WHAT IS THE REAL EVIDENTIARY VALUE OF A STATEMENT RECORDED UNDER SECTION 50 OF THE PMLA?

Section 50 gives the Director and other designated officers powers broadly similar to those of a civil court trying a suit, including the power to compel attendance, examine persons on oath, demand production of records, and receive evidence on affidavit. Sub-section (2) allows designated officers to summon any person whose attendance they consider necessary, whether to give evidence or to produce records, during an investigation or proceeding under the Act. Sub-section (3) requires every person so summoned to attend and to state the truth on matters put to them. Sub-section (4) contains the provision that has generated the most litigation: it deems every such proceeding to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code.

This last feature that turns an ED inquiry into a judicial proceeding is what distinguishes Section 50 sharply from ordinary police interrogation under the Code of Criminal Procedure, and it is the reason courts have had to work out, case by case, exactly how such statements should be treated. This piece addresses concerns about the powers of Enforcement Directorate officials to summon individuals and record statements under Section 50 of the PMLA, and, more importantly, how much legal weight those statements actually carry.

Section 50 Is Not the Same as a Police Statement Under the CrPC/ BNSS

The Supreme Court's Constitution Bench in Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929 undertook a detailed comparison between the process under Section 50 of the PMLA and investigation under Chapter XII of the CrPC. The Court held that the investigation contemplated under the PMLA is conceptually different from an investigation under the 1973 Code; the latter is carried out by a police officer, while the former is carried out by specifically designated authorities such as the Director, for the limited purpose of tracing proceeds of crime and preventing money laundering.

Importantly, the Court held that officers under Section 48 of the PMLA are not police officers, and therefore statements recorded by them are not affected by the constitutional protection against self-incrimination under Article 20(3), at least at the stage before a formal accusation has been made. The Court reasoned that Article 20(3) guards against testimonial compulsion once a person stands accused; a person merely summoned as a witness during a preliminary inquiry has not yet reached that stage. However, the Court was careful to note that if a person's statement is recorded after a formal arrest, the protections under Article 20(3) or Section 25 of the Evidence Act may well come into play, and whether such a statement amounts to an inadmissible confession would then need to be examined on the facts of each case.

The Court also explained why the safeguards ordinarily available under Sections 161 to 164 of the CrPC, and under Section 25 of the Evidence Act, safeguards that render statements to police officers inadmissible do not automatically extend to statements recorded under Section 50. Since PMLA authorities are not police officers, and since Section 50(4) creates a specific legal fiction treating these proceedings as judicial in nature, the ordinary CrPC bar does not apply in the same way. The Court further clarified that the PMLA is, in effect, a self-contained code: by virtue of Sections 65 and 71, its provisions prevail over anything inconsistent in any other law, including the CrPC, in matters of arrest, search, seizure, attachment, confiscation, investigation, and prosecution.

This position was reaffirmed by the Supreme Court in Abhishek Banerjee v. Directorate of Enforcement, 2024 INSC 668, which held that Chapter XII of the CrPC, including Section 160, which deals with the power to summon persons for investigation, does not apply in all respects to the investigation of money laundering offences. The Court reiterated that an Enforcement Case Information Report cannot simply be equated with a First Information Report under the CrPC, and that the overriding effect given to the PMLA under Sections 65 and 71 leaves no doubt that its provisions govern, notwithstanding anything inconsistent in the CrPC.

Statements under Judicial Custody are inadmissible in evidence

While Section 50 statements are generally treated as admissible, the Supreme Court has been equally firm that this position cannot be stretched to cover situations where the person making the statement is not, in a meaningful sense, free to do so. In Prem Prakash v. Union of India, 2024 SCC OnLine SC 2270, the Court held that where an accused is already in judicial custody, even in connection with a separate proceeding investigated by the same agency and is taken from that custody to record a statement under Section 50, the resulting statement will be hit by Section 25 of the Evidence Act and rendered inadmissible against its maker. The Court's reasoning was rooted in basic fairness: a person deprived of liberty and produced before the very agency investigating them cannot realistically be said to be making a statement with a free mind. It further held that a person already in judicial custody cannot even be validly summoned under Section 50 without the permission of the court that remanded them, tying this conclusion back to the guarantee of a fair and reasonable procedure under Article 21 of the Constitution.

Evidentiary value of S. 50 in trial, and not in bail

A separate but equally important question is how much evidentiary weight a Section 50 statement should be given, and at what stage of the proceedings. This was addressed comprehensively by the Delhi High Court in Sanjay Jain v. Enforcement Directorate, 2024 SCC OnLine Del 1656. Drawing on earlier decisions, including Chandra Prakash Khandelwal v. Directorate of Enforcement, 2023 SCC OnLine Del 1094 and Manish Sisodia v. Directorate of Enforcement, (2023) 4 HCC (Del) 66, the Court held that while such statements are admissible in evidence, their true weight can only be tested during trial, not at the stage of deciding a bail application. At the bail stage, courts are expected to look only at broad probabilities, and not conduct what would effectively amount to a mini-trial by meticulously scrutinising every contradiction in the material on record. At the same time, the Court cautioned that Section 50 statements cannot be treated as gospel truth; where a statement is self-contradictory, or where two statements by the same witness are materially inconsistent, that inconsistency can work in the applicant's favour when a court is weighing broad probabilities for bail.

Relevance of statement of accused against another co-accused

The Sanjay Jain judgment also dealt with a closely related question: can a confession made by one accused under Section 50 be used against a co-accused? The Court held that such a confession is not a judicial confession in the strict sense, and that the PMLA contains no special provision, unlike certain anti-terror statutes that makes a co-accused's confession automatically admissible against others. Instead, such statements fall to be governed by the ordinary rule under Section 30 of the Indian Evidence Act, which allows a court to consider a proved confession against a co-accused, but only as a matter of corroboration. Relying on the Supreme Court's earlier ruling in Surinder Kumar Khanna v. Directorate of Revenue Intelligence, (2018) 8 SCC 271, and its subsequent reaffirmation in Deepak Bhai Patel v. State, (2019) 16 SCC 547, the Court reiterated that a court cannot begin its reasoning with a co-accused's confession, it must first assess the other evidence on record, and only then, if that evidence is otherwise convincing, turn to the confession for additional reassurance. A confession of this kind, in other words, is never a substantive piece of evidence on its own; it can only support a conclusion already reached on independent grounds.

Conclusion

The strands of this discussion state that the special evidentiary status given to Section 50 statements, while real and significant, comes with equally real boundaries, it does not extend to statements extracted from a person in custody, nor does it entitle a court to treat such statements as conclusive proof without testing them against the rest of the evidence at trial. Taken together, these judgments reflect a judiciary that has consistently sought to hold the machinery of the PMLA accountable to the same standards of fairness and proof that anchor the rest of Indian criminal law.

This article is intended for general informational purposes and summarises publicly reported judicial precedent, and it does not constitute legal advice.