ED’s powers to arrest and seek custody

The Madras High Court upheld the legality of arrest of a Minster of Tamil Nadu by the Enforcement Directorate (ED) and his subsequent remand in ‘judicial custody’ in a money-laundering case linked to a cash-for-jobs scam. Key-highlights of the verdict:
  • According to the verdict, ‘ED Officers’ do not have Powers of Police Officer and they cannot hold custody beyond first 24 hours of Arrest.
  • ED can subject any person accused in a case booked under the Prevention of Money Laundering Act (PMLA), 2002, to custodial interrogation and that the person can be taken into custody even after the expiry of 15 days from his arrest.
  • However, in Central Bureau of Investigation v. Anupam J. Kulkarni (1992), the Supreme Court laid down the law that no police custody can be allowed beyond the first 15 days from the date of arrest; any further remand during investigation can only be in judicial custody.
What does Custody mean?
  • Custody means keeping the guardian of the person. If someone is being held in a particular type of custody, they are being kept in a place that is similar to a prison.
There are two types of custody in Criminal justice system:
  • Police custody: It is actually the custody of a suspect with the police in a jail at the police station, to detain the suspect. During this detention, the police officer in charge of the case may interrogate the suspect and this detention is not supposed to be longer than 24 hours.
  • Judicial custody: Judicial Custody means an accused is in the custody of the concerned Magistrate. In police custody, the accused is lodged in police station lockup while in judicial custody, it is the jail.
What is a difference between Arrest and Custody? The words “custody” and “arrest” are not synonymous. It is true that in every arrest there is custody but vice versa is not true. Arrest, remand and bail are components related to investigation. They generally come into play as an aid to investigation. Arrest directly curtails personal liberty of an individual.
 Power to interrogate in Judicial Custody:
  • Permission to interrogate – During Judicial Custody, the police officer in charge of the case is not allowed to interrogate the suspect.
  • However, the court may allow the interrogations to be conducted if it opines the interrogation being necessary under the facts produced before the court.
What are rules for detaining an accused after proved guilty?
  • The most important difference is of the fact that the accused can be sent to police custody only within first fifteen days of the presentation before the Magistrate after the arrest, as held by Supreme Court in State v. Dharampal, 1982 as mentioned in proviso (a) to section 167(2).
  • But in case of judicial custody, such person can be sent to Prison, either within first fifteen days or even thereafter.
  • Such accused can be kept in judicial custody if it’s a case of police investigation that is police report or challan has not been filed to the magistrate, within 60 days or 90 days and even then the accused does not file bail bond, then he would continue with judicial custody.
Power of ED for ‘interrogation’ and ‘Custody’:
  • Under Prevention of Money Laundering Act, 2002 (PMLA): Following the recommendations of the Financial Action Task Force (FATF) India enacted PMLA.
  • The ED has been entrusted with the responsibility of executing the provisions of PMLA by conducting investigation to trace the assets derived from proceeds of crime, to provisionally attach the property and to ensure prosecution of the offenders and confiscation of the property by the Special court.
  • The ED carries out search (property) and seizure (money/documents) after it has decided that the money has been laundered, under Section 16 (power of survey) and Section 17 (search and seizure) of the PMLA.
  • On the basis of that, the authorities decide if arrest is needed as per Section 19 (power of arrest).
  • Under Section 50 of the PMLA, the ED can also directly carry out search and seizure without calling the person for questioning.
  • It is not necessary to summon the person first and then start with the search and seizure.
  • If the person is arrested, the ED gets 60 days to file the prosecution complaint (chargesheet) as the punishment under PMLA doesn’t go beyond seven years.
  • If no one is arrested and only the property is attached, then the prosecution complaint along with attachment order is to be submitted before the adjudicating authority within 60 days.
Rights of an accused person at the time of arrest:
  • The rights of the accused begin from the time of his arrest.
  • The Constitution of India under Article 22 provides for the protection of the arrested person to the extent that he has a right to be informed of the reason for arrest and he must be produced before the nearest Magistrate within a period of 24 hours.
  • Article 22 (1) also provides that he shall be entitled to consult and to be defended by a legal practitioner of his choice (Constitution of India, Article 22 (i).
  • Section 50, Cr. P.C. which is a corollary to Article 22, Clause (1) and (5) of the Constitution of India, enacts, that the persons arrested should be informed of the ground of arrest, and of Right to bail.
Important Judgments: Supreme Court’s view: In its “Vijay Madanlal Choudhary v. Union of India”, the Supreme Court upheld various provisions of the PMLA which relate to the powers of arrest, attachment, search, and seizure conferred upon the ED. The court was of the opinion that all the provisions under PMLA have a reasonable nexus with the objects sought to be achieved by the Act to prevent money-laundering effectively. In P. Chidambaram v. Directorate of Enforcement (2019), the Supreme Court rejected a prayer for anticipatory bail with respect to an offence of money laundering and proceeded to grant custody to the ED. The court reasoned that in a case of money laundering which involves many stages of placement and layering of funds, a ‘systematic and analysed’ investigation is required which would be frustrated if pre-arrest bail is granted.

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