 "Enforcement directorate")
The Delhi High Court on Thursday said the power of Enforcement Directorate (ED) to issue summons under Section 50 of the Prevention of Money Laundering Act (PMLA) does not include the power to arrest a person.
"To be sure, the power to arrest is conspicuously absent in Section 50 of the PMLA," said the court.
Justice Anup Jairam Bhambhani said that the power of arrest under Section 19 of the PMLA is not untrammelled. "The authorities do not have the power to arrest on their whims and fancies. There is a threefold requirement that must be complied with before arresting a person: Firstly, the Director must entertain a reasonable belief that the person arrested is guilty of an offence under the PMLA, and not under any other enactment; Secondly, the reasons for such belief must be recorded in writing; and Thirdly, such belief must be based on material that is in the Director's possession," the court stated.
The court said that though Section 19 of the PMLA empowers designated officers of the ED to arrest any person, subject to satisfying the conditions mentioned in that provision, it is clear that the power to arrest does not reside in Section 50, nor does it arise as a natural corollary of summons issued under Section 50.
"The power under Section 50 of the PMLA to issue summons to a person and to require the production of documents and record statements, which is akin to the powers of a civil court, is different and distinct from the power under Section 19 to arrest a person. These are two separate and distinct provisions," said the court.
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The order came on a plea of one Ashish Mittal seeking quashing of the ECIR in the Educomp case. Mittal sought a direction that the ED be restrained from taking any coercive steps against him, curtailing his liberty. The plea was dismissed.
Mittal said he had "strong apprehension" that he would be illegally detained/arrested by ED and would be made a "scapegoat to protect the interest of the main promoters/alleged main beneficiaries" of the company.
Notably, a copy of the impugned ECIR has not been filed along with the petition. The petitioner (Mittal) says that he has not been supplied a copy of the impugned ECIR till date.
The court said it is significant to note that in the present case, what the petitioner seeks as the main relief, is the quashing of a document viz. the ECIR (Enforcement Case Information Report), which is not even available with him. Nor has the ECIR been produced in court. "Also, in Vijay Madanlal Choudhary and Others vs. Union of India and Others, the Supreme Court has held that since an ECIR is an internal document, it is not mandatory for the ED to furnish a copy of the ECIR to a person who is under investigation, much less would that be the case for a person who has only been summoned under Section 50 of the PMLA," the court said.
The court said that since the ECIR is not before the court, nor is the petitioner entitled, as a matter of law, to be given a copy of the ECIR, there is obviously no way that the court can assess and evaluate the grounds on which the petitioner seeks quashing of the ECIR.
"On the other hand, however, the ED has categorically stated in their reply filed in these proceedings, that the petitioner is not named as an accused in the ECIR; nor is he named as an accused in the scheduled offence registered by the CBI, which is the foundation of the proceedings in the ECIR," the court said.
