Can Enforcement Directorate arrest ?

It is very common these days to see ED arresting and raiding people in alleged economic offenses.

But the moot question is can ED do it ?

Supreme Court is finally going to decide  ED’s power to  launch probes, arrest, and seize evidence. 

The verdict in the case will affect the contours of the powers of the ED, DRI, Customs and other agencies that are not defined as a “police agency”.

Around 200 petitions are pending on the interpretation of the Prevention of Money Laundering Act (PMLA) and the contours of the powers of the Enforcement Directorate (ED).

Since the legal interpretation of the PMLA, Companies Act and Customs Act are under question in these cases, all trials and investigations in several high-profile cases have been left hanging till the court decides on these issues. Some of these petitions have been pending since 2014.

NOTABLE CASES UP FOR REVIEW

The cases before the Supreme Court include Karti Chidambaram’s INX media investigation, corruption charges against former Akali minister Sarwan Phillaur and his son, the e-Tender scam in Madhya Pradesh, money laundering charges against diamond trader Ritesh Jain, and other businessmen.

The recent controversy over the bribery and money laundering allegations against former Maharashtra home minister Anil Deshmukh, who had approached the Supreme Court against summons issued to him by the ED, is also part of the clutch of cases.

The special bench of Justices AM Khanwilkar, Krishna Murari and V Ramasubramaniam took note of a series of issues that have been raised in these cases.

 Supreme Court's special bench will hear several petitions that have sought urgent orders -- such as the plea by Anil Deshmukh against his ED summons, and Karti Chidambaram’s plea to release Rs 10 crore deposited as security while traveling abroad.

14 KEY LEGAL ISSUES RAISED

Legal issues that have to be decided regarding various aspects of definition of offence, investigation, evidence, arrests and search and seizure under the PMLA.

 Out of total cases, 82 cases were specifically by persons facing prosecution under PMLA, while 17 were under Companies Act and 27 under the Customs Act.

However, the main focus is on the legal questions regarding PMLA:

1. Whether the offence under PMLA is cognizable or non-cognizable offence, particularly in view of the explanation inserted in 2019?

2. Whether the procedure contemplated under all provisions of Chapter 12 of the Criminal Procedure Code 1973 is required to be followed while commencing and continuing investigation under the prevention of money laundering act, 2002?

3. Whether the twin conditions for grant of bail as provided for in section 45 of the PMLA as it stands amended is unconstitutional? Whether the amendment takes away the basis of the judgment in 2018 and revives the twin conditions for the grant of bail?

4. In case it is held that the twin conditions stand revived, whether the judgment in 2018 holding that the twin conditions cannot apply to anticipatory bail, lays down the correct proposition of Law?

5. Whether the provisions concerning the burden of proof under PMLA violate fundamental rights of the accused person?

6. What are the contours of the offence under Section 3 of the PMLA? Does the explanation to Section 3 of PMLA (added by amendment in 2019) expand the meaning of the offence under Section 3, and if so is it permissible to do so?

7. Whether the filing of a chargesheet/complaint/FIR in the predicate offence is a prerequisite for an exercise of power of arrest under the PMLA? Can money laundering not be a standalone offence in the context of section 3 read with section 2(u) of PMLA?

8. Whether reliance on the statement recorded by the officers of the Enforcement Directorate during the investigation in judicial proceedings, violate article 20(3) of the Constitution and are inadmissible in light of Section 25 of Evidence Act?

9. Whether the provisions concerning attachment of property under the PMLA violates trh right to property under article 300A

10. Whether the PMLA can be applied to acts which occurred prior to the addition of the offence under the Schedule to the Act?

11. Whether a Writ Court can grant blanket ‘no coercive steps’ order without any factual foundation being pleaded/examined merely because constitutional validity of certain provisions have been challenged?

12. Whether the Sections 17 and 18 of PMLA as amended, relating to search and seizure are unconstitutional and void?

13. Is the power of arrest conferred under section 19 PMLA violative of articles 14 and 21 of the Constitution?

14. Whether the offence of Money laundering can continue after the predicate offence has taken place? Can the offence of money laundering be committed even if the predicate or scheduled offence was not a scheduled offence on the date when the scheduled offence was committed?

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