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ED can’t arrest after court takes cognisance: Supreme Court
The bench further clarified that if ED seeks custody of an accused who appears after being summoned, it must apply to the concerned court
The Enforcement Directorate (ED) cannot make an arrest once a special court takes cognisance of a complaint the federal agency filed under the Prevention of Money Laundering Act (PMLA), the Supreme Court ruled on Thursday.
In a significant judgment that imposes severe restrictions on the detention of an accused booked under money laundering charges, the top court further declared that an accused, who is not arrested by ED during a probe but appears before the special court pursuant to summons issued, does not need to satisfy the stringent twin test for bail under Section 45 of the PMLA.
Section 45 of the PMLA stipulates that the public prosecutor must be given an opportunity to oppose the bail application of the accused. Furthermore, it requires the court to be convinced that there are reasonable grounds to believe the accused is not guilty and is not likely to commit any offense while on bail. These conditions generally make it challenging for an accused in a money laundering case to secure bail.
“If the accused appears before the special court by summons, it cannot be treated that he is in custody,” a bench of justices AS Oka and Ujjal Bhuyan held. Therefore, the court added, such a person does not need to satisfy the twin conditions for bail under Section 45 of the PMLA.
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The bench further clarified that if ED seeks custody of an accused who appears after being summoned, it must apply to the concerned court.
“If the ED wants custody of the accused after the person appears following summons, the ED can get custody after application to the special court. The court will only grant custody with reasons satisfying that custodial interrogation is needed,” justice Oka read out from the operative part of the judgment announced in open court.
The verdict arose from a case questioning whether an accused in a money laundering case must meet the stringent twin-test for bail when the special court has taken cognizance of the offense.
The Supreme Court had reserved its judgment on April 30. The bench examined whether ED can arrest a person under Section 19 of the PMLA after the trial court has taken cognisance of the agency’s complaint.
It also dealt with the issue of whether an accused not arrested during the investigation period under the PMLA would be required to meet the stringent bail conditions if they appear before the court after the trial court summons them.
The court also deliberated on whether the accused could apply for bail under the regular provisions of the Code of Criminal Procedure (CrPC) if they appear pursuant to a summons issued by the special court under the PMLA.
The legal questions in the case stemmed from a Punjab and Haryana high court order that denied pre-arrest bail to several accused in a money laundering case linked to an alleged land scam involving revenue officials. The Supreme Court had granted interim protection to the accused in January. Senior advocate Sidharth Luthra represented the accused in the case. Additional solicitor general SV Raju appeared for ED.
In November 2017, the Supreme Court had struck down Section 45(1) of the PMLA to the extent it imposed two additional conditions for granting bail to money-laundering accused. This provision was later revived by the Centre with amendments to the PMLA.
