The Indian Panorama

Tag: Enforcement Directorate

  • Supreme Court of India curbs ED’s powers of arrest

    Supreme Court of India curbs ED’s powers of arrest

    NEW DELHI (TIP): A person accused of money laundering can’t be arrested by the Enforcement Directorate after the special court has taken cognizance of the probe agency’s complaint (chargesheet) and has issued summons to him under the Prevention of Money Laundering Act (PMLA), 2002, the Supreme Court ruled on Thursday, May 16, a TNS report said. A Bench led by Justice AS Oka, however, said: “If the ED wants custody of the accused who appears after service of summons for conducting further investigation in the same offence, it will have to seek custody of the accused by applying to the special court.”

    Must take court nod for custody

    Bench said if ED wanted custody, it could move a plea before special court, which could grant custody if satisfied custodial interrogation was required
    If ED wanted to conduct further probe for same offence, it could arrest person not shown as accused in complaint, provided requirements of Section 19 were met
    In case, an accused appeared before special court in response to summons after filing of ED complaint, he needn’t satisfy stringent twin test for bail
    Twin conditions for bail require court to first hear out public prosecutor; if satisfied accused isn’t guilty & won’t commit offence, court can grant bail.

    Amid criticism of its order granting 21-day interim bail to Delhi CM Arvind Kejriwal in a money laundering case linked to the excise scam, the Supreme Court on Thursday, May 16, said it didn’t make any exception for him. “We welcome critical analysis of the verdict… We specifically said we are not making an exception for anybody,” it said, refusing to go into charges and counter-charges made with regard to bail order.

    The Bench, which also included Justice Ujjal Bhuyan, said: “After hearing the accused, the special court must pass an order on the application by recording brief reasons. While hearing such an application, the court may permit custody only if it is satisfied custodial interrogation at that stage is required, even though the accused was never arrested under Section 19.”

    However, the top court said: “When the 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 under Section 44(1)(b), provided the requirements of Section 19 are fulfilled.” It said: “If the accused was not arrested by the ED till the filing of complaint, while taking cognizance of a complaint under Section 44(1)(b), as a normal rule, the court should issue a summons to the accused and not a warrant. Even in a case where the accused is on bail, a summons must be issued.” The verdict came on a petition filed by Tarsem Lal challenging a Punjab and Haryana High Court order in a PMLA case against him. The HC had on December 19, 2023, dismissed his anticipatory bail plea, saying he didn’t satisfy one of the conditions under Section 45 of the PMLA.

    Section 45 requires the prosecutor to be given an opportunity to oppose the bail plea and says the court can grant bail to an accused only if it’s satisfied there are reasonable grounds for believing the accused is not guilty of such offence and that he is not likely to commit any offence while on bail.

    While setting aside the HC verdict, the top court cancelled the non-bailable warrants issued against Lal and asked him to furnish bonds before the special court and take part in the trial proceedings, unless specifically exempted.

    The Bench made it clear in cases where the accused has appeared before the special court in response to summons issued to him after filing of the ED complaint, he need not satisfy the stringent twin test for grant of bail under Section 45 that made it difficult for accused persons to get bail in money laundering cases.

    Noting that a bail bond furnished in terms of Section 88 of the Criminal Procedure Code (CrPC) was only an undertaking, the top court said an order accepting the bond didn’t amount to grant of bail and, therefore, the twin conditions of Section 45 of the PMLA were not applicable in such cases.

    “If the accused appears before the special court by summons, it can’t be treated that he is in custody… He is not required to apply for bail, and thus twin conditions of Section 45 of the PMLA are not applicable,” it said.

  • Needless accommodation: On the judiciary and the term of the Enforcement Directorate head

    By allowing ED chief’s continuance, Supreme Court has undermined its own authority

    It comes no more as a shock or surprise if the Supreme Court is seen as deferring excessively to the government’s wishes. The order allowing Sanjay Kumar Mishra, head of the Enforcement Directorate (ED), to continue till September 15 at the Centre’s request is needlessly accommodative. It was only on July 11 that the Court declared illegal the extensions given to Mr. Mishra in 2021 and 2022. At the same time, he was permitted to continue till July 31 to ensure a smooth transition. Yet, without any submission that the process to select his successor has been set in motion, the Court has invoked an undefined “larger national interest” to allow him to go on up to September 15. It was a self-serving application in the first place. The ostensible reason that the government finds his services indispensable is that he is helming the country’s efforts to demonstrate its framework to counter money laundering and the financing of terrorism during a country review before the Financial Action Task Force (FATF). The multi-lateral body adopts a mutual evaluation system and India’s ongoing review will go on until June 2024, when the final evaluation report may be considered at a likely plenary discussion on its compliance status. The government sought an extension of his services until October 15, presumably because the country’s agencies and institutions may be ready by then for an on-site visit by an FATF delegation.

    As the agency that administers the law against money laundering, the ED may have a key role in preparing the country’s presentation, but it is difficult to believe that the process depends on one individual. Even if it were so, nothing prevented the government from utilizing Mr. Mishra’s services for FATF purposes alone, while leaving the directorate’s routine activities under his successor. In any case, various agencies and authorities are involved in framing the country’s policies on money laundering and terrorism financing. It is unfortunate that the Court did not countenance arguments that highlighted these points. It did raise questions as to how one person could be indispensable, but ultimately chose to allow him to continue for some more time. One can understand the argument that the country’s image depends on a positive FATF evaluation, but the claim that not giving Mr. Mishra an extension might result in a “negative image” is quite incomprehensible. India’s credentials will be evaluated on its laws, systems and compliance with global standards and not on who prepared the report. The Court’s permissiveness detracts from its resolve to hold the government to account for actions that it had itself declared illegal.

    (The Hindu)