ED Officers Do Not Have Powers Of Police Officer, Can’t Hold Custody Beyond First 24 Hrs Of Arrest: Justice J Nisha Banu In Senthil Balaji Case

The Madras High Court on Tuesday gave a split verdict in the Habeas Corpus plea filed by S Megala, wife of Senthil Balaji against his arrest by the Enforcement Directorate. The Enforcement Directorate had arrested Balaji on June 14 in a money laundering case associated with the Cash-for-jobs scam, in which he was allegedly involved during his tenure as the Transport Minister between 2011 and 2016. Justice J. Nisha Banu of the division bench held that the Habeas Corpus petition was maintainable since the order of custody passed by the Principal Session Judge was without jurisdiction and authority and therefore illegal. Justice Banu also observed that since the Enforcement Directorate officers do not have the powers of a Station House Officer under the Prevention of Money Laundering Act, they could not have moved for custody of the Minister."Under the present scheme, the officers empowered to arrest under Sec 19 of PMLA, 2002, are required to produce the accused to the competent court within 24 hours of arrest and seek only Judicial remand and the same may be ordered by the judicial magistrate under the extant provisions of the Act. In effect, ED cannot hold custody of any person beyond the first 24 hrs of arrest," said Justice Banu.However, Justice D. Bharatha Chakravarthy disagreed with the reasonings and the conclusion reached by Justice Bano. Justice Chakravarthy passed a separate verdict, which can be read here.Whether ED has the power to seek Custody of the persons arrested? On the question of ED’s powers to seek police custody, Justice Banu observed that since the officers under the PMLA are not given powers of a police officer, they could not seek police custody. She noted that the officers empowered to arrest under Section 19 of the PMLA are required to produce the accused to the competent court within 24 hours of arrest and can only seek Judicial remand. Justice Banu opined that though normally CrPC governs the powers of arrest, search and seizure, these powers are entrusted to Officers enforcing the Special Acts like NDPS, Customs, FERA, PMLA etc. "Usually, the officers who file final report under Sec 173 CrPC after completion of investigation are police officers. The officers under special laws usually file complaint (Private) under Section 200 of CrPC after investigations. However, that alone is not the test to determine whether a particular officer has the powers of a police officer or not though it is the dominant test. The colour and character of the powers entrusted with the officers will determine whether the officers enforcing special enactments can be termed as police officers," the judge said.Justice Banu further observed that since custody heavily impinges on the fundamental right of citizens, Section 167 of the CrPC is the lone provision under which it can be awarded. No special act has ever intended to empower officers to seek custody otherwise than through the provisions of Sec 167 CrPC, the judge said."Wherever officers are empowered to conduct investigations, the machinations of CrPC becomes applicable. If any of the above provisions is violated the detention becomes illegal. Thus parliament has consciously maintained a balance between the fundamental right to liberty and the need for restraining persons in conflict with laws and the need for custodial detention to conduct investigations," Justice Banu said.Justice Banu said The Central Excise Act, 1944, The CGST Act, 2017 and FERA, 1973 indicates that Sec 167 applies only to those officers who enjoy the powers of a station house officer by virtue of them being empowered to act as an officer in charge of a police station under the CrPC and the concerned special acts."Similar provisions to empower ED Officers as Station House Officers are not provided under PMLA, 2002. It appears that the Parliament has consciously omitted to confer with the ED Officers acting under PMLA, 2002 the power of a Station House Officer.The judge added that the decision to not empower ED Officers appears "a conscious bridle considering the sweeping powers granted to the authorities under the Act. Though the offences of Money Laundering is distinct from any or all of the scheduled offences under PMLA, 2002, there is a bar on the ED officials to suo-moto file ECIR for the offence of money laundering. An FIR or Complaint by a competent authority in a predicate offence is a sine qua non for ED officials to initiate a proceeding under the PMLA." Justice Banu said Chapter IV of PMLA, 2002 obligates the Banking Companies, Financial Institutions and intermediaries that are normally touted as the routes to integrate laundered money back into the system to provide information to the Enforcement Directorate officials in the format so desired and keep records."It is a sweeping power that can help identify the trails of the proceeds of crime and the trails of the laundered money to confiscate property that are proceeds of crime so also...

ED Officers Do Not Have Powers Of Police Officer, Can’t Hold Custody Beyond First 24 Hrs Of Arrest: Justice J Nisha Banu In Senthil Balaji Case

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ED Officers Do Not Have Powers Of Police Officer, Can’t Hold Custody Beyond First 24 Hrs Of Arrest: Justice J Nisha Banu In Senthil Balaji Case

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