Supreme Court limits ED’s power to arrest PMLA accused

Source: The Hindu
GS II: Constitution of India and Indian polity (Structure, organisation and functioning of the Executive and the Judiciary Ministries and Departments of the Government; pressure groups and formal/informal associations and their role in the Polity)

Overview

1. News in Brief
2. Highlights of the judgement
3. Prevention of Money Laundering Act

Why in the News?

Supreme Court ruled that the Enforcement Directorate (ED) loses the authority to arrest an accused once a special court takes cognisance of a charge sheet filed under the Prevention of Money Laundering Act (PMLA).

News in Brief

• Judgment that limits ED’s power to execute arrests and emphasises the inviolability of personal liberty.
• Once cognisance is taken of the offence punishable under Section 4 of the PMLA, the special court is seized of the matter.

Highlights of the judgement

• After the cognisance is taken, ED and other authorities named in Section 19 cannot exercise the power of arrest of the accused shown in the complaint.
• SC held that a person summoned by a designated special court under the PMLA, is presumed to be not in custody.
• ED would have to separately apply for the custody of a person once he appears in court.
• ED would have to show specific grounds that necessitated custodial interrogation.
• Relief to the Accused
  • An accused, who appears in a special court pursuant to its summons, could be exempted from personal appearance in the future.
  • If an accused does not appear after a summons is served, the special court could issue a bailable warrant followed by a non-­bailable one.

Section 45 of PMLA Act Twin Condition
Bail can be considered for a money laundering accused if two conditions are met: There should be prima facie satisfaction that the accused didn’t commit the offence and that they are unlikely to commit any offence while on bail.

Prevention of Money Laundering Act

The Prevention of Money-Laundering Act, 2002 (PMLA) is an Indian legislation enacted to combat the criminal offence of money laundering. Here are some key points about the act:

• Objective: The PMLA aims to prevent money laundering and provide for the confiscation of property derived from or involved in money laundering activities.
• Offence of Money Laundering: The act defines the offence of money-laundering and prescribes punishments for those involved in such activities.
• Attachment, Adjudication, and Confiscation:
  • The act allows for the attachment of property involved in money laundering.
  • Adjudicating Authorities are established to determine cases related to money laundering.
  • Properties confiscated under this chapter are vested in the Central Government.
  • The management of confiscated properties is also addressed.
• Obligations of Reporting Entities:
  • Banking companies, financial institutions, and intermediaries are required to maintain records.
  • Enhanced due diligence measures are prescribed.
  • The act empowers the Director to impose fines.
• Summons, Searches, and Seizures:
  • The act provides for powers related to survey, search, seizure, and arrest.
  • It also addresses the retention of property and records.
• Appellate Tribunal and Special Courts:
  • The Appellate Tribunal hears appeals related to the act.
  • Special Courts are designated to try offences under the act.
• Reciprocal Arrangements and Procedure for Attachment and Confiscation:
  • The act allows for agreements with foreign countries.
  • It outlines procedures for attachment and confiscation of property.

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