In a landmark ruling on Wednesday, August 28, the Supreme Court determined that a statement made by an accused while in custody under the Prevention of Money Laundering Act (PMLA) to Enforcement Directorate (ED) investigators, which implicates the accused in a separate money laundering case, cannot be admitted as evidence.

The Court ruled that a statement given by an accused while in custody cannot be considered admissible under Section 50 of the Prevention of Money Laundering Act (PMLA). A bench of Justices BR Gavai and KV Viswanathan delivered this important judgment while granting bail to an accused in a money laundering case. The bench observed that while the accused was in custody related to one Enforcement Case Information Report (ECIR), the ED officers recorded his statements in connection with a different ECIR.

The bench examined the critical question of whether statements recorded by the investigating agency in a new case, while a person is already in judicial custody or in custody for a different case investigated by the same agency, would be admissible under Section 50 of the Prevention of Money Laundering Act (PMLA). This consideration specifically addressed whether such statements, which allegedly contain incriminating material against the individual, can be used as evidence when the arrest in the new case has not yet been formally recorded.

The bench observed that the three-judge bench judgment in *Vijay Madanlal Choudhary v. Union of India* (2022) held that statements recorded by Enforcement Directorate (ED) officers under Section 50 of the PMLA are admissible as evidence. However, the same judgment also emphasized that whether the protection under Section 25 of the Indian Evidence Act, 1872—which renders confessions made to the police inadmissible—applies to an accused facing prosecution under the PMLA must be determined on a case-by-case basis.

Justice Viswanathan, in delivering the judgment, stated that the bench has expanded on this principle and made reference to Justice VR Krishna Iyer's judgment in the *Nandini Satapathy* case, particularly concerning the state of mind of a person in custody. This reference underscores the bench's consideration of the psychological pressures faced by an individual while in custody, building on established legal principles regarding the admissibility of statements made under such circumstances.

The bench noted that the judgment in *Vijay Madanlal Choudhary* required them to consider a crucial question: Is it reasonable to infer that, due to the appellant's vulnerable position and the investigating agency's dominant position—stemming from the appellant's arrest in a separate proceeding—a conducive atmosphere existed for obtaining a confession? This inquiry was essential in determining whether the circumstances under which the confession was made could have unduly influenced the appellant's statement, thereby impacting its admissibility.

"We certainly feel think so. The question is not whether it actually happened, the question is could it have been possible," the bench answered the query.

The judgment authored by Justice Viswanathan, after examining precedents and acknowledging the risks associated with admitting such statements, concluded that:

"We have no hesitation in holding that when an accused is under custody under PMLA, irrespective of the case of which he is under custody, any statement under Section 50 to the same investigating agency is inadmissible against the maker. ''

The Court further held that a person in judicial custody, being restricted in their freedom, cannot be summoned by the Enforcement Directorate (ED) directly. Instead, the ED must obtain permission from the Court that has remanded the individual in the other case before recording any statements from the accused.

On the facts of the case, the Court held that the accused's statement was barred by Article 20(3) of the Constitution, as it was made while the accused was in judicial custody due to another proceeding initiated by the same investigating agency.

"It would be a travesty of justice to render the statement admissible against the appellant," the Court held. The Court said that the accused cannot be told that while giving the statement, he was wearing the hat of the other case and not the present case.

The Court held that the appellant's statement made under Section 50 of the PMLA cannot be used in the present Enforcement Case Information Report (ECIR), even though the appellant was in custody in connection with another ECIR.