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Tarsem Lal vs. Directorate of Enforcement Jalandhar Zonal Office

Not available · 2024 INSC 434Decided 16 May 2024
Not available
Justice Abhay S. Oka · Justice Ujjal Bhuyan

Background

This judgment disposed of a batch of appeals by several accused persons in cases under the Prevention of Money Laundering Act (PMLA). In each case, the Enforcement Directorate (ED) had filed a complaint against the accused without having first arrested them. After the Special Court took cognizance and issued summons, the accused did not appear, leading the Special Court to issue warrants against them. The accused then approached the Special Court and High Courts seeking anticipatory bail (fearing arrest), but were refused; the Supreme Court had meanwhile protected them from arrest through interim orders while the appeals were pending.

Decision Breakdown

The Supreme Court held that once a PMLA complaint is filed under Section 44(1)(b), the ordinary summons procedure under the Code of Criminal Procedure (Sections 200-205) applies, and if the accused was never arrested by the ED before the complaint was filed, the Special Court should normally issue a summons, not a warrant, and the accused appearing on that summons is not to be treated as being "in custody." Because of this, such an accused does not need to apply for bail at all (and the stringent twin conditions under Section 45 PMLA for bail do not even come into play); a warrant issued only for non-appearance can simply be cancelled by giving an undertaking to appear regularly, and furnishing a bond under Section 88 CrPC is not equivalent to bail. The Court also clarified that once cognizance is taken on a complaint, the ED loses the power to independently arrest that accused under Section 19 PMLA. It must instead seek the accused's custody from the Special Court itself. Applying these principles, the Court allowed the appeals, cancelled the warrants against the appellants subject to their filing undertakings and bonds to regularly attend court, and held there was no need to separately examine their anticipatory bail pleas.

Lesson Learnt

A person who has never been arrested and instead appears before a court only because of a summons in a money-laundering complaint is not automatically "in custody" and need not go through the tough bail process: this distinction protects ordinary citizens summoned in PMLA proceedings from being wrongly treated as if they were arrested accused.

Official source (sci.gov.in)View Judgment (PDF)

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