Syllabus: GS-II, Polity and Governance;
Subject: Polity and Governance;
Topic: Enforcement Directorate, Powers of ED.
Context: the Supreme Court ruled that the Enforcement Directorate (ED) needs only to orally inform an accused of the grounds of their arrest at the time of arrest.
Case Background: Supertech Limited’s Founder’s Challenge
- Delhi High Court’s Decision: The Delhi High Court had dismissed a petition by a person to declare his arrest illegal.
- Argument: He contended that his arrest violated Section 19(1) of the Prevention of Money Laundering Act, 2002 (PMLA) and his fundamental rights, as he was not supplied with written grounds for arrest.
Key Highlights of the SC ruling:
- Oral information: Enforcement Directorate (ED) needs only to orally inform an accused of the grounds of their arrest at the time of arrest.
- This is a shift from the previous ruling of the Supreme Court on October 3 had mandated the ED to provide the grounds of arrest in writing at the time of custody.
- Requirement for Written Grounds: The court also specified that the written grounds of arrest must be supplied to the accused within 24 hours of their arrest.
Legal Framework: Section 19 of PMLA
- ED’s Arrest Power: Section 19 of the Prevention of Money Laundering Act (PMLA) authorizes the ED to arrest individuals based on material evidence.
- Notification Requirement: The law requires that the reasons for such belief must be recorded in writing, and the grounds of arrest be informed to the accused “as soon as may be.”
- Understanding ‘As Soon As May Be’: The court interpreted the phrase to mean “as early as possible”, “without avoidable delay”, “within reasonably convenient” or a “reasonably requisite” period.
Conclusion
- Legal Clarity: The Supreme Court’s ruling provides clarity on the procedures for arrests made by the ED, balancing prompt enforcement action with the rights of the accused.
- Impact on Future Cases: This decision sets a precedent for how the ED’s arrests are to be conducted, influencing future cases involving the agency.
Background:
Enforcement Directorate (ED):
- The Enforcement Directorate was established in the year 1956 as an ‘Enforcement Unit’ under the Department of Economic Affairs.
- Later, in 1957, this Unit was renamed as ‘Enforcement Directorate’.
- Presently, it is under the administrative control of the Department of Revenue (under the Ministry of Finance) for operational purposes.
Functions
- ED is responsible for enforcement of the Foreign Exchange Management Act, 1999 (FEMA), and certain provisions under the PMLA.
- ED has the power to attach the asset of the culprits found guilty of the violation of FEMA.
- It has also been empowered to undertake, search, seizure, arrest, and survey, etc. against the offences committed under PMLA.
Appointment of Director of ED
- By the central government on the recommendation of a committee:
- Chaired by the Central Vigilance Commissioner and
- Members comprising of Vigilance Commissioners, Home Secretary, Secretary DOPT and Revenue Secretary.
