Institute of Legal and Management Studies

While refusing to entertain former Chhattisgarh Chief Minister Bhupesh Baghel's challenge to the constitutional validity of Section 44 of PMLA, the Supreme Court today allowed persons aggrieved by violations of 'further investigation' powers of Enforcement Directorate to approach jurisdictional High Courts.

Briefly put, Baghel's petition assailed the Explanation to Section 44 PMLA as per which “the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not.”

He contended that this provision enabled the ED's filing of piecemeal, multiple complaints, one after the other, without permission of the Special Court. Claiming that the practice was prevalent throughout the country, and questioning the ED's powers to file such complaints, Baghel argued that trials were delayed as a result of the practice and it violated right to fair procedure under Article 21 of the Constitution.

The Court however was of the view that there no occasion for Baghel to question the provision (that is, Section 44) as, for violations in individual cases, accused persons have remedy before High Courts. Justice Joymalya Bagchi, in particular, opined that the problem related to 'abuse' of powers by an investigating agency, not the law.

"It's an enabling provision. Problem is not with the law, it's with the abuse. Amendment in the new code carried over to BNSS...the proviso in Section 193(9)...the requirement of judicial oversight is coming because S.173(8) was brought to ensure that investigation concludes in a final report or a police report...this interim police report was never envisaged. In order to avoid the vice of interim police report, S.173(8) was brought in. Now what's happening is, it's not blocking the vice...This is the abuse which has to be seen...It's about breach in individual cases. It's not a constitutional flaw in a legislation", said the judge.

On the explanation to Section 44, Justice Bagchi further said that the provision is 'enabling' in nature and questioned whether an embargo can be placed on investigating agencies' pursuit of truth.

"An investigation is never qua an accused. It's qua an offense. So, there may or may not be incriminating fact. Why 'further investigation' was introduced, it was earlier not there...see the words...the law did not confer any power, but recognizing a residual power in the investigating agency to unravel truth. There can't be embargo in the authorities' pursuit of truth", said the judge to Sibal.

In similar spirit, Justice Surya Kant said that the object behind the power was not that the authority take unauthorized actions. Rather, when used strictly in accordance with law, further investigation can be for the benefit of the accused as well (for instance, he may be ultimately found not involved in the offense).

The order was passed in the backdrop of Sibal highlighting para 263 of the Vijay Madanlal Choudhary judgment which, according to his arguments, held:

(i) The authority (ED) can bring on record further evidence during trial;

(ii) Further evidence can be brought on record with prior permission of the Court;

(iii) ED can either file a fresh complaint or the Court can proceed against such other person under Section 319 CrPC.

"there is no gainsaying that if ED has acted contrary to above-stated principles of law explained by Vijay Madanlal Choudhary judgement, aggrieved person shall be at liberty to approach appropriate forum questioning ED's action. We grant such liberty (to approach High Court) to petitioner as well," dictated Justice Kant.

A bench of Justices Kant and Bagchi was dealing with Baghel's petition for interim reliefs in the Coal 'scam' cases, Liquor 'scam' cases, Mahadev betting app cases, Rice milling cases and DMF 'scam' cases lodged by the Enforcement Directorate, CBI and State Police. The petition further challenged Sections 44, 50 and 63 of PMLA.

Earlier, the Court disposed of as withdrawn two petitions filed by Bhupesh Baghel and his son Chaitanya Baghel. This petition by Bhupesh Baghel sought reliefs in the CBI and State police cases. Chaitanya Baghel's (who was arrested 2 weeks ago) petition, on the other hand, questioned the necessity of his arrest and sought interim bail in the ED case registered in relation to the Chhattisgarh Liquor 'scam'. He further prayed for a relief of no-coercive action in an EoW case and challenged Sections 50 and 63 of PMLA.

The Court gave the duo liberty to approach the High Court for individual reliefs and requested the High Court to provide an expeditious hearing. Chaitanya Baghel was also given liberty to file a separate writ petition before the Supreme Court challenging Sections 50 and 63 of PMLA.

The present petition was re-listed to consider if it called for tagging with the pending cases where PMLA provisions have been challenged (PMLA review batch).

Background

During an earlier hearing, Senior Advocates Kapil Sibal and Mukul Rohatgi, appearing for Bhupesh Baghel, contended that the explanation to Section 44 was allowing ED to commit mischief by endlessly continuing investigation in a matter. Since there is no Magisterial supervision, the ED is able to name additional accused at any time by filing supplementary chargesheets, Sibal argued. This allows the ED to file "piecemeal chargesheets" to get over the default bail provisions, he contended, and to rope in additional accused at any point of time under the garb of "further investigations".

The bench however pointed out that there are judgments in cases such as Vinay Tyagi v. Irshad Ali which mandate Magistrate's nod for further investigation under the corresponding provision in the CrPC [S.173(8)] and said that the principle would apply in PMLA as well. Sibal however countered saying that ED relies on the Explanation to Section 44 PMLA to argue that Magistrate's nod is not necessary. He further claimed that there is a judgment taking view contrary to Vinay Tyagi and emphasized that the issue needs to be settled.

ASG SV Raju, for the respondents, questioned maintainability of Bhupesh Baghel's petition, saying he has not been summoned in any of the cases and there is no FIR/ECIR against him. In reply, Justice Joymalya Bagchi asked the ASG to then make a statement that the ex-CM was not connected to the investigation. When no such statement was forthcoming, the judge commented, "Then you are not clear. We cannot leave a citizen's liberty to...he has a right to challenge". Justice Kant as well added that any citizen can raise a challenge to constitutional validity of provisions.

In closing, the bench was not particularly convinced, as Justice Kant orally commented that Section 44 PMLA is an "enabling provision". In the same spirit, Justice Bagchi appreciated the concern about misuse of provisions and hounding of individuals in certain cases, due to the "plenary" powers conferred, but underlined that that the issue raised did not warrant a "vires" challenge. Be that as it may, the matter was kept today to consider if it called for tagging with the pending petitions where similar issues are raised.

Appearance: Senior Advocates Kapil Sibal, Mukul Rohatgi, S Nagamuthu, Advocates Mayank Jain, Madhur Jain, Arpit Goel and Harshwardhan Parghaniha (for Bhupesh Baghel); ASG SV Raju (for respondent-authorities)

Case Title: BHUPESH KUMAR BAGHEL Versus UNION OF INDIA AND ORS., W.P.(Crl.) No. 301/2025