ED’s power to issue summons under PMLA Section 50 doesn’t include power to arrest: Delhi High Court

They also have the power to compel discovery, inspection and production of documents and records; and to impound and retain records, by giving reasons in writing, the court said. Justice Bhambhani said, “To be sure, the power to arrest is conspicuously absent in Section 50 of the PMLA”.

Though, the bench said, Section 19 of the PMLA grants power of arrest to designated ED officers, “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 HC underscored that the power to issue summons under Section 50 PMLA is different and distinct from the power to arrest under Section 19 PMLA.

“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…could resist such summons expressing mere apprehension that he may face arrest at the hands of the ED, in the exercise of the powers under section 19 of the PMLA,” the HC added.

The HC also said a person apprehending arrest by the ED can file for anticipatory bail even if they are not named as an accused in the agency’s Enforcement Case Information Report (ECIR) or the prosecution complaint.

Justice Bhambhani referred to the Supreme Court’s verdict in V Senthil Balaji v State where the top court has said that non-compliance with provisions of Section 19(1) of the PMLA would “vitiate the arrest itself” and that compliance with Section 19(2) is a solemn function which “brooks no exceptions”.

The HC’s order came while dismissing the plea of one Ashish Mittal seeking quashing of the ECIR in the Educomp case. He had sought a direction that the ED be restrained from taking any coercive steps against him curtailing his liberty.

Mittal had argued 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.

The court said Mittal was not an accused in the PMLA proceeding and hence it could not agree with his apprehension that he may be subject to coercive measures.