ED Cannot Arrest Accused After Special Court Has Taken Cognisance Of PMLA Complaint : Supreme Court

By OB Bureau On May 16, 2024

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New Delhi: In a significant judgment, the Supreme Court on Thursday, said that the Enforcement Directorate (ED) cannot directly arrest a person under the Prevention of Money Laundering Act (PMLA), 2002, once a special court takes cognisance of the complaint but will have to approach the special court if it wants his or her custody.

“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 a 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 in the same offence, the ED will have to seek custody of the accused by applying to the special court,” a bench of Justices A S Oka and Ujjal Bhuyan said, LiveLaw reported.

The Supreme Court added that the special court “after hearing the accused…must pass an order on the application after recording brief reasons. While hearing such application, the court may permit custody only if it is satisfied that custodial interrogation at that stage is required even though the accused was never arrested under Section 19”.

“However, when ED wants to conduct further investigation concerning the same offence, it may arrest a person not shown as an accused in the complaint already filed, provided the requirements of Section 19 are fulfilled,” the court further said.

The bench said, “If the accused was not arrested by the ED till the filing of the complaint by taking cognisance on a complaint under Section 44 as a normal rule, the court should issue a summons to the accused and not a warrant. Even in the case where the accused is on bail, a summons must be issued.”

It added, “After summons is issued under Section 204…If the accused appears before the special court pursuant to a summons, he shall not be treated as if he is in custody. Therefore, it is not necessary for him to apply for bail. However, the special court can direct the accused to furnish bonds in terms of Section 88 of the Code of Criminal Procedure [CrPC].”

The Supreme Court said that special courts can even grant exemption from appearance in a case where the accused shows sufficient cause.

“If the accused does not appear, the special court can issue a warrant in terms of Section 70 CrPC. The special court must issue first a bailable warrant. If it is not possible to effect service of bailable warrant, then the recourse can be taken to non-bailable warrants,” the bench explained, according to the report.

The bench said that “a bond furnished according to Section 88 CrPC is only an undertaking by an accused who is not in custody to appear before the court on the date fixed”. Therefore, an order accepting bonds under Section 88 from the accused does not amount to a grant of bail, it added. If a warrant is issued on account of non-appearance, the court has the power to cancel the warrant and it is not necessary to apply for bail, the Supreme Court clarified. The top court was dealing with the question of whether the execution of bond by an accused under Section 88 of CrPC would amount to applying for bail so as to make the twin conditions of bail under Section 45 of PMLA applicable.