Money laundering poses a significant threat to society, undermines democratic institutions, and fosters criminal activities and corruption

The international community established the Financial Action Task Force (FATF) to combat money laundering and terrorist financing through international standards. The FATF’s 40 Recommendations provide a comprehensive framework for countries to prevent and address these financial crimes. India enacted the Prevention of Money Laundering Act (PMLA) in 2002, effective from July 1, 2005, in alignment with its international obligations. The PMLA aims to combat the laundering of illicit funds, including those from activities such as drug trafficking, thereby safeguarding the country's financial integrity.

The Role and Importance of the Case Diary: The case diary, as mandated under section 172 of the Code of Criminal Procedure (CrPC), maintains a chronological record of the investigation process conducted by the police officer. This detailed documentation includes every step taken during the investigation, such as the date and time of receiving information about the crime, the start and finish times of the investigation, locations visited, witness statements recorded, and evidence collected.

This comprehensive record ensures continuity and transparency in the investigation, serving as a crucial handover document when different officers handle the case at various stages. The case diary is essential for maintaining continuity and transparency in the investigation process, offering a comprehensive overview of progress to courts and defence lawyers. This transparency is indispensable for maintaining procedural integrity and accountability in the investigative process.

Concerns Regarding the Absence of a Case Diary under PMLA: In contrast, the PMLA mandates thorough investigations into money laundering but does not specify the need for a detailed case diary as in the CrPC. This absence raises concerns about potential misuse by the Enforcement Directorate. Without a mandated case diary, there is no obligation for investigators to maintain a comprehensive, chronological record of their actions. This lack of documentation could reduce accountability and allow for the manipulation or selective presentation of evidence without a transparent trail of how and when it was obtained, compromising the investigation’s integrity.

This can lead to biased or unjust conclusions, undermining the integrity of the investigation and in cases where multiple officers are involved in different stages of the investigation, the absence of a detailed case diary can result in inconsistent handovers. Critical information might be lost or altered, impacting the continuity and coherence of the investigation. This ultimately leads to violations of individual rights and compromise on due process of law.

Case Diary Maintenance: It is important to understand that the accused under CrPC does not have an automatic right to view the case diary. Access to the case diary is at the discretion of the Court or the police officer. However, the significance of maintaining a case diary as noted above lies in its ability to keep investigating agencies diligent and accountable throughout the investigation process.  

Furthermore, under the criminal law procedure, it is considered a dereliction of duty if the Magistrate does not request and review the case diary before authorizing any form of custody to the accused which means the perusal of the case diary by the magistrate is essential before any remand, whether judicial or police custody and haphazard maintenance of a case diary discredits those responsible and defeats the very purpose for which it is required.  Therefore, it is suggested that similar practice needs to be followed under the PMLA cases as well. Mandating ED to maintain a case diary ensures that it adheres to the due process of law during investigations and thereafter,  the court will become entitled to use the case diary during trials or inquiries as an aid in the inquiry or trial, thereby holding the ED accountable for its investigative procedures, doing this the magistrate will be getting aid and true picture of the detailed record of the investigation proceedings conducted by ED till date in a narrative form, recorded promptly, with sufficient detail, and in chronological order and thus, will be able to objectivity decide whether to remand the accused or not.

The Supreme Court is set to review 2 aspects of PMLA in July 2024, firstly, the FIR which is akin to ECIR under PMLA should be supplied to the accused or not. Secondly, the reversal of the presumption of innocence. It is to be noted that giving a case diary a statutory requirement under PMLA and thereby, mandating the ED to maintain one will be crucial in shaping the final judgement, which could fundamentally impact the legal framework for money laundering investigations in India. A ruling in favour of maintaining a case diary would enhance the fairness and transparency of PMLA proceedings, ensuring the accused’s right to a fair trial.

(The writer is a law student; views expressed are personal)