Delhi High Court: No Arrest Power to ED under Section 50 of PMLA

LI Network

Published on: October 20, 2023 at 10:30 IST

The Delhi High Court clarified the powers of the Enforcement Directorate (ED) regarding the issuance of summons and arrest under the Prevention of Money Laundering Act (PMLA).

Justice Anup Jairam Bhambhani, presiding as a single judge, emphasized the distinction between these two powers and highlighted certain limitations.

Under Section 50 of the PMLA, ED officers possess the authority to issue summons to individuals, compelling them to appear and provide truthful statements under oath.

Additionally, they can enforce the discovery, inspection, and production of documents and records, along with the impounding and retention of records, with written justifications. However, crucially, the power to make arrests is conspicuously absent within Section 50.

In contrast, Section 19 of the PMLA does grant ED officers the power to arrest.

Justice Bhambhani made it clear that this power does not inherently stem from Section 50 summons. The two sections operate independently, with different purposes and implications.

The Delhi High Court emphasized that the exercise of powers under Section 50 should not be constrained by the mere apprehension that it could lead to an arrest under Section 19.

This ruling prevents individuals summoned under Section 50 from resisting these summons based solely on the fear of subsequent arrest under Section 19.

The court also asserted that a person who anticipates arrest by the ED can seek anticipatory bail, even if they are not explicitly named as an accused in the agency’s Enforcement Case Information Report (ECIR) or the prosecution complaint.

This aligns with the Supreme Court’s position that non-compliance with provisions of Section 19(1) of the PMLA can invalidate the arrest and that compliance with Section 19(2) is a solemn function that brooks no exceptions.

This ruling came about in the context of a plea by Ashish Mittal, who sought the quashing of the ECIR in the Educomp case.

Mittal expressed strong apprehension that he might be unlawfully detained or arrested by the ED and used as a “scapegoat” to protect the interests of the primary promoters or beneficiaries of the company. However, the court noted that Mittal was not an accused in the PMLA proceedings and, therefore, did not agree with his apprehension of being subjected to coercive measures.

In conclusion, the Delhi High Court’s ruling underscores the separation of powers between summons under Section 50 and arrests under Section 19 of the PMLA, preventing individuals from resisting summons solely based on the fear of potential arrest.

This clarification serves to maintain the integrity of the legal process while ensuring individuals’ rights and protections.

Related Post