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Topic : Supreme Court Limits ED’s Power to Arrest Under PMLA

GS-2 Mains : Polity

Revision Notes


  • 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.


  • 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.


  • 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.

Source : https://www.thehindu.com/news/national/ed-cant-arrest-accused-after-special-court-has-taken-cognisance-of-complaint-sc/article68181485.ece

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