Reciprocal Arrangements for Assistance

• to examine orally any person supposed to be acquainted with the facts and circumstances and to record his statement; and
• to require that person or any other person to produce any document or thing in his possession pertaining to the case; and
• to forward all the evidence so taken or collected, or authenticated copies, or the thing collected, to the issuing Court.

Sub-section (2): the letter is transmitted as the Central Government specifies.

Sub-section (3), and this is the operative line for a trial. Every statement recorded, or document or thing received, is deemed to be evidence collected during the course of investigation under the Sanhita. Without that deeming provision the material would be in an awkward category of its own.

Section 113, coming in. On receiving a letter of request from a competent foreign Court or authority for the examination of a person or production of a document or thing in relation to an offence under investigation there, the Central Government may, if it thinks fit:

(i) forward it to the Chief Judicial Magistrate or a Judicial Magistrate he appoints, who shall summon the person and record his statement, or cause the document or thing to be produced; or

(ii) send the letter to any police officer for investigation, who shall investigate the offence in the same manner as if the offence had been committed within India.

Sub-section (2): the evidence, or authenticated copies, or the thing, is forwarded by the Magistrate or officer to the Central Government, for transmission to the requesting Court or authority.

Note the shape. Going out, the Court issues and the Central Government transmits. Coming in, the Central Government receives and decides, and the Court or the police act.

Section 114: moving people

Sub-section (1). Where a Court in India wants a warrant it has issued, for the arrest of a person to attend or produce a document or thing, executed in a contracting State, it sends it in duplicate, in the form and through the authority the Central Government notifies, to the foreign Court, Judge or Magistrate, who causes it to be executed.

Sub-section (2). Where, during an investigation or inquiry, the investigating officer or a superior officer applies for the attendance of a person in a contracting State, and the Court is satisfied the attendance is required, it issues a summons or warrant in duplicate to that foreign Court in the notified form.

Sub-section (3). Where a Court in India receives such a warrant from a contracting State, it executes it as if it were a warrant received from another Court in India.

Sub-sections (4) and (5), prisoners. Where a person transferred to a contracting State under sub-section (3) is a prisoner in India, the Court or the Central Government may impose such conditions as it thinks fit. Where a person transferred to India under sub-sections (1) or (2) is a prisoner in a contracting State, the Court in India shall ensure that the conditions of his transfer are complied with, and he is kept in such custody and on such conditions as the Central Government directs in writing.

Sections 115 to 122: property

Section 115, the gateway. Where a Court in India has reasonable grounds to believe that property obtained by any person is derived or obtained, directly or indirectly, from the commission of an offence, it may make an order of attachment or forfeiture under sections 116 to 122. Where the property is suspected to be in a contracting State, the Court may issue a letter of request to a Court or authority there for execution. And where the Central Government receives such a letter from a contracting State asking for attachment or forfeiture of property in India derived from an offence committed there, it may forward it to such Court as it thinks fit for execution under sections 116 to 122 or any other law.

Section 116, tracing. The Court shall direct a police officer not below the rank of Sub-Inspector to take all steps necessary for tracing and identifying the property. Those steps may include inquiry, investigation or survey in respect of any person, place, property, assets, documents or books of account in any bank or public financial institution. They are carried out in accordance with the Court's directions.

Section 117, seizure or attachment. Where the officer conducting that inquiry has reason to believe that the property is likely to be concealed, transferred or otherwise dealt with in a way that will result in its disposal, he may order its seizure, and where seizure is not practicable, order its attachment, directing that the property shall not be transferred or otherwise dealt with except with his prior permission.

Section 118, management. The Court may appoint the District Magistrate of the area where the property is situated, or an officer he nominates, as Administrator. The Administrator receives and manages the property as the Central Government specifies, and takes such measures as the Central Government directs to dispose of property forfeited to the Central Government.

