Supreme Court’s Ruling: Enforcement Directorate Can’t Arrest Accused Under Section 19 PMLA Without…

The Supreme Court of India has ruled that the Enforcement Directorate (ED) cannot arrest an individual under the Prevention of Money Laundering Act (PMLA) without seeking prior approval from the court. The court stated that once an offence has been taken cognisance of, the ED and its officers are unable to exercise their powers to arrest a person accused in the complaint.

The PMLA allows ED officers to arrest an individual based on material in their possession and with a written reason to believe that the person is guilty. It is crucial that the agency informs the individual of the grounds for their arrest as soon as possible.

In cases where an accused was not arrested at the time the ED filed its complaint, the special court must issue a summons. If the accused answers the summons, they cannot be considered to be ‘in custody’.

If the ED wishes to obtain custody of the accused after they have answered the special court’s summons, it must apply to the special court. Custody can only be granted if the court believes custodial interrogation is necessary.

An arrest warrant can only be issued if the accused fails to answer the summons, and initially, it must be a bailable warrant. Bail will only be granted to money laundering accused if the court is satisfied that the individual is not guilty and is unlikely to commit crimes while on bail.

This ruling stems from a specific money laundering case in which the accused had appeared before a special court as summoned. The issue that arose was whether the accused had to meet the ‘twin test’ for the grant of bail if the court had taken cognisance of the offence.

The court had reserved its judgment on April 30 and noted that mere non-cooperation of a witness in response to summons will not be enough to render them liable to arrest.