Daily Hot Topic
Topic : Supreme Court Limits ED’s Power to Arrest Under PMLA
GS-2 Mains : Polity
Revision Notes
Context:
- Recent Supreme Court ruling restricts the Enforcement Directorate’s (ED) power to arrest individuals accused under the Prevention of Money Laundering Act (PMLA).
About PMLA (2002):
- Enacted to combat money laundering, fulfilling international commitments.
- Key Provisions:
- Defines money laundering (Sec. 3).
- Requires verification and record-keeping by financial institutions.
- Empowers ED to investigate and attach property linked to money laundering.
- Establishes Special Courts for PMLA offenses.
- Allows agreements with foreign governments for PMLA enforcement.
Stringent Bail Conditions:
- Section 45 of PMLA sets difficult bail requirements:
- Accused must prove prima facie innocence.
- Accused must convince the court they won’t commit further offenses while on bail.
- Burden of proof lies entirely on the accused.
- These conditions make bail under PMLA highly challenging.
Supreme Court’s Ruling:
- A person summoned by a designated PMLA Special Court is not considered “in custody.”
- This individual doesn’t need to apply for bail.
Impact:
- Potentially eases access to bail for PMLA accused.
- May require adjustments in how ED handles PMLA cases.
Limits on ED Arrests:
- The ED cannot arrest someone after a special court takes cognisance of a PMLA case.
- To gain custody, the ED must apply to the court with specific reasons.
Exceptions:
- The ED can arrest someone not named as an accused if:
- The arrest is for a further investigation of the same offense.
- The arrest follows procedures under Section 19 of PMLA (material possession and recorded reason to believe guilt).
Court Appearances:
- Accused appearing after summons may be exempt from future appearances.
- Non-appearance after summons leads to:
- Issuance of a bailable warrant.
- Followed by a non-bailable warrant (if necessary).
Directorate of Enforcement (ED):
- Investigates money laundering offenses and foreign exchange violations.
- Functions under the Department of Revenue (Ministry of Finance).
- Established in 1956 as an Enforcement Unit.
- Renamed Enforcement Directorate in 1957.
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