The right to remain silent: A guide to being a civil witness under PMLA

A famous feature of almost all legal dramas set in the US is the “Right to Remain Silent”, part of the Miranda Rights and rights under the Fifth Amendment. In India, this feature is available to the citizens by way of Article 20(3) of our Constitution. It is further reinforced by one of the most notable cases in Indian Criminal Jurisprudence—D.K. Basu v. State of West Bengal. However, there is one key difference: In India, the right against self-incrimination is limited only to criminal cases; in the US, it is available both as a civil and criminal remedy.

A panoramic view of Article 20(3) states “no person accused of any offence shall be compelled to be a witness against himself.” According to the wording of the clause, the protection of this clause is limited only to criminal proceedings. Therefore, under civil proceedings, a person cannot refuse to answer a question using the defence of Article 20(3).

It is pertinent to note that the protection under Article 20(3) is not available to a person who is being interrogated under the Customs Act, 1962, or Foreign Exchange Management Act, 1999, since the person is not “accused of an offence” and isn’t entitled to a lawyer. The provisions of Article 20(3) only come into effect once the person is placed in the position of the accused.

Moreover, keeping in mind the principle of Occam’s Razor, this protection is not extended to civil cases as using it in civil cases may protect the individual from further proceedings which may be criminal in nature, as is seen one too many times in cases involving economic offences such as the Prevention of Money Laundering Act, (PMLA).

But does that mean that the individual has no defence available under Article 20(3)? The Supreme Court has time and again interpreted the scope of Article 20(3). In State of Bombay v. Kathi Kalu Oghad (Supra), the court held that it must be shown that the person was compelled under duress to make a statement resulting in the incrimination of the accused. If mentioned voluntarily, the person is not protected by Article 20(3). They also mentioned that a person is liable to answer a question if the probability of incrimination is not possible. Incrimination is defined as the “tendency of making the guilt probable”.

The next question before the apex court was whether this protection extends to the witnesses or simply the accused. In the landmark judgement of Nandini Satpathy v. P.L. Dani, the court held that if the “witness’ can reasonably sense the peril of his prosecution, he gains the privilege of remaining silent”. The court proceeded to observe that a police officer is a “person in authority”. Compelling a person to answer a question within the limits of the police station may result in the violation of Article 20(3).

Now, the question arises whether this interpretation extends to officers of the Enforcement Directorate (ED).

Money Laundering is a serious offence with a broad possibility of evasion of responsibility. Under the PMLA, the ED may issue summons to anyone necessary for the investigation with the burden of proof being on the accused to prove his non-involvement in the offence. The reason for this sharp diversion from jurisprudential principles lies in the very nature of the offence being investigated under the PMLA, i.e. money laundering. An involved party is likely to have more information regarding the offence, than the authorities. However, just as the coin has two sides, this provision too can knowingly or unknowingly be misused.

Such a person may be perturbed or even scared to receive summon under such an Act. In the mind of the individual, the acts for which they are being questioned might be simple business transactions with no relation to money laundering. Any answers to these questions have the capability of incriminating themselves for the offence.

Some complications also arise because of the different procedures followed by the ED. In a typical criminal proceeding, formal records begin with the police registering a First Information Report, or FIR. In ED Investigations, this formal record is called Enforcement Case Information Report, or ECIR. The ED has exclusive jurisdiction of offences under PMLA, which bars a police investigation. Moreover, the Andhra Pradesh High Court observed in the case of Dalmia Cement (Bharat) Limited and Ors v. Asst. Director of Enforcement Directorate and Ors that a person cannot be termed as an accused during the registration of the ECIR since there is no magisterial intervention, unlike an FIR.

In the recent judgement of Vijay Madanlal Choudhary v. Union of India, the Supreme Court has elucidated in no uncertain terms, the protection of Article 20(3) in ED investigations. The same is explained as follows:

Under the PMLA, the authorities are authorised to summon any person for the collection of information and not necessarily to conduct a criminal prosecution. Their main objective is to ascertain the facts of the case. There are no formal proceedings against the witness in question. Under the Act, even normal witnesses with no role in the actual act can receive summons. Therefore, he cannot claim the protection of Article 20(3) since no formal accusation was levied at the time of questioning. Although, the court noted that statements recorded after a formal arrest by the ED official may come under the protection of Article 20(3).

According to the court, the objective of the PMLA and the responsibility of the officials are to prevent and punish people for the offence of money laundering. It contains stringent provisions to crack down on this offence and compels financial institutions to preserve records of transactions in case of an investigation. On the other hand, the responsibility of a police officer is to maintain law and order through the prevention and detection of crimes. While the officers in the ED are primarily concerned with the act of money laundering rather than the offender in question.

As stated, the ECIR is an internal report of the ED and is not admissible at any point in the actual trial. It is a record to identify parties of interest in the case and is used as a prerequisite to the establishment of formal charges and hence, is not liable to be shown to the impugned party. Mere registration of the ECIR is not enough to put a person in the character of the accused.

To conclude, Article 20(3) does not provide blanket protection to witnesses being questioned by officials of the Enforcement Directorate. The provisions of Article 20(3) come into effect only after formal arrest. The Supreme Court has separated witnesses from the protection of Article 20(3) in Vijay Madanlal Choudhary v. Union of India. The principles of previous Supreme Court judgements can be applied to the questioning by ED officials only on the basis of circumstances.