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Journalism of Courage
Delhi Chief Minister Arvind Kejriwal has cited Rajya Sabha elections, Republic Day celebrations and the Enforcement Directorate’s ‘non-disclosure’ and ‘non-response’ approach as reasons for not appearing for questioning before the investigating agency against its summons for appearance on January 3, in the Delhi excise policy case.
In his earlier responses to two such summonses, Kejriwal alleged in his letter that the summons were issued at the behest of the BJP and said it was unclear in which capacity he was being summoned – “as a witness or a suspect”. Jharkhand CM Hemant Soren has similarly refused seven summonses by ED in a money laundering case.
Here is all you need to know about ED summonses — and what happens when you refuse them.
The provisions of the Prevention of Money Laundering Act (PMLA) under which summons are issued nowhere mention that the investigating agency must declare that the person being summoned is an accused or not.
In fact, the provisions are not clear whether the summons are to mention the grounds for questioning of a person. In practice, however, ED always mentions the case in which a person is being summoned to give evidence.
“How can we declare a person as witness or accused even before questioning him or conducting proper investigations,” an ED official told The Indian Express.
Summons for interrogation are issued by ED under Section 50 of the PMLA. According to the provision the Director of the ED, for the purposes of investigations, has the power of civil court for inspection, enforcing attendance of a person, compelling the production of record, receiving evidence on affidavits etc.
According to the provision, “The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act”, and “all the persons so summoned shall be bound to attend in person or through authorised agents” as the ED officer may direct them to do.
What if the person refuses to appear?
The law has provision for penalty of up to Rs 10,000 and invocation of Section 174 of the Indian Penal Code that stipulates a jail term of one month and/or a fine of Rs 500 in case of non appearance against ED summons.
Under Section 63 (2) (C) of the PMLA, if a person refuses to respect the summons issued by ED or refuses to produce documents or evidence as demanded by the agency, “shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure”.
Section 63 (4) says: “Notwithstanding anything contained in clause (c) of sub-section (2), a person who intentionally disobeys any direction issued under section 50 shall also be liable to be proceeded against under section 174 of the Indian Penal Code.”
It is easier said than done. To arrest a person under Section 63 of the PMLA, the ED would have to get fresh case registered under Section 174 of the IPC and followed by a trial. Never has this route been followed in the history of the agency.
The other legal route is to get non-bailable warrants issued against the person refusing summons. However, sources said, this would not be easy since most of those refusing summons, including Kejriwal and Soren, give written reasons for non-attendance. ED would have to convince the court that the non-cooperation is deliberate and there is prima facie evidence of the person being involved.
Also court judgements have held that Section 50 does not allow ED to arrest a person summoned by it.
There are no extant provisions in the PMLA to arrest for non-cooperation. There is also no limit to how many summons the agency must issue before reaching the conclusion that the person summoned is not cooperating.
The law is clear that an arrest can be effected only if the officer is convinced that the person is guilty of the offence of money laundering.
Section 19 of the PMLA says, “If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.”
How have courts interpreted these provisons?
The Delhi High Court on October 19, 2023 said the ED’s power to issue summons under Section 50 of the PMLA does not include the power to arrest a person and said the two are different and distinct.
A single judge bench of Justice Anup Jairam Bhambhani also said the power to arrest under Section 19 of the PMLA is not untrammelled and that “authorities do not have the power to arrest on their whims and fancies”.
However, 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 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.
“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,” said the HC judge.
