The Delhi High Court on Thursday said the Enforcement Directorate (ED)’s power to arrest under section 19 of the Prevention of Money Laundering Act (PMLA) is not "untrammelled", adding that the authorities do not have "the power to arrest on their whims and fancies."
Justice Anup Jairam Bhambhani also said that 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 single-bench judge held.
The court also said there is a threefold requirement that must be complied with before arresting a person.
"Firstly, the director must entertain a reasonable belief that the person arrested is guilty of an offence under the PMLA and not under any other enactment; secondly, the reasons for such belief must be recorded in writing; and thirdly, such belief must be based on material that is in the director’s possession," the order read.
The bench said under Section 50 of the PMLA, ED officers have the power to enforce the attendance of any person for recording statements on oath, with a “mandate that any person so summoned shall be bound to attend, to answer and make statements truthfully”.
The high court said, under Section 50 of the PMLA, officers of the agency have 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."
"To be sure, the power to arrest is conspicuously absent in Section 50 of the PMLA," the court said in the order.
Making the observations, the high court, however, dismissed a plea filed by Ashish Mittal seeking quashing of the ECIR in the Educomp case, saying "the petition is premature."