ED can’t base case solely on co-accused’s statement: SC
New Delhi: The Supreme Court established a significant precedent for money laundering cases, stating that the Enforcement Directorate (ED) cannot initiate proceedings based solely on statements from co-accused individuals. This decision came as part of a judgement granting bail in a high-profile money laundering case.
The division bench, comprising Justices BR Gavai and KV Viswanathan, emphasised that incriminating statements from co-accused do not constitute substantive evidence. “The prosecution cannot start with such a statement to establish its case,” the bench observed, reinforcing the principles laid down in Section 30 of the Evidence Act.
The court’s ruling came during the bail hearing of Prem Prakash, an accused in a money laundering case. Notably, Prakash was not initially named in the Enforcement Case Information Report (ECIR). The bench scrutinised the ED’s reliance on co-accused statements and found them insufficient to implicate Prakash under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA).
Justice Gavai and Justice Viswanathan stressed the importance of marshalling independent evidence before considering co-accused statements. They cited the 1952 case of Kashmira Singh vs. State of Madhya Pradesh, which established the principle of first examining evidence against the accused without considering confessions. “Independently, the statement of Afshar Ali does not prima facie indicate anything about the role of the appellant in the forgery of sale deed and other documents or being involved in the offence of money laundering,” the court noted, referring to one of the co-accused statements.
In a significant move, the court also ruled on the admissibility of statements made by accused persons while in custody. It declared that statements given by an accused under custody in one PMLA case, incriminating themselves in another PMLA case, would be inadmissible as evidence.
The bench reasoned: “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.”
Furthermore, the court emphasised that a person in judicial custody cannot be summoned for statement recording without the court’s permission.
This observation aligns with the constitutional right to life and personal liberty under Article 21, which mandates that any procedure established by law must be reasonable and valid.
