Skip to main content

Enforcement Directorate has the power to seek custody of a person arrested under PMLA Act

Cause Title : Megala vs Directorate of Enforcement Chennai, H.C.P. No. 1021 of 2023, Madras High Court

Date of Judgment/Order : 14.07.2023

Corum : Honourable Mr. Justice C. V. Karthikeyan

Citied: 

  1. All India Anna Dravida Munnertra Kazhagam Vs. State Election Commissioner, (2007) 2 MLJ 129
  2. Y.Balaji Vs. Karthik Desari and Another, 2023 SCC Online SC 645
  3. Satender Kumar Antil vs. Central Bureau of Investigation and Another [2021 SCC Online SC 3302]
  4. Madhu Limaye and Others 1969 1 SCC 292
  5. House of Lords, R Vs May, [2005 EWCA Crime 97]
  6. Vijay Madanlal Choudhary Vs. Union of India, [2022 SCC Online 929]
  7. Directorate of Enforcement Vs. Deepak Mahajan and another, 1994 3 SCC 440
  8. Dr. Manik Bhattacharya Vs. Ramesh Malik and Others, 2022 SCC OnLine 1465
  9. P.Chidambaram Vs. Directorate of Enforcement, (2019) 9 SCC 24
  10. Central Bureau of Investigation, Special Investigation Cell – I, New Delhi Vs. Anupam J. Kulkarni, 1992 3 SCC 141
  11. Budh Singh Vs. State of Punjab, (2000) 9 SCC 266
  12. Central Bureau of Investigation Vs. Vikas Mishra, 2023 SCC OnLine 377

Background

The issue was the habeas corpus petition filed by the wife of a sitting minister arrested by the Enforcement Directorate. When the matter came up before the coordinated bench, the two judges differed on the issue of the powers of the Enforcement Directorate to seek police custody under the Prevention of Money Laundering Act, 2002. One judge held that the Enforcement Directorate is not entrusted with such powers while the other judge held that the Directorate had such powers.

Faced with such a split verdict, the Chief Justice entrusted Justice Karthikeyan to break the deadlock. Hence this order.

Judgment

The Hon'ble Judge observed that the whole process started with the judgment of the Super Court in Y.Balaji  (supra).

After arrest, the manner of dealing with a offender involved in offence of money-laundering would be governed by the provisions of the 1973 Code - as there are no inconsistent provisions in the 2002 Act in regard to production of the arrested person before the jurisdictional Magistrate within twenty-four hours and also filing of the complaint before the Special Court within the statutory period prescribed in the 1973 Code for filing of police report, if not released on bail before expiry thereof.

As per Section 167(1) of the Code of Criminal Procedure, whenever a person is arrested and it appears that the investigation will not be completed within 24 hours, the officer in charge of the police station or the police officer making the investigation, if he is not below the rank of sub- inspector shall produce the accused before the magistrate.
While Section 167(2) states that the magistrate may authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days in the whole;

The dispute is created by the reference to police officer in subsection (1) and the term "such custody" in subsection 2 and the contention of the appellants that ED personal are not police officers and therefore cannot demand custody.

Referring to the above judgments, the Hon'ble judge decided that :-

  • Enforcement Directorate are not police officials and are not required to be so under the PMLA Act
  • The offence of money- laundering is cognizable and non-bailable and can be inquired into and investigated by the Authority under the 2002 Act alone.
  • Under The Prevention of Money-Laundering Act, 2002 (“2002 Act”), money-laundering is an independent offence and in the event there is any allegation of the Enforcement Directorate having acted beyond jurisdiction or their act of arrest is not authorized by law, the petitioner would be entitled to apply before the appropriate Court of law independently.
  • The factum of arrest is only a step in investigation. There cannot be a foreclosure of investigation or further enquiry, merely because a person has been arrested. Investigation or enquiry into the offence can continue, till a complaint is lodged and even thereafter, if further materials are collected investigation or enquiry can continue. The respondents have a right to conduct investigate / enquiry after arrest. This can never be denied to the respondents herein. If such enquiry / investigation is to be done only by taking the person arrested into custody, then this Court cannot sit as an appellate authority to examine the reasons stated therein. It is the Special Court which has the privilege to examine that particular aspect and pass orders.
Note:
This order was confirmed by the Hon'ble Supreme Court on 7/8/2023 in V . Senthil Balaji vs The State Represented By Deputy Director And Ors., Criminal Appeal Nos. 2288-2289 Of 2023


Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Amendment of plaint under Order VI Rule 17 of the CPC explained

Cause Title :  Ganesh Prasad vs Rajeshwar Prasad, SLP (C) NO. 28377 OF 2018, Supreme Court Of India Date of Judgment/Order : 14/3/2023 Corum : J. B. Pardiwala, J. Citied:  Revajeetu Builders and Developers v. Narayanaswamy & Sons and Others reported in (2009) 10 SCC 84 North Eastern Railway Administration, Gorakhpur v. Bhagwan Das reported in (2008) 8 SCC 511 P.A. Jayalakshmi v. H. Saradha and Others reported in (2009) 14 SCC 525 B.K. Narayana Pillai v. Parameswaran Pillai and Another reported in (2000) 1 SCC 712 A.K. Gupta and Sons Ltd. v. Damodar Valley Corporation reported in AIR 1967 SC 96 Life Insurance Corporation of India v. Sanjeev Builders Private Limited and Another, Civil Appeal No. 5909 of 2022 dated 01.09.2022 Firm Sriniwas Ram Kumar v. Mahabir Prasad and Others reported in AIR 1951 SC 177 G. Nagamma and Another v. Siromanamma and Another reported in (1996) 2 SCC 25 Praful Manohar Rele v. Krishnabai Narayan Ghosalkar and Others reported in (2014...
Post a Comment
Read more

Owner of vehicle is not expected to verify the genuineness of the driving license before appointing a driver

Cause Title : Rishi Pal Singh Versus New India Assurance Co. Ltd & Ors., Civil Appeal No. 4919 Of 2022, The Supreme Court Of India Date of Judgment/Order : July 26, 2022 Corum : Hemant Gupta; J., Vikram Nath; J. Background the truck owned by the appellant met with an accident. The owner deposed before the court that before employing the driver, he had taken his driving test and that he was driving the vehicle satisfactorily and  that the driver was employed with him for 3 years before the date of the accident. He produced his driving license. This was reaffirmed by the driver who deposed that the driving license was obtained from the driver and it was issued from Nagaland, but no such license was produced on record. Both the Motor Accident Claims Tribunal and the High Court have held that the owner has alleged that the driver had a driving license from Nagaland but the same was not produced and therefore, the Insurance Company is entitled to recover the awarded amount...
Post a Comment
Read more