“Examining the Implications: Section 50 Summons and the Erosion of Due Process Rights”?

“That no free government, nor the blessings of liberty, can be preserved to any people, but by a firm adherence to justice, moderation, temperance, frugality, and virtue; by frequent recurrence to fundamental principles; and by the recognition by all citizens that they have duties as well as rights, and that such rights cannot be enjoyed save in a society where law is respected and due process is observed.” ~George Mason

Due process of law & its emergence in the USA:

The doctrine of due process of law emerged and gained significance in the United States of America. The doctrine of due process of law has been an integral part of the US Constitution and has emerged as the catalyst in the development of US Constitutional laws. The 5th and the 14th Amendments to the US Constitution read as follows:

“Amendment V:

No person shall be held to answer for a capital or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

“Amendment XIV:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

The said five magical words, “without due process of law” occurring in the 5th and 14th Amendments have allowed the USA to be effectively governed by a Constitution which is more than 200 years old. It has played a pivotal role in effectively maintaining the separation of powers between the executive, legislature, and judiciary. The said expression has made the US Constitution flexible, dynamic, and receptive to social, political, and economic reforms. Over the years, the said expression has empowered the judiciary to curb the majoritarian tendencies of the ruling governments.

The US Supreme Court has crafted several procedural safeguards based on the due process clause. For instance, it has held that the statements obtained from a person while in police custody are not admissible and laid down procedures that would effectively implement the 5th Amendment which prohibits a person from being compelled to be a witness against himself.

The US Supreme Court has developed a ’ fourfold warning’ commonly called a ‘Miranda Warning’, which has to be given to the person who is being subjected to custodial interrogation and failure to do so renders the statements given by the person as inadmissible in court. The four-fold warning consists of the following:

(1) That the person being taken in custody has the right to remain silent.

(2) Anything he says may be used as evidence against him.

(3) That the person has a right to the presence of an attorney during questioning.

(4) If poor, the person has a right to a lawyer without charge.

The said decision ensures that no person’s liberty, even if accused of heinous crimes, is curtailed in violation of due process of law.

History of due process of law in India:

In India, ‘due process of law’ has an interesting and fluctuating history. From straight out rejection of the ‘due process of law’ in A.K. Gopalan vs State of Madras (Gopalan) to its acceptance in Maneka Gandhi vs UOI (Maneka Gandhi) the Constitutional Courts in our country has traveled a significant judicial distance in a very short period.

That the drafting of the Constitution of India was caught under the dilemma of whether to incorporate ‘due process of law’ under the Fundamental Rights chapter of the Constitution or not? Dr. B.N Rau being an integral part of the drafting committee, played a significant role in drafting various provisions of our present Constitution including Article 21, a fundamental right that is embedded and imbibed in almost every other fundamental right guaranteed under Chapter III of the present Constitution.

In a historic meeting, Dr. Rau met Felix Frankfurter J of the US Supreme Court in 1947. Felix Frankfurter is one of the most respected jurists of the US History. He strongly advised Dr. Rau not to include the ‘due process’ clause in the Indian Constitution as the term had no precise meaning and it would introduce an element of uncertainty and empower the judiciary to overturn the laws made by the Legislature which comprises of the representatives elected by the will of the people.

Despite the advice of Felix Frankfurter J, when the draft report was prepared by the Sub-committee of Fundamental Rights, draft clause 12 which was to become Article 21 contained the due process clause and read as follows:

”No person shall be deprived of his life, liberty or property without due process of law nor shall any person be denied the equal treatment.”

However, it was evident from the debates, that the constituent assembly was divided towards the idea of incorporating due process of law. After a lengthy debate, the Constituent Assembly finally decided to delete the “due process” clause and substituted it with the expression “procedure established by law”.

Resultantly Article 15 of the final draft which later became Article 21, read as follows:

“No person shall be deprived of his life or personal liberty except according to procedure established by law.”

Soon after the Constitution of India came into force, the Hon’ble Supreme Court of India was tasked to enforce and adjudicate the fundamental rights in the famous Gopalan case. The case involved a challenge to the preventive detention laws of India. The Petitioner, Mr. A.K. Gopalan who was a leader of the Communist Party of India (CPI), argued that preventive detention laws interfere with the freedoms guaranteed under Article 21 of the Constitution and therefore are required to be declared unconstitutional. However, by majority verdict, it was held that the constitutionality of a law had to be measured by the object and not by the incidental effect the law would have on other freedoms. The Hon’ble Supreme Court of India decisively rejected the application of the due process clause pointing out that as long as a person was detained by the “procedure established by law”, he could not challenge his detention.

