The Hon’ble Supreme Court of India by its recent decision in Sarla Gupta & Another v. Directorate of Enforcement reaffirmed the rights of accused persons under the Prevention of Money Laundering Act, 2002 (“PMLA”) to obtain a copy of the list of all the documents seized during search and seizure, including those not relied upon by the Enforcement Directorate (“ED”). The Court also held that although the PMLA is a special law, its trial process, including summons, procedure, and bail, is governed by the Code of Criminal Procedure (“CrPC”), unless it is inconsistent with the PMLA.

The Court clarified that in proceedings under the PMLA, once cognisance is taken by the Special Court on a complaint filed under Section 44(1)(b) of the PMLA, the Court must issue process to the accused (i.e., summon or warrant). At this stage, the accused must be furnished with a copy of the complaint along with all accompanying documents, including statements under Section 50 of the PMLA and any supplementary complaints. Although Sections 207 and 208 of the CrPC do not formally apply to PMLA complaints, the Court held that their underlying principles of natural justice and fair trial must be followed. Accordingly, the procedural right to receive documents, as contemplated under Section 204(3) of the CrPC (or Section 227(3) of the BNSS), must be recognised as safeguarding the right of the accused’s right to a fair trial.

The Court held that while the accused is not entitled to copies of unrelied documents at the stage of framing of charge, they must be furnished with a list of such documents at the time process is issued. This enables the accused to be aware of all materials in the prosecution’s custody and later seek their production at the appropriate stage of trial. At the defence stage, the accused may apply under Section 233(3) of the CrPC (or Section 256(3) of the BNSS) to summon documents or witnesses, including those in the custody of the prosecution or third parties. This right is particularly important under offences of PMLA, where the accused bears a reverse burden of proof under Section 24 of the PMLA.

The Court emphasised that such procedural rights must be liberally interpreted in favour of the accused, particularly in light of the presumption of guilt imposed under the PMLA, which places an additional burden on the accused to prove their innocence. It further observed that the right to defend includes the right to lead evidence by examining witnesses and producing documents, which forms an integral part of the accused’s fundamental right to a fair trial under Article 21 of the Constitution of India (“Constitution”).

Importantly, the Court also clarified that during bail proceedings under Section 45(1)(ii) of the PMLA, the accused may invoke Section 91 of the CrPC (or Section 94 of the BNSS) to request production of documents not relied upon by the prosecution. Denying access at this stage could prevent the accused from discharging the burden imposed by the bail provision, thereby violating the right to liberty under Article 21 of the Constitution. While the ED may object during a pending investigation on grounds of potential prejudice, the Court must inspect the documents and record reasons before denying disclosure. Once the investigation is complete, such objections cannot be sustained.

In conclusion, the Supreme Court upheld the principle of Audi Alteram Partem, reaffirming the foundational rule of natural justice, ensuring that the accused are not tried or punished without a fair opportunity to know and respond to the case against them. Recognising the stringent presumptions and reverse burden under the PMLA, the Court stressed that procedural laws must be interpreted liberally to ensure the accused have a fair chance to defend themselves, in line with the right to a fair trial under Article 21 of the Constitution.

The observation of the Hon’ble Supreme Court of India in Sarla Gupta & Another v. Directorate of Enforcement, are significant for trials under PMLA, and in line with “Draft Criminal Rules of Practice, 2021”, particularly regarding the obligation of prosecution to provide relied upon documents as also list of seized but unrelied documents to the accused persons.

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