‘Even Private Persons Can Make Arrests, But Can They Seek Police Remand?’: Sibal In Supreme Court Argues Against ED Custody Of Senthil Balaji

The power of the Directorate of Enforcement (ED) to make an arrest under the Prevention of Money Laundering Act, 2002 cannot be conflated with the power to seek the remand of an accused in its own custody, Senior Advocate Kapil Sibal told the Supreme Court of India on Wednesday. “The investigation by the Enforcement Directorate is an inquiry for the purposes of the Prevention of Money Laundering Act. In other words, the ED officers conduct inquiries, gather evidence, and make arrests once a conclusion of guilt is reached before filing a complaint. All statements recorded during this inquiry are admissible. Now, in this context, the question arises: If ED officers are neither police officers, nor officers in charge of a police station, and the ‘investigation’ is in the nature of an inquiry, then under what power will they seek police remand?” A bench of Justices AS Bopanna and MM Sundresh was hearing a batch of pleas in connection with the ED seeking custody of DMK leader and Tamil Nadu minister Senthil Balaji in connection with a cash-for-jobs scam in the state. The minister and his wife have both filed separate petitions challenging a verdict of the Madras High Court holding that the central agency was entitled to take him into custody. Sibal argued before the apex court bench today that the Enforcement Directorate seeking custody of the minister was illegal inasmuch as they were not ‘police officers’ under the Prevention of Money Laundering Act, as per the decision of the Supreme Court in the 2022 Vijay Madanlal Choudhary judgement. In response to a query from the bench as to why the central agency could not seek police remand even though it had the power to make an arrest, Sibal said: “In regulatory statutes, the police is given the power of remand and not the officer of the concerned agency. Under the Customs Act or Foreign Exchange Regulation Act, there is still a specific provision which allows an officer, as the officer in charge of a police station, to grant bail in case of bailable offences. For non-bailable offences and further investigation, the officer will hand it over to the police. Even a provision like this does not exist in the PMLA.” To illustrate his contention that the power of arrest did not necessarily confer on an agency the power to seek police remand, Sibal used the examples of the Customs Act, 1962, and the Foreign Exchange Regulation Act, 1973: “Can a FERA officer seek police remand? He has the power to arrest. No. Can a Customs officer – who also has the power to arrest – seek police remand? The answer is no. In a customs case, for example, after a person is caught and their statement recorded, they are handed over to the police authority who seek remand. Under the Code of Criminal Procedure, even a private person can make an arrest. Will he get remand? No. There is no such law. A person has to be a police officer or an officer in charge of a police station in order to seek remand.” “In my opinion, the Vijay Madanlal Choudhary judgement is wrong and the ED officers are police officers,” the senior counsel argued, before quickly adding, “But that is for another court to decide. We cannot travel beyond the judgement.” In fact, the contentions advanced on behalf of the petitioners were based on the 2022 judgement, he insisted. He told the bench that the Vijay Madanlal Choudhary bench had rejected his argument that ED officers were police officers since they had the power to investigate: “There are two kinds of statutes in this area – regulatory statutes like the Customs Act and the Foreign Exchange Regulation Act; and penal statutes like the Narcotic Drugs and Psychotropic Substances Act. I had contended before the court that ED officers are police officers, subject to such provisions in PMLA which are inconsistent with the Code of Criminal Procedure. This is because they have been given the powers to investigate, arrest, and file a complaint in the nature of a charge sheet. This argument was rejected. The court held that the PMLA was a regulatory statute intended to protect the proceeds of crime and ED officers were not police officers. It had also held that ‘investigation’ and ‘inquiry’ were interchangeable.” Sibal argued that the Enforcement Directorate’s insistence on taking Balaji into custody flew in the face of the Vijay Madanlal Choudhary judgement, in which the agency had received a favourable ruling: “They now say, after having argued and gotten a judgement that the ED officers are not police officers, that word ‘investigation’ is there. So either Vijay Madanlal is right, or they are right. They cannot change their position. This entire scheme under the PMLA is inconsistent with the Code of Criminal Procedure. Now, they cannot bring in CrPC and insist on police remand for the purposes of an investigation.” Sibal again reiterated that no provision under the PMLA allowed the ED to ...

‘Even Private Persons Can Make Arrests, But Can They Seek Police Remand?’: Sibal In Supreme Court Argues Against ED Custody Of Senthil Balaji

Awstika Das

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