NCP leader and Maharashtra minister Nawab Malik being taken to court from Arthur Road Jail in Mumbai. , Photo Credit: PTI
TeaThe Prevention of Money Laundering Act (PMLA), 2002 gave a cadre of officers under the Enforcement Directorate (ED) powers to prevent money laundering, attach proceeds of crime and seize assets. However, over the years, the ED has assumed powers similar to those of a police agency and has often been accused of tracking down political opponents of the central government. These concerns were fueled when the central government granted a third extension to ED director Sanjay Kumar Mishra, which was rejected by the Supreme Court.
ED is not police
It has been held time and again that the PMLA is a sui generis Legislation was enacted to combat money laundering through white-collar crimes. As per Section 3 of the PMLA, it is an offense of money laundering to present or claim the proceeds of crime as tainted property. Under the schedule of PMLA, several offenses under the Indian Penal Code and other special statutes have been included, which serve as the basis for the offense of money laundering. In other words, the existence of the predicate offense is sine qua non for someone to be charged with money laundering. It is important to note that the investigation and prosecution of a specific crime is generally done by the Central Bureau of Investigation (CBI) or the State Police.
Section 50 of the PMLA gives ED officers the powers of a civil court to summon persons suspected of money laundering and record statements. However, the Supreme Court held that ED officers are not police officers. seen in Vijay Madanlal Chowdhary Vs Union of India (2022) that “the process envisaged by section 50 of the PMLA is in the nature of an investigation against the proceeds of crime and is not an ‘investigation’ in the strict sense of the word for initiation of prosecution.”
There are other disparities between ED officers and the police as well. While the police are required to file a First Information Report (FIR) for a cognizable offense before starting an investigation, ED officers start with search procedures and collect material and issue summons for the purpose of locating the ‘proceeds of crime’. Let’s do our investigation with. , Any statement given by an accused to the police is inadmissible as evidence in the court, while the statement given to the ED authority is admissible. A copy of the FIR is available to the accused, whereas the information report of the enforcement case is hardly available.
During the discussion on the PMLA Bill in the Rajya Sabha in 2022, former Union Finance Minister, Jaswant Singh said that he was “not entrusted with the responsibility of acting as the policeman of the country or as a policeman on the economic front.” country’s morality. He further said, “It is not so…the intention of the government is to enact a law which can be used to disguise…political vendetta or political vendetta.”
These words were probably in reference to the powers of arrest under Section 19 of the PMLA, which allows senior ED officers to arrest any person whom they have “reason to believe” to be in possession of material is guilty of money laundering on the basis of With the stringent conditions for grant of bail under Section 45 of the PMLA, the apprehension of arrest by the ED is always real and present. However, the use of the phrase “reason to believe” indicates that the ED officers must satisfy themselves about the necessity of arrest and such belief must pass the test of reasonableness. Thus, this should be the test that courts in assessing the need for remand should apply, but rarely do.
Over the past year or so, the ED has arrested Delhi government ministers, Satyendar Jain and Manish Sisodia; former Shiv Sena minister, Nawab Malik; Former Principal Secretary to Kerala Chief Minister Pinarayi Vijayan, M. Sivasankar; Saumya Chaurasia, Deputy Secretary to Chhattisgarh Chief Minister Bhupesh Baghel; Magunta Raghava Reddy, son of YSRCP MP Srinivasulu Reddy; and Tamil Nadu minister, V. Senthil Balaji. Despite so many high-profile arrests, the ED has filed chargesheets after completing investigation in only 1,142 cases out of 5,906 cases registered since 2005. It is clear that much of the attention has been unnecessarily spent on influencing the pre-trial. Arrest and not after. It is reported that 85% of the cases registered against politicians involve people belonging to opposition parties.
role and purpose
Apart from political vendetta, this raises a more fundamental question about the role and purpose of the ED. While the police investigating the predicate offense have the right to arrest and detain the accused, the ED aims to focus on recovering the proceeds of crime so that it can be redistributed to the victims. It is not clear whether the ED has been successful in doing so. In contrast, the Crime Proceeds Act, 2002, similar legislation in the UK, focuses almost entirely on asset confiscation through dedicated civil proceedings.
Unfortunately, of late, much of the ED’s powers have been discharged in effecting pre-trial arrests, which used to be the prerogative of the police investigating the predicate offence. In the past, the CBI was used to instill fear among political opponents. In the process, the agency received censure from various courts and earned the nickname “the caged parrot”. Whether the ED will follow the same path or change its approach will entirely depend on the intervention of the constitutional courts of the country.