The Supreme Court has laid down guidelines for special courts dealing with complaints filed by the Enforcement Directorate under the Prevention of Money Laundering Act, 2002.
The issue arose in Tarsem Lal v Directorate of Enforcement, Jalandhar Zonal Office, where the appellant was denied anticipatory bail. The appellant was never arrested after registration of the enforcement case information report by the directorate. The directorate’s complaint was filed for an offence punishable under section 4 of the laundering act. The appellant did not appear before the special court after a summons was served on him and a warrant was issued. The appellant then applied for anticipatory bail before the special court and the high court, but both applications were rejected.
The Supreme Court laid down these guidelines for special courts dealing with complaints under the money laundering act:
- Once a 44(1)(b) complaint is filed, it will be governed by sections 200 to 205 of the criminal procedural code; none of the provisions are inconsistent with the act;
- If an accused was not arrested by the directorate before the complaint was filed, a court should normally issue a summons and not a warrant. Even if the accused is on bail, a summons must be issued;
- If an accused appears before the special court in response to the summons, he/she shall not be treated as if he/she is in custody. Therefore, it is not necessary for him/her to apply for bail. However, the special court can direct an accused to furnish a bond under section 88 of the code;
- If an accused appears before a special court in response to a summons, and sufficient cause is shown, the special court can exempt him/her from personal appearance under section 205 of the code;
- If an accused does not appear after a summons, or does not appear on a subsequent date, a special court may issue a warrant under section 70 of the code. Initially, the special court should issue a bailable warrant. If it is not possible to effect service of the bailable warrant, then a non-bailable warrant can be issued;
- Where an accused has provided a section 88 bond but fails to appear on subsequent dates, the special court has the power (section 89, read with section 70 of the code) to issue an arrest warrant. If issued, it will always be open for the accused to apply for cancellation by giving the special court an undertaking to appear on all the dates fixed by the court. When dealing with an application for cancellation of a warrant, a special court is not dealing with an application for bail. Hence, the twin conditions under section 45(1) of the act do not apply;
- When an accused appears on summons, a special court is empowered to take bonds. However, it is not mandatory in every case. However, if a warrant of arrest has been issued for non-appearance or proceedings under section 82 and/or section 83 of the code, an accused cannot lodge a bond under section 88 of the code but must apply for cancellation of the warrant; and
- After cognisance is taken of the offence punishable under section 4 of the act based on a complaint under section 44 (1)(b), the directorate cannot exercise power under section 19 to arrest the accused in the complaint.
If, after an accused appears on summons, the directorate wants custody of him/her for further investigations into the same offence, the directorate must apply to a special court for that custody.
After hearing the accused, the special court must pass an order on the application by recording brief reasons. While hearing such an application, the court may permit custody only if it is satisfied that custodial interrogation is required, even though the accused was never arrested under section 19.
? However, when the directorate wants to conduct a further investigation concerning the same offence, it may arrest a person not shown as an accused in the complaint already filed under section 44(1)(b), provided the requirements of section 19 are fulfilled.
The dispute digest is compiled by Numen Law Offices, a multidisciplinary law firm based in New Delhi & Mumbai. The authors can be contacted at support@numenlaw.com. Readers should not act on the basis of this information without seeking professional legal advice.
