The Allahabad High Court has recently ruled that the Enforcement Directorate (ED) must include details of the predicate offence in any summons issued under the Prevention of Money Laundering Act (PMLA). This directive was issued in response to a plea by Ankur Aggarwal, who had challenged the legality of a summons issued to him by the ED without any mention of a predicate offence.
Background of the Case: Ankur Aggarwal had received a summons from the ED last month under Section 50 of the PMLA, requiring his presence for an investigation. However, Aggarwal contended that the summons did not specify any predicate offence, making it unclear why he was being summoned. His legal counsel argued that the summons lacked essential details and that Aggarwal should not be compelled to appear without knowing the basis of the ED’s investigation against him.
Court’s Observations: Justice Rajesh Singh Chauhan, presiding over the case, ruled that the ED must mention at least some reference to the predicate offence in its summons. The Court directed the ED to disregard the previously issued summons and instead issue a fresh one with all relevant details.
The Court further stated: “If the competent authority or the Enforcement Directorate issues a summons under Section 50 of the Act seeking appearance, at least some reference or detail of the predicate offence must be provided so that the person concerned can appear before the authority with complete details.”
Arguments Presented: The counsel representing Aggarwal submitted that his client may have been summoned in connection with a case related to the UP Pollution Control Board. However, they pointed out that a closure report had already been filed in that matter, raising concerns about the basis of the ED’s summons.
On the other hand, the ED’s counsel argued that if a summons had been issued, an investigation must be ongoing. However, when questioned on why specific details were missing from the summons, the ED’s counsel requested more time to respond.
Court’s Decision and Order: The Allahabad High Court declined to examine the merit of the allegations but directed the ED to issue a fresh summons with clear details of the predicate offence if there was valid material against Aggarwal.
The Court also ruled that Aggarwal must cooperate with the investigation and appear before the competent authority. However, it stated that he should not be arrested after appearing in response to the fresh summons.
“The applicant shall appear before the competent authority on the date fixed and shall cooperate in the investigation, but he may not be arrested after his appearance. However, if the applicant fails to appear pursuant to the fresh summons, the benefit of this order will not apply.”
The Court clarified that if any new material or evidence emerges against Aggarwal in connection with a predicate offence, the ED may proceed as per the legal framework.
Implications of the Ruling: This ruling reinforces the legal requirement for transparency in ED proceedings under the PMLA. It ensures that individuals summoned under the Act are provided with adequate details of the allegations against them, allowing them to prepare a proper legal defense.
Legal experts believe this decision will strengthen procedural fairness in money laundering investigations and prevent arbitrary use of ED’s powers under PMLA.