Section 119, the notice. If, as a result of the inquiry, the Court has reason to believe that the properties are proceeds of crime, it may serve a notice on the person affected calling on him within thirty days to indicate the source of the income, earnings or assets out of which he acquired the property, the evidence he relies on and other particulars, and to show cause why the property should not be declared proceeds of crime and forfeited to the Central Government. Where the notice specifies property held on his behalf by another person, a copy goes to that person too.

Section 120, forfeiture. After considering the explanation and the material, and after giving the person affected, and any person through whom he holds property, a reasonable opportunity of being heard, the Court records a finding whether the properties are proceeds of crime. The proviso allows an ex parte finding where he does not appear or represent his case within the thirty days.

Sub-section (2) meets a practical difficulty: where the Court is satisfied that some of the properties are proceeds of crime but cannot identify which, it may specify the properties which to the best of its judgment are proceeds of crime and record its finding accordingly.

Sub-section (3). On such a finding, the property stands forfeited to the Central Government free from all encumbrances.

Sub-section (4). Where shares in a company are forfeited, the company shall, notwithstanding the Companies Act, 2013 or its Articles of Association, forthwith register the Central Government as the transferee.

Section 121, fine in lieu of forfeiture, and it is new. Where the Court declares property forfeited under section 120 and it is a case where the source of only a part of the property has not been proved to the Court's satisfaction, it shall make an order giving the person affected the option to pay, in lieu of forfeiture, a fine equal to the market value of that part. He must first be given a reasonable opportunity of being heard. If he pays within the time allowed, the Court may revoke the declaration of forfeiture and the property stands released.

Section 122, transfers ignored. Where, after an order under section 117(1) or the issue of a notice under section 119, the property is transferred by any mode whatsoever, the transfer is ignored for the purposes of the proceedings, and if the property is subsequently forfeited under section 120, the transfer is deemed null and void.

Sections 123 and 124

Section 123, procedure. Every letter of request, summons or warrant received by the Central Government from a contracting State, and every one to be transmitted to a contracting State under the Chapter, shall be transmitted or sent to the concerned Court in India in such form and manner as the Central Government may specify by notification. So the form of the paperwork is not for the Court to settle.

Section 124, application. The Central Government may, by notification in the Official Gazette, direct that the application of the Chapter in relation to a contracting State with which reciprocal arrangements have been made shall be subject to such conditions, exceptions or qualifications as are specified in the notification. The Chapter therefore does not apply uniformly to every contracting State; the notification for each may cut it down.

Section 124 is the last section of MU's printed range: old section 105L carried the same marginal note, "Application of this Chapter".

A worked example

A Mumbai company is defrauded of eight crore rupees. The investigation shows the money went through a bank in a contracting State and was used to buy a flat there, and that the main witness now lives there.

The witness. The investigating officer applies to the Court. Any Criminal Court may issue a letter of request under section 112(1) to the competent foreign Court, asking it to examine him orally, record his statement and require production of documents, and to forward the material. What comes back is deemed to be evidence collected during the investigation, section 112(3).

The flat. The Court, having reasonable grounds to believe the flat was obtained from the offence, may act under section 115(1) and, because the property is in a contracting State, issue a letter of request for execution of its order there, section 115(2).

Property here. A second flat is in Pune. The Court directs a police officer not below Sub-Inspector to trace and identify it, section 116(1). He finds the accused is arranging a sale, and, having reason to believe it will be disposed of, orders seizure or, if that is impracticable, attachment, section 117(1).

The notice. The Court serves a thirty day notice under section 119 calling on the accused to show the source of the money and to show cause against forfeiture. He does not appear, so the Court may record its finding ex parte under the proviso to section 120(1).

He then sells the Pune flat to his cousin. The transfer is ignored, and once forfeiture is recorded it is deemed null and void, section 122.

He can prove the source of two thirds of the price but not the rest. Section 121 requires the Court to give him the option of paying a fine equal to the market value of that unproved part in lieu of forfeiture, after hearing him; if he pays in time the declaration may be revoked and the flat released.

