ED to remain powerful; Supreme Court upholds inquiry, arrest under PMLA

In a judgement that retains the power of the Enforcement Directorate, the Supreme Court upheld the provisions of Prevention of Money Laundering Act (PMLA) on Wednesday. It upheld the validity of inquiry, arrest and bail provisions of the Enforcement Directorate (ED). The apex court added that the arrest and bail provisions are reasonable and have direct nexus to the objective of the Act. 

The Supreme Court said that supplying the Enforcement Case Information Report (ECIR) – copy of the complaint – to the accused is not necessary. It is enough to inform the accused about the grounds on which he or she is being arrested, said the court.

The court added that the stringent conditions for bail under the Act is legal and not arbitrary. 

Enforcement Directorate, Serious Fraud Investigation Office (SFIO), Directorate of Revenue Intelligence (DRI) officials, and not ‘police’ statements recorded during an inquiry are valid evidence, the court added. 

The court stated that money laundering is a standalone offence under the PMLA. 

A larger seven judge bench will hear the issue of whether amendments could have passed as Money Bill. 

Lawyers of the petitioners Kapil Sibal and Dr Abhishek Manu Singhvi claimed there is no established procedure for starting investigations or summoning people under the PMLA. They also went on to call the law against money laundering “Frankenstein’s monster” and claimed no details on the grounds of arrest were available to the accused.   

The petitioners questioned the powers given to the ED for search, seizure and attachment, reverse burden cast on the accused to prove innocence, the stringent conditions for granting of bail in PMLA cases. 

This judgment comes at a time when the Congress party has alleged the misuse of central agencies including the ED by the central government. Congress MPs and workers have been protesting amid ED summons to Sonia Gandhi in the National Herald money laundering case. Gandhi has already appeared twice before the ED and is scheduled to appear for the third time on Wednesday. Before that, Rahul Gandhi was also questioned by the agency for around 50 hours over five rounds of questioning.  

(With inputs from Aneesha Mathur)

Also read: Court extends custodial interrogation of accused in PMLA case involving Satyender Jain