The Delhi High Court ruling on the Sanjay Jain v Enforcement Directorate case holds significant implications for money laundering proceedings under the Prevention of Money Laundering Act (PMLA). Justice Vikas Mahajan’s pivotal statement emphasized that the court cannot solely rely on the confession of a co-accused to establish guilt, asserting the need for substantial corroborative evidence.
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DELHI: The Delhi High Court has clarified the bounds of admissibility for confessions in money laundering cases, marking a pivotal moment for legal proceedings under the Prevention of Money Laundering Act (PMLA).
Justice Vikas Mahajan underscored a critical legal principle stating:
“The court is not permitted to base its determination of guilt solely on the confession of a co-accused.”
This statement sets the tone for understanding the court’s approach toward the treatment of confessions in the context of co-accused individuals. The judgment emphasizes that a confession by one accused cannot directly implicate another without substantial corroborative evidence.
Expanding on this, Justice Mahajan elaborated:
“Therefore, it is imperative to note that the confessional statement provided by a co-accused under Section 50 of the PMLA holds a status of non-substantive evidence. Its admissibility is confined to the role of corroboration, serving to reinforce other evidentiary elements and instill confidence in the court’s determination of guilt.”
This clarification delineates the limited scope of such confessions, highlighting their role as corroborative rather than conclusive evidence.
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The court further clarified the nature of proceedings under Section 50 of the PMLA, stating:
“The proceedings under Section 50 of the PMLA may be recognized as judicial proceedings for the specified purposes outlined in the Act. However, it is essential to elucidate that a confession made by an accused in their statement under Section 50 of the PMLA does not attain the status of a judicial confession.”
Addressing the absence of specific provisions in the PMLA for the admissibility of a co-accused’s confession, the court noted:
“The Prevention of Money Laundering Act (PMLA) lacks a provision akin to Section 15 of the Terrorist and Disruptive Activities Act, 1987 (TADA) or Section 18 of the Maharashtra Control of Organised Crime, 1999 (MCOCA), which expressly renders the confession of a co-accused admissible against other accused under specific circumstances.”
This comparison with other laws underscores the unique treatment of confessions within the PMLA framework.
Justice Mahajan further explained,
“Consequently, the consideration of a confession made by an accused against a co-accused, abettor, or conspirator jointly charged and tried in the same case mandates the application of Section 30 of the Evidence Act. The expression ‘the court may take into consideration such confession’ within Section 30 implies that the confession made by the accuser against the co-accused should be treated as a corroborative piece of evidence.”
This interpretation aligns with the broader legal principles governing the admissibility of evidence.
The backdrop of this legal discourse was the court’s decision to grant regular bail to Sanjay Jain, accused in the IFFO money laundering case. The allegations against Jain and others involved a conspiracy to defraud shareholders and the government by importing fertilizers and other materials at inflated prices between 2007 and 2014.
In its detailed judgment, the court also touched upon the procedural aspects, stating:
“The statements recorded under Section 50 of the PMLA are part of a proceeding deemed judicial and are admissible as evidence. However, their thorough examination is reserved for the trial court during the trial process. At the bail stage, it is inappropriate to conduct a mini-trial.”
This emphasizes the procedural caution required in handling such statements.
Moreover, the court highlighted the importance of evaluating the statements recorded under Section 50 of the PMLA at the bail stage, noting:
“Meaning thereby, the statements under Section 50 of the PMLA have to be taken at their face value, but in case any such statement is patently self-contradictory or two separate statements of the same witness are inconsistent with each other on material aspects, then such contradictions and inconsistencies will be one of the factors that will enure to the benefit of the bail applicant whilst ascertaining the broad probabilities.”
Concluding the judgment, the court found “reasonable grounds for believing that Jain is not guilty of the offence and that he is not likely to commit any offence while on bail,” leading to his release.
Sanjay Jain received legal representation from Senior Advocates Dayan Krishnan and Siddharth Aggarwal, assisted by a team of advocates. On the other side, the Enforcement Directorate was represented by Special Counsel Zoheb Hossain, along with advocates Vivek Gurnani and Baibhav.
CASE TITLE: Sanjay Jain v Enforcement Directorate
