ED lacks power to seek custodial interrogation in money laundering case: Tamil Nadu minister to SC

Tamil Nadu’s embattled minister V Senthil Balaji and his wife Megala Thursday contested once again in the Supreme Court the ED’s power to seek custodial interrogation of an accused, asserting the officials of the anti-money laundering probe agency are not police officers.

Balaji, who continues to be a minister without portfolio in the Tamil Nadu government even after his arrest, assailed the central probe agency’s decision to arrest him in a money laundering case before a bench of Justices A S Bopanna and M M Sundresh.

“It has been held in the Vijay Madanlal Choudhary (2022 judgement) that the ED officials are not the police officers. Hence, if the court holds that they are entitled for police custody then you (the apex court) will have to hold that the ED officials are the police officers,” senior advocate Kapil Sibal, appearing for the minister and his wife, told the bench.

There is a “serious problem” if the ED officials continue to enjoy police powers without them being available to the probe agency, Sibal said.

He referred to the similar provisions of the Customs Act and the Foreign Exchange Regulation Act (FERA) and said the investigating officers are not allowed to get the police custody of an accused under these two statutes.

“It is the (state) police which gets the custody of the accused for the customs department under the Code of Criminal Procedure and not the customs officials,” Sibal said, adding likewise, under the Prevention of Money Laundering Act (Act), the ED officials do not have the power to seek custodial interrogation.

He said under the PMLA, the accused is arrested for the predicate offence and hence, there was no power to seek custody of the accused. Moreover, the complaint is lodged after the collection of evidence, he said.

Referring to PMLA provisions, the senior lawyer said, “The legislative intent is clear and specific powers of a police officer are conferred on others under certain special statutes, but not here. Hence, the ED officers cannot take further action and must produce the accused to the police.”

He referred to alleged abuse of the PMLA by the ED in the entire country.

“Let us confine ourselves to facts and law and not make political statements,” Solicitor General Tushar Mehta, appearing for the anti-money laundering agency, said.

The court will resume hearing the matter on August 2 at 12 noon.

A three-judge bench of the top court had held in 2022 in the Vijay Madanlal Choudhary case that ED officers are not olice officers.

In the verdict, the apex court had upheld the ED’s powers relating to arrest, attachment of property involved in money laundering, search and seizure under the Prevention of Money Laundering Act (PMLA).

It had, however, said authorities under the 2002 Act are “not police officers as such” and the Enforcement Case Information Report (ECIR) cannot be equated with an FIR under the Code of Criminal Procedure (CrPC).

Earlier, Sibal had argued that though the 2022 judgement has several anomalies and has been challenged on several grounds, it did hold that ED officials are not police officers and hence, the powers available to police with regard to arrest and custodial interrogation were unavailable to the anti-money laundering agency.

The solicitor general had said the plea be decided expeditiously as the probe agency only has time till August 13 to quiz the minister in custody.

He said the 60 days time, prescribed under section 167 of the CrPC, to complete the probe and for filing the charge sheet is ending on August 13.

The top court had on July 21 sought the ED’s response on the petitions filed by Balaji and his wife Megala challenging the July 14 order of the Madras High Court upholding his arrest by the probe agency in a money laundering case.

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The minister and his wife have filed two separate petitions in the top court challenging the high court order.

Besides upholding the arrest of the minister, the high court had held as valid his subsequent remand in judicial custody by a sessions court in the money laundering case arising out of the alleged cash-for-jobs scam in the state’s transport department when he was the transport minister.

The solicitor general had told the bench that the agency officers are entitled to make arrests.

“There can’t be a situation where I (ED) arrest someone only to be sent to judicial custody because the very purpose of arrest is for the purpose of investigation,” he said.

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