Confession by PMLA accused to IO not admissible: 3 things Supreme Court held on rights of accused

The Supreme Court on Wednesday held that any incriminating statement given by an accused to an investigating officer while in custody in a money laundering case will not be admissible as evidence [Prem Prakash v Union of India Through the Directorate of Enforcement]..A Bench of Justices BR Gavai and KV Viswanathan further held that the general principle of law that 'bail is rule and jail is exception' applies even to money laundering cases under the Prevention of Money Laundering Act (PMLA).These pertinent observations were made while granting bail to Prem Prakash, allegedly an aide of Jharkhand Chief Minister Hemant Soren, in a money laundering case..The judgment, a shot in the arm for PMLA accused, held the following as regards right of persons accused under the anti-money laundering law:.1. Liberty of the individual is always the rule and deprivation is the exception.The Court held that deprivation of liberty can only be by the procedure established by law, which has to be a valid and reasonable procedure."Section 45 of PMLA by imposing twin conditions does not re-write this principle to mean that deprivation is the norm and liberty is the exception...Article 21 being a higher constitutional right, statutory provisions should align themselves to the said higher constitutional edict," the judgment stated..2. Counter affidavit of the investigating agency should make out a cogent case.Section 24 of PMLA deals with burden of proof and says that when a person is accused of having committed the offence of money laundering, the burden of proving that proceeds of crime are untainted property shall be on the accused.In the Vijay Madanlal Choudhary judgment of 2022, the apex court had held that for invoking Section 24 of PMLA, and to shift the burden of proof on the accused, three foundational facts have to be established by the prosecution:First, that the criminal activity relating to a scheduled offence has been committed;Second, that the property in question has been derived or obtained, directly or indirectly, by any person as a result of that criminal activity; andThird, the person concerned is directly or indirectly involved in any process or activity connected with the said property being proceeds of crime.The Court in its judgment today held that in cases where the public prosecutor decides to oppose the bail application of the accused, the counter affidavit of the investigating agency should make out a cogent case as to how these three facts are prima facie established.It underscored that "it is only thereafter the presumption under Section 24 would arise and the burden would shift on the accused"."The counter to the bail application should specifically crystallize albeit briefly the material sought to be relied upon to establish prima facie the three foundational facts. It is after the foundational facts are set out that the accused will assume the burden to convince the court within the parameters of the enquiry at the Section 45 stage that for the reasons adduced by him there are reasonable grounds to believing that he is not guilty of such offence," the top court made it clear..3. Incriminatory statement given by PMLA accused in custody is inadmissible.The Court today held that a statement given by a money laundering accused to investigating officers of the Enforcement Directorate (ED) incriminating himself, would be inadmissible in evidence.This, the Court said, is because such a person cannot be said to be operating with a free mind."We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker. The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind," the Court said.Such a statement would be hit by Section 25 of the Indian Evidence Act, which operates against such confessions."It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice," the Court emphasised.Hence, such a statement cannot be used against the accused even in another case, the Court said."In the facts of the present case, we hold that the statement of the appellant if to be considered as incriminating against the maker, will be hit by Section 25 of the Evidence Act since he has given the statement whilst in judicial custody, pursuant to another proceeding instituted by the same Investigating Agency. Taken as he was from the judicial custody to record the statement, it will be a travesty of justice to render the statement admissible against the appellant.".Senior Advocates Ranjit Kumar and Siddharth Agarwal along with Advocates Indrajit Sinha, Sneh Singh, Anusuya Sadhu Sinha, Sowjhanya Shankar, Harsh Yadav and Siddharth Naidu, briefed by a team from KSN & Co, appeared for Prem Prakash.Additional Solicitor General SV Raju and Advocates Zoheb Hossain, Annam Venkatesh, Kanu Agrawal, Mrigank Pathak, Aakriti Mishra and Arvind Kumar Sharma appeared for the ED..[Read Judgment]