Friday, May 20, 2022



Sec 45 of PMLA will only apply to those arrested by ED: Delhi Court

New Delhi, Jan 15, 2022- A Delhi Court has observed that the provisions of Section 45 of Prevention of Money Laundering Act (PMLA) will only apply if a person has been arrested by the Enforcement Directorate.

The court made the observation recently while granting bail to accused in a case titled “Directorate of Enforcement Vs. Zenic Cars India Pvt. Ltd. & Ors”, concerning the commission of offences under section(s) of the Prevention of Money Laundering Act.

The order was passed by the Court of Naveen Kumar Kashyap, Special Judge, Tis Hazari, while deciding the regular bail applications filed by the accused persons under section 439 Cr.P.C.

The applications were filed by the accused persons pursuant to the issuance of summons by the Special Court, on a complaint filed by the Directorate of Enforcement, alleging commission of offences under section 3 read with 70 of the Act. Suffice to state that the accused persons were never arrested by the ED during the investigation. The accused persons were the authorised dealers of Audi and Porsche cars.

They were represented by Senior Advocate Pramod Kumar Dubey and instructed by a team from Karanjawala & Co., Advocates led by Samarjit Pattnaik-Partner and Puneet Relan and Irfan Muzamil- Senior Associates, Mohd. Faraz, Special PP, Aappeared for the Directorate of Enforcement.

Senior Advocate Pramod Kumar Dubey, appearing for the accused persons, argued that the twin test laid down under section 45 (1) (ii) Prevention of Money Laundering Act 2002, would be attracted while adjudicating upon a bail plea of an accused who has been arrested by the ED under section 19 of the Act and the amendment in 2018 in section 45 of PMLA does not revive the twin conditions already struck down by the Supreme Court in the matter of Nikesh Tarachand.

On the other hand, it was argued by the Spl. PP for ED that the twin condition for grant of bail under section 45 (1) is required to be complied with, as the validity of the provision was restored by 2018.

Counsel for the ED also stated that section 45 (1) has neither been stayed nor has its operation been rendered as nullity by any order of the Supreme Court.

Additional Sessions Judge, District Court Tis Hazari, Naveen Kumar Kashyap while granting bail observed that section 45(1) PMLA as it stands today contains the phrase “shall be released on bail”. As such, for section 45 PMLA to come into operation, a person has to be arrested first.

The Court also observed that Article 21 of the constitution mandates that no person shall be deprived of his life and personal liberty except according to procedure established by law. Article 21 in view of its expansive meaning not only protects life and liberty but also envisages a fair procedure.  (Agency)

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