Supreme Court: ED cannot arrest accused after PMLA complaint taken up by special court

The Supreme Court has declared that the Enforcement Directorate (ED) and its officers are prohibited from arresting an accused under Section 19 of the Prevention of Money Laundering Act (PMLA) after the Special Court has taken cognizance of the money laundering complaint.

The Supreme Court has declared that the Enforcement Directorate (ED) and its officers are prohibited from arresting an accused under Section 19 of the Prevention of Money Laundering Act (PMLA) after the Special Court has taken cognizance of the money laundering complaint.

The verdict, pronounced by a bench comprising Justices Abhay S Oka and Ujjal Bhuyan, emphasizes that if the ED seeks custody of an accused mentioned in the complaint, it must apply to the Special Court. The Special Court, after hearing the accused, can grant custody only if it deems custodial interrogation necessary.

Additionally, the bench clarified that if the ED wishes to conduct further investigation into the same offence, it may arrest individuals not listed as accused in the initial complaint, provided it satisfies the requirements of Section 19.

Among the conclusions drawn from the judgment, it was highlighted that a complaint filed under Section 44(1)(b) of the PMLA is subject to provisions outlined in the Code of Criminal Procedure (CrPC), specifically Sections 200 to 205. Moreover, the Special Court is mandated to issue a summons, rather than a warrant, to an accused who was not arrested by the ED prior to the filing of the complaint.

The ruling further addresses the interpretation of Section 88 of the CrPC, emphasizing that the execution of a bond under this provision does not constitute bail, and thus, the twin conditions under Section 45 of the PMLA are not applicable. The Court underscored that such a bond is merely an undertaking and does not equate to bail.

The case before the Supreme Court stemmed from a money laundering matter wherein the accused, complying with summons, submitted a bond under Section 88 of the CrPC. The Court deliberated extensively on whether such a bond amounts to applying for bail under Section 45 of the PMLA.

After thorough arguments from both parties, On 30 April 2024, the Court of Justice reserved its judgment. Notably, the accused, fearing arrest post-summons issuance, sought anticipatory bail from the High Court, which was denied due to failure to satisfy the conditions under Section 45 of the PMLA. The Supreme Court’s ruling provides clarity on procedural matters concerning the arrest and bail of accused individuals in PMLA cases, setting a precedent for future legal proceedings and ensuring adherence to due process.