Source: Supreme Court 

Why in News?

Recently, the Supreme Court in the matter of Prem Prakash v. Union of India through the Directorate of Enforcement has held  

• that the statement of the accused which is incriminating would not amount as substantive evidence. 
• That statement of the co accused cannot be used to implicate the accused by the Investigating agencies. 

What was the Background of the Prem Prakash v. Union of India through the Directorate of Enforcement Case? 

• In the present case, The Enforcement Case Information Report (ECIR)was registered for offences punishable under Sections 406, 420, 467, 468, 447, 504, 506, 341, 323 and 34 of the Indian Penal Code, 1860 (IPC) where the appellate was not names as accused. 
• In view of Section 420 and 467 of IPC, being Scheduled Offences, investigation under the PMLA was initiated Even here the appellant was not named though the ECIR did mention certain unknown persons being involved. 
• The Enforcement Directorate (ED) investigated the offence. 
• The allegation was that accused Rajesh Rai illegally and fraudulently made a Power of Attorney in the name of Imtiaz Ahmad and accused Bharat Prasad and on the basis of said Power of Attorney prepared a forged sale deed and sold the land to accused Punit Bhargava, an accomplice of the appellant. 
• It is further alleged that the said land was transferred by accused Punit Bhargava to accused Bishnu Kumar Agarwal vide two sale deeds. 
• It was alleged by the co accused that the appellant, with the help of another accused person Chhavi Ranjan, by influencing the circle officials got the land mutated and hence, according to the prosecution, the role of the appellant is pivotal. 
• The appellant stated that 
  • He knew Bishnu Kumar Agarwal and has met him during Marriage Events. 
  • Punit Bhargava, co accused was like his younger brother who hailed from his native place, and he had known him since childhood.  
  • Persons including Afshar Ali used to visit him for the Cheshire Home property and he introduced him to Rajdeep Kumar and got the property verified.  
  • With the consent of Punit Bhargava, he got the property registered in the name of Punit Bhargava and later it was sold to Bishnu Kumar Agarwal at Rs. 1.78 crore.  
• The co accused, Afshar Ali stated that  
  • He met with the appellant, and he was informed about the disputes and the vigilance of the Police. 
  • The appellant took stock of the status of the land and called the then Deputy Commissioner - Chhavi Ranjan and told him that the registry of the Cheshire Home property was to be done after removing the vigilance observed by the Police.  
  • Thereafter, the appellant fixed the consideration of Rs. 1.5 crores and after accepting the consideration as fixed, he requested the appellant to arrange for unblocking the two plots of land, which were blocked by the Deputy Commissioner Office.  
  • The appellant demanded Rs. 1 crore for the above work and the amount was adjusted in the said consideration and that it was appellant who asked to do the registration in the name of Punit Bhargava.  
  • It was the appellant who fixed the deal with Bishnu Kumar Agarwal. 
• The respondent argued that the statement made by the co accused is substantive evidence against the appellant. 
• The appellant was taken into custody on 11th August 2023. He was already in custody from 25th August 2022. 
• The appellant argued that due to examination of various witnesses he was not granted bail which violates his fundamental rights. 
• Appellant's bail application was rejected by the Special Judge and the High Court.  
• Aggrieved, the appellant filed a Special Leave Petition before the Supreme Court. 

What were the Court’s Observations? 

• The Supreme Court observed that provisions of Section 45 of PMLA which states two conditions to grant bail. 
  • This provision is not an exception to the general rule of bail, it provides twin conditions to be followed before granting bail. 
  • The Supreme Court highlighted the general rule that “Bail is the Rule and Jail is an exception”. 
• The Supreme Court also added 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 statement of the appellant as summarized, taken as it is does not prima facie make out a case of money laundering against him. It also does not point to the involvement of the appellant prima facie in the forgery.   
  • The statement of the co accused against the appellant assuming there is anything incriminating against the appellant will not have the character of substantive evidence.  
  • The prosecution cannot start with such a statement to establish its case.  
  • The Court held that, in such a situation, the law laid down under Section 30 of the Indian Evidence Act, 1872 (IEA) while dealing with the confession of the co-accused will continue to apply. 
• The supreme Court noted that the statement of the co accused, 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. 
• Therefore, The Supreme Court held that 
  • The statement of the appellant in other investigation cannot be used in the present case under Section 50 of PMLA. 
  • 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 in judicial custody, pursuant to another proceeding instituted by the same Investigating Agency. 
  • The statement of the co accused, Afshar Ali’s the Investigating Agency will have to first marshal the other evidence to make it substantive evidence. 
  • The accused in the present case has completed the twin condition given under Section 45 of PMLA. 
• The Supreme Court therefore accepted the petition of the appellant and granted bail. 

What were the Cases Referred in the Prem Prakash v. Union of India through the Directorate of Enforcement Case? 

• Kashmira Singh v. State of Madhya Pradesh, (1952): 
  • Where the court held that “The proper way to approach a case of this kind is, first, to marshal the evidence against the accused excluding the confession altogether from consideration and see whether, if it is believed, a conviction could safely be based on it.  
  • If it is capable of belief independently of the confession, then of course it is not necessary to call the confession in aid.” 
• Vijay Madanlal Choudhary and Ors. v. Union of India and Ors (2022): 
  • Where it was held that if the statement is recorded after a formal arrest by the ED official, the consequences of Article 20(3) or Section 25 of the Evidence Act may come into play to urge that the same being in the nature of confession, shall not be proved against accused. 

What is Substantive Evidence? 

About 

• Evidence is defined under Section 2(e) of Bharatiya Sakshya Adhiniyam 2023 (BSA) as: 
  • All statements including statements given electronically which the Court permits or requires to be made before it by witnesses in relation to matters of fact under inquiry and such statements are called oral evidence. 
  • All documents including electronic or digital records produced for the inspection of the Court and such documents are called documentary evidence. 
• Substantive Evidence:  
  • Evidence which requires no corroboration to prove or disprove the facts in issue is substantive evidence. 
  • This evidence holds enough weight by itself and requires no further inspection. 
  • This could be both circumstantial and direct. 

Evidence held as Substantive Evidence 

• Witness testimony to be considered as substantive evidence based on case-to-case basis. [Bhagwan Singh v. The State of Punjab (1952)]. 
• Admissions are to be considered as substantive evidence. [Bishwanath Prasad v. Dwarka Prasad (1974)]. 
• Photographic evidence or recordings whose reliability is established are considered as substantive evidence. [N. Sri Rama Reddy v. Sh. V. V. Giri in Reference to a Tape (2014)]. 
• Forensic reports are considered as substantive evidence on case-to-case bases.  [Nitish Kumar Murder Case] 
• Expert testimony is considered as substantive evidence that has reasonable backing. [Dayal Singh v. State of Uttaranchal (2012)] 
• Direct evidence is substantive evidence. [Awadh Behari Sharma v. State Of Madhya Pradesh (1956)] 
• Circumstantial evidence directly indicates the commission of the crime is substantive. [Ashok Kumar v. The State Of Madhya Pradesh (1990)]