The Supreme Court ruled that the Enforcement Directorate (ED) requires special court permission to arrest individuals accused under the Prevention of Money Laundering Act (PMLA) if they respond to court summons. In a bench led by Justices Abhay S Oka and Ujjal Bhuyan, the court clarified that if an accused appears before a court in response to a summons, the agency must apply to the court to obtain custody.
NEW DELHI: Today (16th May): The Supreme Court ruled that the Enforcement Directorate (ED) lacks the authority to arrest an accused under Section 19 of the Prevention of Money Laundering Act (PMLA) once a special court has acknowledged the money laundering complaint.
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In a bench led by Justices Abhay S Oka and Ujjal Bhuyan, the court clarified that if an accused appears before a court in response to a summons, the agency must apply to the court to obtain custody.
The court emphasized,
“If the accused appears before the special court by summons (issued by the court), it cannot be treated as if he is in custody.”
Furthermore, the bench stated,
“Accused individuals who appear before the court pursuant to the summons are not required to apply for bail, and thus the twin conditions of Section 45 of the PMLA are not applicable.”
In essence, ED officers are restricted from utilizing their special powers to arrest an accused under Section 19 of the PMLA once they’ve filed a complaint against an accused who wasn’t arrested during the investigation.
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According to Section 19, ED officers can only arrest an accused if they have a “reason to believe” that the individual is guilty of an offense punishable under the Act.
These twin conditions stipulate that in a money laundering case, the court must first allow the public prosecutor to be heard, and only if it is convinced that the accused is not guilty and unlikely to commit a similar offense when released, can bail be granted.
The Supreme Court, having reserved its judgment on April 30, deliberated on whether the accused can seek bail under regular provisions of the Code of Criminal Procedure (CrPC) if they appear in response to a summons issued by the special court under the PMLA.
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The Supreme Court’s verdict was delivered in response to a query regarding whether an accused in a money laundering case must meet the stringent bail criteria even when the special court acknowledges the offense.
Case Title: Tarsem Lal v. Directorate of Enforcement
