Weekly Legal Updates ( 12 May 2024 to 18 May 2024)

Supreme Court says ED can’t arrest accused after special court takes cognizance of PMLA complaint

The Supreme Court, in a landmark judgment, on Thursday, May 16, held that the Enforcement Directorate (ED) and its officers cannot arrest an accused under Section 19 of the Prevention of Money Laundering Act (PMLA) after the Special Court has taken cognizance of the complaint of money laundering.

The bench of Justices Abhay S Oka and Ujjal Bhuyan added that if the ED wants custody of such an accused, then it would have to apply to the special court.

The Bench says, “After cognizance is taken of the offence punishable under Section 4 of the PMLA based on a complaint under Section 44, the ED and its officers are powerless to exercise powers under Section 19 to arrest the person shown as accused in the complaint. If the ED wants custody of the accused who appears after service of summons for conducting further investigation of the same offence, ED will have to seek custody of the accused by applying to the Special Court. After hearing the accused, the Special Court must pass an order on the application after recording brief reasons. While hearing the application, the Court may permit custody only if it is satisfied that custodial interrogation is required even though the accused was never arrested under Section 19”

The verdict was delivered in a case addressing whether an accused in a money laundering case has to meet the stringent twin-test for bail, even when the special court takes cognizance of the offense, Bar and Bench reported.

The Supreme Court, having reserved its judgment on April 30, examined whether an accused, not arrested during the investigation under PMLA, would still be subject to the law’s bail conditions upon appearing before the court after the trial court acknowledges the ED complaint and summons the individual.

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