Read Time: 07 minutes

Synopsis

In a significant judgment, the Supreme Court has on May 16, 2024 has held that the Enforcement Directorate can't arrest a person once a court has taken cognizance of a complaint filed under Section 44 of the Prevention of Money Laundering Act. 

A bench of Justices Abhay S Oka and Ujjal Bhuyan said if the ED sought custody of the accused who appeared after service of summons for conducting further investigation of the same offence, the agency was required to apply to the Special Court, which must pass a reasoned order on such an application.

"When the ED has not taken the custody of the accused during the investigation, usually, the Special Court will exercise the power of cancellation of the warrant without insisting on taking the accused in custody provided an undertaking is furnished by the accused to appear regularly before the Court. When the Special Court deals with an application for cancellation of a warrant, the Special Court is not dealing with an application for bail. Hence, Section 45(1) will have no application to such an application," the bench said.

If the accused appears on summons, he should not be treated as if he is in custody and therefore, it would not be necessary for him to apply for bail. However, the Special Court may direct for furnishing of a bond in terms of Section 88 CrPC, the court said.

The court rendered its judgment to tackle a fact situation where the accused shown in the complaint under Section 44(1)(b) of the PMLA was not arrested by the ED by the exercise of power under Section 19 of the PMLA till the complaint was filed. 

"After cognisance is taken of the offence punishable under Section 4 of the PMLA based on a complaint under Section 44 (1)(b), the ED and its officers are powerless to exercise power under Section 19 to arrest a person shown as an accused in the complaint," the bench said.

The court also said if the accused was not arrested by the ED till filing of the complaint, while taking cognizance on a complaint under Section 44(1)(b), as a normal rule, the Court should issue a summons to the accused and not a warrant. Even in a case where the accused is on bail, a summons must be issued.

"It is not mandatory in every case to direct furnishing of bonds. However, if a warrant of arrest has been issued on account of non-appearance or proceedings under Section 82 and/or Section 83 of the CrPC have been issued against an accused, he cannot be let off by taking a bond under Section 88 of the CrPC, and the accused will have to apply for cancellation of the warrant," the court said.

Dealing with an appeal filed by Tarsem Lal, the court set aside the orders declining anticipatory bail.

The court directed the appellants to appear before the Special Court within a month and give an undertaking to regularly appear before it and also furnish bonds under Section 88 CrPC.

It is necessary to clarify that the warrants issued against the appellants shall be cancelled only if they make compliance within one month...After the warrants issued against the appellants are cancelled, the apprehension that they may be arrested will not survive, the bench said.