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July 12, 2023
CHENNAI: Solicitor general Tushar Mehta cautioned against denuding the Enforcement Directorate (ED) of its power to probe while arguing before Madras HC on Wednesday, a day after senior advocate Kapil Sibal, representing arrested Tamil Nadu Minister V Senthil Balaji, questioned the central agency’s authority to “investigate” and seek custody of suspects.
Representing ED before the third judge, Justice C V Karthikeyan, during the hearing of the habeas corpus petition filed by Balaji’s wife against his arrest by the investigating agency in a Prevention of Money Laundering Act (PMLA) case, Mehta said the terms ‘inquiry’ and ‘investigation’ could be used interchangeably. It cannot be said that PMLA is only regulatory just because SC in a different context observed that the agency was not police, he said. “Even if ED is not police, it does not take away our power to investigate,” he argued before Justice Karthikeyan, who was appointed by the Chief Justice of Madras high court in view of a split verdict in the case given by a division bench of the court.
“There was no occasion for the Act to give ED the powers of a station house officer (SHO) because the Act talks about only one offence of money laundering and one punishment which is non-bailable. So only a court can give bail,” he said.
An impression is being given to ED as if it is randomly picking people and investigating, the solicitor general said, adding, “PMLA came into effect in 2005 and its validity was challenged in 2019. Till then, the agency had made only 330 arrests.” He argued: “It is not because ED is observing restraint. It is because the law takes care of it.”
Mehta said money-laundering was a global menace and, therefore, the global community entered into treaties to bring in stringent mechanisms to deal with the offence.
“Under the aegis of the UN, the Financial Action Task Force (FATF) was created to ensure that such stringent legislation is brought in by every country. A country’s finances from the World Bank and other international institutions depend upon the compliance with these statutory regimes,” the SG said.
The argument that ED lacked power to seek custody of an accused would take away the duty of the agency to investigate an offence under PMLA, he said.
He said that all the procedures under Section 19 of PMLA were scrupulously followed during an arrest because the arresting officer could be punished in case of violation of the provision. That is the reason the arrest rate is low, Mehta added.
Answering a query raised by the judge as to why ED did not take custody even though the special court granted custody, the SG said, “The conditions imposed by the sessions court made a mockery of the custody. It says we can interrogate without any hindrance to health conditions and treatment. How will we ensure it?”
The sessions court had given Senthil’s custody to ED last month, but had made it clear that the minister would remain in hospital.
Recording the submissions, the court adjourned the hearing to July 14 for senior advocate Kapil Sibal to submit his reply.
Representing ED before the third judge, Justice C V Karthikeyan, during the hearing of the habeas corpus petition filed by Balaji’s wife against his arrest by the investigating agency in a Prevention of Money Laundering Act (PMLA) case, Mehta said the terms ‘inquiry’ and ‘investigation’ could be used interchangeably. It cannot be said that PMLA is only regulatory just because SC in a different context observed that the agency was not police, he said. “Even if ED is not police, it does not take away our power to investigate,” he argued before Justice Karthikeyan, who was appointed by the Chief Justice of Madras high court in view of a split verdict in the case given by a division bench of the court.
“There was no occasion for the Act to give ED the powers of a station house officer (SHO) because the Act talks about only one offence of money laundering and one punishment which is non-bailable. So only a court can give bail,” he said.
An impression is being given to ED as if it is randomly picking people and investigating, the solicitor general said, adding, “PMLA came into effect in 2005 and its validity was challenged in 2019. Till then, the agency had made only 330 arrests.” He argued: “It is not because ED is observing restraint. It is because the law takes care of it.”
Mehta said money-laundering was a global menace and, therefore, the global community entered into treaties to bring in stringent mechanisms to deal with the offence.
“Under the aegis of the UN, the Financial Action Task Force (FATF) was created to ensure that such stringent legislation is brought in by every country. A country’s finances from the World Bank and other international institutions depend upon the compliance with these statutory regimes,” the SG said.
The argument that ED lacked power to seek custody of an accused would take away the duty of the agency to investigate an offence under PMLA, he said.
He said that all the procedures under Section 19 of PMLA were scrupulously followed during an arrest because the arresting officer could be punished in case of violation of the provision. That is the reason the arrest rate is low, Mehta added.
Answering a query raised by the judge as to why ED did not take custody even though the special court granted custody, the SG said, “The conditions imposed by the sessions court made a mockery of the custody. It says we can interrogate without any hindrance to health conditions and treatment. How will we ensure it?”
The sessions court had given Senthil’s custody to ED last month, but had made it clear that the minister would remain in hospital.
Recording the submissions, the court adjourned the hearing to July 14 for senior advocate Kapil Sibal to submit his reply.
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