Does arrest under PMLA close the door on further investigation, Supreme Court questions T.N. Minister Senthilbalaji’s line of argument

Senthilbalaji is facing money-laundering charges in the cash-for-jobs scam; he contends that judicial remand, and not police custody, is the natural corollary of arrest under the PMLA

A view of the Supreme Court in New Delhi. File | Photo Credit: R.V. Moorthy

The Supreme Court on Thursday, July 28, 2023 questioned an argument raised by Tamil Nadu Minister V. Senthilbalaji, who is facing money-laundering charges in the cash-for-jobs scam, that investigation should be completed in a money-laundering case before arrest of an accused person.

The Minister said the Enforcement Directorate (ED) could not seek police remand after arrest. Judicial remand, and not police custody, was the natural corollary of arrest under the Prevention of Money Laundering Act (PMLA), he contended.

Senior advocate Kapil Sibal, appearing for Mr. Senthilbalaji, has contended that the PMLA required the ED to collect evidence, complete its inquiry and find a person prima facie guilty before finally arresting him under Section 19.

The court asked whether the argument meant that the ED had no power to “further investigate” the case after arresting the accused. “Even after arrest, further investigation may be required to find out where the money has gone, to whom it went and if there was someone else involved, etc... Can you say that everything concerning the investigation is over with the arrest... That there should not be further investigation even after the arrest,” the Bench of Justices A.S. Bopanna and M.M. Sundresh asked Mr. Sibal.

Mr. Sibal, assisted by advocate Amit Anand Tiwari, has argued that the ED could not seek custodial interrogation after arrest. The PMLA, he said, required the accused person to be produced before the magistrate within 24 hours of arrest. The ED has no police power, and cannot seek police custody of an accused for “further investigation” under Section 167 of the Code of Criminal Procedure (Cr.PC), the Minister’s lawyers contended.

The Bench asked why the ED should be stopped from digging deeper into a money-laundering case after arrest. “The ED is saying so long as the investigation is not completed, it is open for them to ask for further custody of a person...,” the court said.

It was hearing the appeals filed by Mr. Senthilbalaji and his wife, Megala, against a July 14 decision of a third judge of the Madras High Court, who, following a split verdict by a Division Bench, upheld the ED’s power to seek police remand of the Minister.

Solicitor-General Tushar Mehta, for the ED, has urged the court to decide the appeals expeditiously. He has said Section 167 (procedure when investigation cannot be completed in 24 hours) of the Cr.PC provides for a maximum police remand of 60 days for these offences.

“The 60 days would be over on August 14. So, we may not be able to interrogate him even if we succeed here,” Mr. Mehta said.