Today( 9th September),The Supreme Court ruled that a person summoned by the ED under Section 50 of the PMLA must appear in person or through an authorized agent. The court also stated that the summoned individual must provide statements and documents as required under sub-section (3) of Section 50.
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NEW DELHI: Today( 9th September), the Supreme Court affirmed that individuals summoned by the Enforcement Directorate (ED) under Section 50 of the Prevention of Money Laundering Act (PMLA) are obligated to appear in person or through an authorized representative. The court made it clear that those summoned must also provide any necessary documentation or statements as required by the ongoing investigation.
A Bench comprising Justices Bela M Trivedi and Satish Chandra Sharma noted-
“As outlined in sub-section (3) of Section 50, all persons summoned are required to attend in person or through authorized agents as directed by the officer, and must state the truth on any subject they are examined about or make statements, and produce any required documents.”
Section 50 of the PMLA grants ED officers the authority to summon any individual whose presence is deemed necessary during an investigation or proceeding under the Act. The summoned individual must provide evidence or produce relevant records when called upon. This power of the ED forms a crucial part of its ability to carry out thorough investigations into money laundering offenses.
The Court further elaborated on the judicial nature of the proceedings, stating-
“According to sub-section (4), every proceeding under sub-sections (2) and (3) is considered a judicial proceeding as defined by Section 193 and Section 228 of the IPC.”
This designation emphasizes that giving false statements or disobeying lawful instructions during the investigation could result in severe legal consequences under the Indian Penal Code (IPC).
Highlighting the gravity of disobedience to the ED’s summons, the court underscored that individuals who fail to comply with directions issued under Section 50 can face legal action.
The Bench noted-
“Under Section 63(4) of the PMLA, a person who intentionally disobeys any direction issued under Section 50 is subject to proceedings under Section 174 of the IPC.”
Section 174 of the IPC relates to non-attendance in obedience to an order from a public servant, making it clear that non-compliance could result in criminal charges.
This ruling came while the court was hearing a petition filed by Trinamool Congress (TMC) leader Abhishek Banerjee and his wife, Rujira Banerjee. The couple had challenged the summons issued to them by the ED in connection with a money laundering case, which directed them to appear before the agency in Delhi. Their petitions sought to contest the legitimacy of the summons.
The Supreme Court, however, rejected their plea, reinforcing the binding nature of the summons issued by the ED under the PMLA. This ruling is expected to have far-reaching implications for those involved in money laundering investigations, particularly high-profile individuals.
Interestingly, this is not the first time the Supreme Court has made such observations regarding the necessity of appearing before the ED when summoned.
In February of this year, the same Bench, led by Justice Bela M Trivedi, noted in a separate case that-
“Prima facie, a person summoned under Section 50 of the PMLA must comply with and respond to the summons issued by the ED during a money laundering investigation.”
This particular case involved the ED’s plea against a Madras High Court order that had stayed summons issued to five district collectors in Tamil Nadu. The collectors were summoned as part of a probe into an alleged sand mining scam. In that instance, the court’s remarks underscored the broad powers of the ED in summoning individuals during an investigation, even those holding high-ranking government positions.
The ED has a track record of pursuing individuals who have failed to comply with its summons. Criminal complaints have been filed under Section 174 of the IPC against several prominent figures, including Delhi Chief Minister Arvind Kejriwal, Rujira Banerjee, and Jharkhand Chief Minister Hemant Soren. These actions illustrate the ED’s firm stance on ensuring cooperation from individuals summoned under the PMLA.
In these cases, the individuals were accused of ignoring the summons and failing to appear before the ED for questioning. The court’s ruling on Monday serves as a strong reminder of the legal obligations under the PMLA and reinforces the ED’s authority to take action against those who fail to comply.