It was only in Maneka Gandhi’s case, the doctrine of due process of law was engraved in the Article 21 of the Constitution of India. In the said landmark judgment, the Supreme Court held that the procedure established by law for depriving a person of their life or personal liberty must be fair, just, and reasonable. The term “procedure established by law” in Article 21 was interpreted to mean a procedure that is not arbitrary, fanciful, or oppressive. The court expanded the scope of Article 21, stating that it is not merely a procedural right but includes substantive rights as well.

This judgment marked a significant shift in constitutional interpretation, emphasizing that the state cannot act arbitrarily and must adhere to principles of fairness and justice when depriving an individual of their life or personal liberty. The decision has had a profound impact on the understanding and protection of fundamental rights in India and on recognizing the doctrine of due process of law in India.

Section 50 PMLA, a complete erosion of due process of law:

Now that we understand the meaning and applicability of due process of law in India, it becomes imperative for lawyers, judges, lawmakers, executives, and everyone connected to the present-day legal system to analyze whether a provision of a statute passes the ‘due process test’ or let’s say that every provision of law has to be analyses through a ‘due process lens’.

Analysing Section 50 PMLA from the ‘due process lens’:

The Section 50 PMLA empowers the Directorate of Enforcement to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during any investigation or proceedings under PMLA. The person summoned is bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. Most importantly, every proceeding under subsections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of Section 193 and Section 228 of the IPC, 1860.

It is important to analyze the aforesaid section and the powers which it envisages with the 'due process lens'. It is also imperative to understand the object and the effect of the said provision. The object of the aforesaid section is obviously to facilitate the investigation and empower the investigating officer to conduct fluid and rapid investigation and collect evidence to further the conclusion of the proceedings, i.e. both attachment proceedings/adjudication and criminal prosecutions.

My experience and conclusion:

Since the inception of my practice, I have predominantly dealt with ED prosecutions. In my experience, the summons issued under Section 50 is the most abused power vested in the officers of the ED. No doubt, that the object of the Section is to facilitate the investigation and consequently to curb money laundering in the country, however, the approach adopted by the Directorate of Enforcement to implement the said objective is arbitrary and completely erodes the due process of law. It is important to understand that the said provision is not novel to the PML Act, the similar provision of recording a statement under oath and using it as evidence during trial exists in other statutes, for example, the Customs Act, Companies Act, etc, however, none of the other investigating agencies, in my opinion, has misused the most important powers which were vested upon them to conduct investigation like ED.

The section itself invites the arbitrariness and vagueness of a Section 50 Summons. There are two inherent flaws in Section 50 PMLA. Firstly, the said section empowers the ED to summon any person without intimating the persons in what capacity they are being called to join the investigation, that is to say, whether the person is being called as a witness or as an accused. Therefore, the person being summoned is totally at sea and at the mercy of the concerned officers of ED who at all times have the lever to change the character of a person from a witness to an accused.

Therefore, the person being summoned has no safeguard from self-incrimination, as at the time when the person is summoned, he does not attain the character of an ’accused’. The statements tendered by him, no matter if it is coerced out of him/her, can be used against the said person as 'evidence’. The part which surprises me the most is the fact that the character of a person does not even change when the person is “arrested” and is under ”custody”. The said person is still not considered to be an “accused” and statements tendered by the said person whilst being in custody are considered to be admissible despite it being self-incriminatory and the same can be used against the said person during the trial or for the matter to oppose his bail petitions. Further, the person, even when in custody and being interrogated in the most hostile environment as one can imagine is not allowed to have a lawyer’s presence.

[Note: In a recent decision, wherein, I filed a Writ Petition challenging a summon issued under Section 50 PMLA, the Hon’ble Court has concluded that a person under PML Act only attains a character of an accused, once a Prosecution Complaint has been filed against him; Refer: Ashish Mittal vs Directorate of Enforcement (2023 SCC OnLine Del 6678)]

The said practice, in my personal opinion, completely erodes the ‘due process of law’ and renders Article 20(3) and Article 21 of the Constitution of India only having a mere ornamental value. No matter how important the object of the legislation is, it is imperative that the said object is met by keeping alive the principles of natural justice and the soul of our Indian Constitution. As history has witnessed, the Indian Judiciary has always been courageous and strong in curbing legislative excess and examining, balancing, and rectifying laws that go against the doctrine of due process of law and I strongly believe that the Hon’ble Apex Court of our country in the near future will use its ’mighty pen’ to serve justice and put to an end the ongoing misuse of executive powers under the guise of provision of PML Act.