production of the documents not relied upon by the ED. But, when the investigation is pending, while permitting the accused to seek production of documents that are not relied upon by invoking Section 91 of the CrPC, care has to be taken to ensure that the investigation is not prejudiced.”
Provisions interpreted
- Section 21, Prevention of Money-laundering Act, 2002
- Section 44, Prevention of Money-laundering Act, 2002
- Section 45, Prevention of Money-laundering Act, 2002
- Section 24, Prevention of Money-laundering Act, 2002
- Section 91, Code of Criminal Procedure, 1973Now: BNSS 94 (NCRB correspondence table)
- Section 207, Code of Criminal Procedure, 1973Now: BNSS 230 (NCRB correspondence table)
- Section 208, Code of Criminal Procedure, 1973Now: BNSS 231 (NCRB correspondence table)
- Section 233, Code of Criminal Procedure, 1973Now: BNSS 256 (NCRB correspondence table)
Related judgments
- Follows Vijay Madanlal Choudhary v. Union of India (2022)“this Court upheld the constitutional validity of this provision, which puts a negative burden on the accused” (page 74)
Case and bench
- Parties
- Sarla Gupta v. Directorate of Enforcement
- Case
- Criminal Appeal No. 1622 of 2022, with Criminal Appeal No. 730 of 2024
- Decided
- 7 May 2025
- Bench
- Abhay S. Oka, Ahsanuddin Amanullah, Augustine George Masih
- Opinions
- Unanimous. Judgment of the Court delivered by Abhay S. Oka, J.
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