Supreme Court Curbs ED’s Arrest Powers Post-Cognizance: Strengthening Judicial Oversight in PMLA Cases

In a significant judgment aimed at balancing the powers of investigative agencies with personal liberty, the Supreme Court of India ruled that the Enforcement Directorate (ED) cannot exercise its power of arrest under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, once a Special Court has taken cognizance of the complaint. The bench, comprising Justices Abhay S. Oka and Ujjal Bhuyan, clarified that after the court takes cognizance, the accused is technically under the custody of the court. Therefore, the ED’s executive power to arrest—which is typically used during the investigation phase—ceases to exist. If the agency requires the custody of the accused for further interrogation or due to non-cooperation, it must formally apply to the Special Court. The court will then decide on the necessity of custody after hearing both sides, ensuring that the arrest is not a result of arbitrary executive discretion.