SC upholds ED's powers to arrest under money laundering act
In a big win for the Enforcement Directorate (ED), the Supreme Court upheld the agency's powers to make arrests under the money laundering act. In a crucial judgment, a 3-judge bench on Wednesday validated the most stringent provisions of the Prevention of Money Laundering Act (PMLA). The top court rejected several petitions against the powers accorded to the ED under the law.
- The ED is the Government of India's economic-law imposing agency that looks after financial crimes.
- It is responsible for enforcing two key acts, the PMLA, and the Foreign Exchange Management Act (FEMA).
- However, over the last few years, ED's action on opposition leaders has been viewed as an attempt to use the law enforcement agency as a political tool.
The bench, headed by Justice AM Khanwilkar, upheld the ED's power of arrest, attachment, and search and seizure under PMLA, while also confirming the "twin conditions" for bail. The court also noted that ED officials are not "police officers under CrPC," and said that "statements before ED officials count as evidence." Additionally, the bench said that the powers of the ED are "not arbitrary."
As per SC, ED officials don't need to disclose grounds of arrest when detaining an accused. The officials also don't need to prove ECIR (copy of the complaint) to the accused, as it is "not an FIR." The court upheld the twin bail conditions- courts must hear a public prosecutor against the plea and believe the accused is not guilty of offense.
Over 100 petitions clubbed together argued against ED officials not being obligated to follow CrPC during investigations. They stated that the procedure for starting an investigation, summoning witnesses and accused, and attaching assets violates the fundamental law of liberty. Petitioners also reflected on the difficulty to attain bail under PMLA and argued that putting the burden of proof on the accused violates fundamental rights.
Raids by the agency are up 26 times since PM Narendra Modi's election. However, according to the Finance Ministry, only 23 have been convicted in 3010 raids in the last eight years. Some high-profile cases being investigated by ED include Nirav Modi and Mehul Choksi (for Rs. 11,000 crore PNB fraud), and Vijay Mallya (for Rs.. 7,800 SBI fraud).
The agency has been criticized for repeatedly targeting Opposition leaders in alleged money-laundering cases. Recent examples include ED's action on West Bengal minister Partha Chatterjee, J&K leader Farooq Abdullah, and its ongoing questioning of Rahul Gandhi and Sonia Gandhi. In the recent past, the ED has also targetted Delhi minister Satyendar Jain and former Finance Minister P Chidambaram.