Supreme Court Limits ED’s Arrest Powers Post-Cognizance: Reaffirming Personal Liberty under PMLA
The Supreme Court has ruled that the Enforcement Directorate cannot arrest an accused under Section 19 of the PMLA once a special court takes cognizance of the complaint. This landmark judgment emphasizes judicial oversight and protects the fundamental right to personal liberty against arbitrary executive action.
In a significant verdict, the Supreme Court of India has curtailed the powers of the Enforcement Directorate (ED) regarding the arrest of individuals under the Prevention of Money Laundering Act (PMLA), 2002. The bench ruled that once a Special Court takes cognizance of a money laundering complaint, the ED loses its authority to arrest the accused under Section 19 of the Act.
Section 19 of the PMLA grants the ED the power to arrest a person if there is "reason to believe" they are guilty of money laundering. However, the Court clarified that this power is limited to the investigation stage. Once the complaint reaches the judicial stage (cognizance), the agency must follow the court's directions. If the ED requires the custody of an accused who was not arrested during the investigation, it must apply to the Special Court, which will then decide on the necessity of detention. This shift ensures that the agency cannot bypass the court to effectuate arrests after the investigation is technically complete.
Crucially, the Court held that if an accused appears before the Special Court in response to a summons, they cannot be considered in "custody." Therefore, they do not need to apply for bail or satisfy the stringent "twin conditions" under Section 45 of the PMLA. Instead, the court may simply ask the person to furnish bonds for appearance. This prevents the PMLA—a law with exceptionally high barriers for bail—from being used as a tool for prolonged pre-trial detention without judicial intervention.
This judgment is a vital intervention in the ongoing debate over the potential misuse of central agencies. By reinforcing that the "power to arrest is not a mandate to arrest," the Court has upheld the sanctity of Article 21. It restores the balance between the state's power to investigate financial crimes and the individual's right to liberty, ensuring that judicial oversight remains the primary safeguard against executive overreach.
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