Central Idea

The Supreme Court ruled on the procedures for arrests made by the Enforcement Directorate (ED).

About Enforcement Directorate (ED)

	Details
Establishment	May 1, 1956 Initially set up as an ‘Enforcement Unit’
Mandate	Enforces economic and financial regulations
Jurisdiction	Nationwide
Legal Authority	– Prevention of Money Laundering Act, 2002 – Foreign Exchange Management Act, 1999
Functional Focus	Economic and financial offenses including money laundering, foreign exchange irregularities
Investigative Powers	– Attachment, confiscation, and arrest – Conduct raids and searches – Summon and question individuals
Collaboration	Coordinates with various agencies (CBI, local police) and banks
Reporting Authority	Department of Revenue, Ministry of Finance
Corruption Investigations	Has a separate Economic Offenses Division
Notable Cases	– Vijay Mallya extradition – PNB fraud case – Augusta Westland VVIP chopper scam
International Cooperation	Works with international law enforcement for cross-border investigations (Interpol, FATF)
Public Interface	Accepts complaints and information regarding economic offenses
Transparency and Accountability	Regular reports to the Ministry of Finance; subject to oversight by judiciary and government bodies

Supreme Court Ruling: On Friday, the Supreme Court ruled that the Enforcement Directorate (ED) needs only to orally inform an accused of the grounds of their arrest at the time of arrest.
Requirement for Written Grounds: The court also specified that the written grounds of arrest must be supplied to the accused within 24 hours of their arrest.

Earlier Mandate: A two-judge Bench of the Supreme Court on October 3 had mandated the ED to provide the grounds of arrest in writing at the time of custody.
Current Ruling: The latest ruling by Justices Bela Trivedi and Satish Chandra Sharma modified this requirement.

ED’s Arrest Power: Section 19 of the Prevention of Money Laundering Act (PMLA) authorizes the ED to arrest individuals based on material evidence.
Notification Requirement: The law requires that the reasons for such belief must be recorded in writing, and the grounds of arrest be informed to the accused “as soon as may be.”
Understanding ‘As Soon As May Be’: The court interpreted the phrase to mean “as early as possible”, “without avoidable delay”, “within reasonably convenient” or a “reasonably requisite” period.

Delhi High Court’s Decision: The Delhi High Court had dismissed a petition by a person to declare his arrest illegal.
Argument: He contended that his arrest violated Section 19(1) of the PMLA and his fundamental rights, as he was not supplied with written grounds for arrest.

Non-Retrospective Application: The court stated that the October 3 ruling in Pankaj Bansal vs. UOI cannot be applied retrospectively to cases before that date.
Reference to Vijay Madanlal’s Case: The court relied on its July 27 decision in Vijay Mandanlal Choudhary vs. UOI, by a three-judge Bench, to support its ruling.
Upholding PMLA Provisions: The validity of Section 19 was upheld, affirming its reasonable nexus with the PMLA’s objectives.

2002 Ruling: In “Pradip Chandra Parija vs. Pramod Chandra Patnaik,” a Constitution Bench ruled that if two Benches of equal strength arrive at different conclusions on the same question of law, the matter must be referred to a higher Bench.
Implications for Current Case: This precedent is relevant in resolving discrepancies when two Benches of equal strength, like in the current scenario, differ in their rulings.

Legal Clarity: The Supreme Court’s ruling provides clarity on the procedures for arrests made by the ED, balancing prompt enforcement action with the rights of the accused.
Impact on Future Cases: This decision sets a precedent for how the ED’s arrests are to be conducted, influencing future cases involving the agency.