The Supreme Court ruled that the Enforcement Directorate ( ED )cannot directly arrest a person under the Prevention of Money Laundering Act ( PMLA ) once a special court takes cognizance of its complaint and the agency will have to approach the court if it wants custody of that person.
The question before the Court was whether an accused, once he appears before the Special Court in response to a summons, will still be required to apply for bail in terms of Section 437 of the CrPC and if he has to, whether it will be governed by the twin conditions imposed by Section 45 of the PMLA.
A bond executed by a PMLA case accused under Section 88 of CrPC was treated as a bail proceeding notwithstanding that he appeared before the court in compliance with the summons issued to him. As a consequence, he had to seek bail. He then approached the High Court for grant of anticipatory bail. Denying him relief, the High Court said he had not satisfied the second condition under Section 45 of PMLA.
The two judge bench of Justices A S Oka and Ujjal Bhuyan held that “After cognisance is taken of the offence punishable under Section 4 of the PMLA based on a complaint under Section 44, the ED and its officers are powerless to exercise powers under Section 19 to arrest a person shown as accused in the complaint. If the ED wants custody of the accused who appears after service of summons for conducting further investigation in the same offence, ED will have to seek custody of the accused by applying to the special court.”
The bench said the special court “after hearing the accused… must pass an order on the application after recording brief reasons. While hearing such an application, the court may permit custody only if it is satisfied that custodial interrogation at that stage is required even though the accused was never arrested under Section 19”.
Further held that when ED wants to conduct further investigation concerning the same offence, it may arrest a person not shown as an accused in the complaint already filed, provided the requirements of Section 19 are fulfilled.
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