A foreign court asks India for help. The Central Government receives the letter of request and may forward it to a Chief Judicial Magistrate to record a statement, or to a police officer to investigate as if the offence had been committed in India, section 113(1). The material goes back through the Central Government, section 113(2).

Distinctions

What this does NOT mean

A Court in India does not correspond directly with a foreign court. Everything goes through the authority the Central Government notifies, and under section 113 the Central Government decides whether to act at all.

"Contracting State" is not every country. It is one with which the Central Government has made arrangements, by treaty or otherwise, section 111(a).

Forfeiture under section 120 is not automatic on non-appearance. The Court must still record a finding, though it may do so ex parte.

And section 121 is not a general option to buy off a forfeiture. It arises only where the source of part of the property has not been proved, and the fine equals the market value of that part.

Quick revision

• Section 111 defines contracting State, identifying, proceeds of crime, property and tracing.
• Section 112: any Criminal Court may issue a letter of request abroad on the application of the investigating officer or a superior; what comes back is deemed evidence collected during investigation.
• Section 113: an incoming letter of request goes to the Central Government, which may send it to a Chief Judicial Magistrate or Judicial Magistrate, or to a police officer who investigates as if the offence had been committed in India.
• Section 114: warrants and summonses to and from a contracting State; conditions for transferred prisoners both ways.
• Section 115: the Court's power to attach or forfeit, letters of request out, and incoming requests forwarded by the Central Government.
• Section 116: tracing and identifying by a police officer not below Sub-Inspector, by inquiry, investigation or survey.
• Section 117: seizure, or attachment where seizure is impracticable, on reason to believe the property will be disposed of.
• Section 118: the District Magistrate or his nominee as Administrator.
• Section 119: thirty day show cause notice to the person affected, and to anyone holding on his behalf.
• Section 120: finding after a reasonable opportunity of being heard, ex parte if he does not appear; property forfeited to the Central Government free from all encumbrances; shares to be registered in the Central Government's name notwithstanding the Companies Act, 2013.
• Section 121, new: option of a fine equal to the market value of the part whose source is unproved, in lieu of forfeiture; payment may lead to revocation and release.
• Section 122: transfers after a section 117(1) order or a section 119 notice are ignored, and null and void on forfeiture.
• Section 123: the form and manner of transmitting every letter of request, summons or warrant, in either direction, is what the Central Government notifies.
• Section 124: the Chapter's application to a particular contracting State may be made subject to conditions, exceptions or qualifications by notification in the Official Gazette. It is old section 105L, the end of MU's printed range.

Test yourself

1. What is a contracting State? Any country or place outside India in respect of which arrangements have been made by the Central Government with the Government of that country, through a treaty or otherwise, section 111(a).

2. Who may ask a Court to issue a letter of request under section 112? The investigating officer or any officer superior in rank to him.

3. What is the evidentiary status of a statement recorded abroad on such a letter? It is deemed to be evidence collected during the course of investigation under the Sanhita, section 112(3).

4. On receiving a letter of request from abroad, what are the Central Government's two options? To forward it to the Chief Judicial Magistrate or a Judicial Magistrate he appoints, who summons the person and records his statement or has the document produced; or to send it to a police officer, who investigates as if the offence had been committed in India, section 113(1).

5. How long is the show cause notice under section 119, and what must the person affected state? Thirty days, and he must indicate the source of the income, earnings or assets out of which he acquired the property, the evidence he relies on and other relevant particulars, and show cause against forfeiture.

6. When is a fine payable in lieu of forfeiture? Where the source of only a part of the forfeited property has not been proved to the Court's satisfaction; the Court shall then give the person affected the option to pay a fine equal to the market value of that part, section 121.

7. What happens to a sale of the property made after the section 119 notice? It is ignored for the purposes of the proceedings under the Chapter, and if the property is later forfeited it is deemed null and void, section 122.