The Delhi High Court ruled that the power of the Enforcement Directorate (ED) to issue summons under Section 50 the Prevention of Money Laundering Act, 2002 (PMLA) does not include power to make arrest.
The immediate provocation for the petitioner, Ashish Mittal to approach the High Court is summons dated 18.08.2023 issued to him by the Assistant Director, Directorate of Enforcement, Chandigarh under section 50(2) and (3) of the Prevention of Money Laundering Act, 2002 (PMLA), requiring the petitioner to appear before the ED on 21.08.2023.
Anupam S. Sharma, Special Counsel who appeared for the respondents/ED has opposed the very maintainability of the present petition, submitting that the trigger for filing the present petition is merely a summons dated 18.08.2023 issued under section 50 of the PMLA and nothing more; and that it is settled law that a writ petition seeking stay or quashing of summons is not maintainable.
Furthermore, the counsel submitted, that in any event, the present petition is premature inasmuch as it is clear that the petitioner has not been named in the FIR registered by the CBI in relation to the scheduled/predicate offence under the scheme of the PMLA. Though neither the ECIR nor the prosecution complaint stated to have been filed pursuant thereto are on record, it was also confirmed that the petitioner is also not named as an accused in the ECIR or in the prosecution complaint so filed.
Section 50 of the PMLA confers upon specified officers of the ED, the powers vested in a civil court trying a suit; including the power to enforce the attendance of any person for recording statements on oath, with a mandate that any person so summonsed shall be bound to attend, to answer and make statements truthfully; to compel discovery, inspection and production of documents and records; and to impound and retain records, by giving reasons in writing.
A Single Bench of Justice Anup Jairam Bhambhani observed 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. The exercise of the powers under one, cannot be restrained on the apprehension that it could lead to the exercise of powers under the other. If that is permitted, any and every person summonsed under section 50 of the PMLA, to produce documents or give a statement on oath, could resist such summons expressing mere apprehension that he may face arrest at the hands of the ED, in exercise of the powers under section 19 of the PMLA. Such a position would be antithetic to the statutory scheme” the Court concluded.
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