In a significant ruling reinforcing procedural safeguards under criminal law, the Delhi High Court has held that mere non-compliance with summons issued by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA) is not sufficient to justify the issuance of non-bailable warrants (NBWs). The Court clarified that the mandatory preconditions under Section 73 of the Code of Criminal Procedure (CrPC) must be strictly satisfied before a court can issue such warrants.
The judgment was delivered by Justice Amit Sharma, who set aside NBWs issued against UK-based entrepreneur Sachin Dev Duggal in connection with a money-laundering investigation linked to the Videocon Group bank fraud case.
Background of the Case
The Enforcement Directorate initiated an investigation into alleged money laundering arising out of large-scale bank fraud involving the Videocon Group. In this context, the ED issued multiple summons to Sachin Dev Duggal beginning January 2022 under Section 50 of the PMLA, seeking his appearance for investigation.
Despite repeated summons, Duggal did not appear before the agency. Consequently, the ED approached the PMLA Special Court in Mumbai, seeking issuance of NBWs. However, in February 2023, the Mumbai court rejected the ED’s plea, noting that Duggal was only a “witness” and not an accused, and suggested that the agency could invoke Section 174 of the Indian Penal Code (IPC), which penalises non-attendance to summons.
Undeterred, the ED later approached the PMLA Special Court in Delhi, seeking open-ended NBWs “in aid of investigation”, categorising Duggal as a “suspect” whose alleged non-cooperation was hampering the probe. The Delhi court issued NBWs on February 10, 2023 and subsequently refused to cancel them, prompting Duggal to approach the Delhi High Court.
Legal Issue Before the High Court
The principal issue before the Delhi High Court was whether non-compliance with ED summons under Section 50 PMLA, without formally arraigning a person as an accused or satisfying statutory conditions, could justify issuance of *non-bailable warrants under Section 73 CrPC.
Delhi High Court’s Observations
Justice Amit Sharma examined the scope and applicability of Section 73 CrPC, which empowers courts to issue warrants only in limited circumstances. The provision allows issuance of NBWs only against:
- A person who is a convict,
- A proclaimed offender, or
- A person accused of a non-bailable offence who is evading arrest.
The Court categorically held that mere non-appearance pursuant to ED summons does not automatically bring a person within the ambit of Section 73 CrPC.
“It is no doubt true that non-bailable warrants can be issued against a person who is evading investigation and who may not be formally arrayed as an accused. However, such persons must be projected as a person accused of committing a non-bailable offence and evading arrest for the purpose of Section 73 of the CrPC,” the Court observed.
PMLA Powers Cannot Override CrPC Safeguards
The ED argued that under the PMLA, it has wide powers to summon any person during investigation, even if no formal accusation has been made. While acknowledging the breadth of ED’s investigative powers, the High Court held that *these powers cannot override the essential statutory safeguards enshrined in the CrPC.
Justice Sharma emphasised that procedural requirements under Section 73 CrPC are mandatory, and courts must apply their judicial mind before issuing NBWs. The mere use of terms such as “suspect” or allegations of non-cooperation cannot dilute statutory protections.
Trial Court’s Error Highlighted
The High Court found fault with the approach adopted by the PMLA Special Court in Delhi, observing that it had failed to exercise its powers in accordance with the CrPC. The trial court issued NBWs despite the absence of any finding that Duggal was:
- Accused of a non-bailable offence, or
- Evading arrest in such capacity.
Consequently, the High Court quashed the non-bailable warrants, holding them to be legally unsustainable.
Appearance and Representation
Senior Advocate Mohit Mathur appeared for Sachin Dev Duggal, along with advocates Arshdeep Singh Khurana, Sulakshan S. Vedartham, Khushboo Jain, and Chetan Nagpal.
The Enforcement Directorate was represented by Special Counsel Zoheb Hossain, Panel Counsel Vivek Gurnani, and advocates Kartik Sabharwal, Pranjal Tripathi, Daanish Abbasi, Mahesh Gupta, Navin Kumar, and Ashish Kapoor.
Significance of the Ruling
This judgment is a crucial reaffirmation of due process and personal liberty, particularly in the context of economic offence investigations under the PMLA. It draws a clear line between investigative non-cooperation and statutory grounds for coercive action.
Key takeaways include:
- NBWs cannot be issued mechanically for non-attendance to ED summons.
- Section 73 CrPC prerequisites are mandatory, even in PMLA cases.
- ED must pursue appropriate remedies like Section 174 IPC where applicable.
- Courts must apply independent judicial scrutiny before authorising coercive measures.
Conclusion
The Delhi High Court’s ruling serves as an important reminder that investigative convenience cannot trump statutory safeguards. While agencies like the ED possess extensive powers to probe complex financial crimes, those powers must operate within the constitutional framework of fairness and legality.
By setting aside the non-bailable warrants, the Court has reinforced that liberty-restricting measures must strictly comply with procedural law, ensuring that criminal process is not used as a tool of coercion without legal foundation.
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