Supreme Court Limits ED’s Arrest Powers Post-Cognizance: Safeguarding Personal Liberty under PMLA

In a significant judicial intervention, the Supreme Court of India has clarified the limits of the Enforcement Directorate’s (ED) powers under the Prevention of Money Laundering Act (PMLA), 2002. The Court observed that the ED cannot exercise its power to arrest an accused under Section 19 of the PMLA after a special court has already taken cognizance of the prosecution complaint (chargesheet). This ruling addresses the growing concern over the 'necessity of arrest' and the potential for prolonged pre-trial detention. Under Section 19 of the PMLA, the ED has the authority to arrest a person if it has 'reason to believe' the individual is guilty of money laundering. However, the Supreme Court noted that once the investigation is complete and the court has taken cognizance, the accused is effectively under the jurisdiction of the court. If the ED requires custody at this stage, it must apply to the court rather than invoking its summary powers of arrest. The bench emphasized that the power to arrest is not a mandate to arrest; the agency must justify the 'necessity' of such an action, especially when the accused has cooperated during the investigation.