16 May 2024 Prevention Of Money Laundering Act >> Criminal Law  

A recent Supreme Court judgement has brought much-needed clarity and protection to the rights of individuals accused of money laundering under the Prevention of Money Laundering Act (PMLA). This is significant news for anyone who has been named in a PMLA complaint, as it clarifies the procedures for arrest, bail, and court appearances.

Background:

The judgement emphasizes that the Code of Criminal Procedure (CrPC) governs PMLA proceedings, unless the PMLA itself overrides a specific CrPC provision. This means standard CrPC rules for issuing summons and warrants apply to PMLA cases as well. The court has ruled that authorities cannot arrest an accused under the PMLA if they appear in court after receiving a summons, assuming they weren't previously arrested during the investigation. This is a key protection for those named in a PMLA complaint.

Bond for Future Appearances:

The judgement clarifies that appearing in court on a summons does not equate to being in custody. The court can request a bond from the accused under Section 88 of the CrPC to ensure their future appearances in court. However, it's not mandatory for the court to demand a bond in every case. Notably, accepting a bond under Section 88 is not considered granting bail.

What Happens If the Accused Doesn't Appear?

If the accused fails to appear after a summons, the court has the authority to issue a warrant for their presence. This warrant can be either bailable or non-bailable. The accused can then apply to have the warrant cancelled by giving an undertaking to appear in court.

ED's Power to Arrest After Complaint:

The judgement clarifies that once a PMLA complaint is filed, the Enforcement Directorate (ED) cannot arrest an accused named in the complaint without first applying to the court. The court will only grant custody of the accused to the ED if it's convinced that custodial interrogation is absolutely necessary.

A Fairer Process:

This judgement is a welcome development for PMLA cases. It ensures a more balanced and predictable legal process for the accused while upholding the need for investigation and trial. By protecting the rights of those who respond to summons, the court has struck a better balance between investigation and individual liberty.

PREVENTION OF MONEY LAUNDERING ACT, 2002