Supreme Court Issues Notice On TN Minister Senthil Balaji's Plea Against Madras HC Allowing ED To Take Him Into Custody

The senior counsel further contended that the Enforcement Directorate was not entitled to take Balaji into police custody in any case since they did not seek his custody during the first 15 days of remand on the ground that he was hospitalised. As held in the Anupam Kulkarni case, police custody is not permissible beyond the first 15 days of remand. Although Anupam Kulkarni was doubted by a coordinate bench in the Vikas Mishra case, the former has not been overruled.

Solicitor General for India Tushar Mehta pointed out that ED officers are entitled to make arrests as per Section 19 PMLA. Also, provisions of the Code of Criminal Procedure apply to PMLA and hence Section 167 CrPC will also apply to PMLA investigation in the absence of any inconsistency. "There cannot be a situation that I arrest somebody only to be sent to judicial custody. The very purpose of arrest is investigation", he said. If there is a rigid view that police remand is not possible after 15 days, it can lead to absurd results, the SG argued, by illustrating an example of the magistrate denying the police remand and the high court later overruling that judgment. If the first fifteen days period elapse by the time of the high court's decision, would it mean that the investigating agency cannot have police custody, the SG asked.

Although Sibal sought interim protection from police custody, the bench declined to pass any such order by orally saying that "nothing will happen". The bench pointed out that the third judge, after ruling in favour of the ED, has referred the matter to the division bench to decide from which date the period of 15 days period should be reckoned. 

"We can't go take police custody because the third judge has said that the division bench will decide from when the 15th day will start. We can't go and take police custody", SG Tushar Mehta also said.

"If the division bench decides against us in the meantime, where will we go?", Sibal asked.

"Nothing will happen", Justice Bopanna assured.

Background

In June, DMK leader V Senthil Balaji and cabinet minister in the MK Stalin-led Tamil Nadu government was arrested by the Enforcement Directorate for his alleged role in a cash-for-job scam in the state, which is believed to have taken place between 2011-2016 during his tenure as the transportation minister under the then-AIADMK regime. This development came after the Supreme Court in May set aside a direction of the Madras High Court staying the proceedings in the money laundering case lodged by the Enforcement Directorate, effectively removing all fetters to the ED investigation. The top court also gave a nod to the agency to include the offences under the Prevention of Corruption Act in the investigation.

In the same month, the Madras High Court denied interim bail to Balaji but allowed his family’s request to transfer him to a private hospital. Balaji was arrested by the central agency after an 18-hour-long extensive search and interrogation conducted at his official residence, his official chamber at the state secretariat, and his brother’s residence. After the minister’s arrest, his wife filed a habeas corpus petition before the high court praying, inter alia, that the legislator be allowed to be shifted to a private hospital to undergo medical treatment.

The Enforcement Directorate challenged the high court agreeing to take the petition on board and passing an interim order before the Supreme Court, arguing that it was not maintainable. But a vacation bench of the top court adjourned the hearing in the central agency’s plea, choosing to wait for the high court to deliver its verdict first.

However, earlier in July, the high court delivered a split verdict. On the one hand, Justice Nisha Banu observed that the habeas corpus petition filed by Balaji’s family was maintainable since, inter alia, the ED officers did not have the powers of a station house officer under the Prevention of Money Laundering Act, and as such, could not have moved for the custody of the minister. On the other hand, Justice Bharatha Chakravarthy held that Balaji's arrest did not amount to illegal detention, observing not only that the ED officers were competent to seek custody, but also that Balaji’s family had not made out a case of illegal custody or a mechanical remand order, which would have warranted the interference of the high court by way of a habeas corpus petition.

Hours after this verdict, the State sought to convince the top court to hear the appeals and finally decide the matter. However, a bench headed by Justice Surya Kant refused to heed the request of the central agency to decide the questions of law involved in the case and opted to continue waiting for the outcome of the litigation pending before the high court, as it had done earlier. However, the Supreme Court requested the Madras High Court Chief Justice to place the habeas corpus petition filed by Senthil Balaji's wife Megala before a larger bench at the earliest for an expeditious decision.

Following this split verdict, Justice CV Karthikeyan, who was assigned by the chief justice to resolve the split decision in this habeas corpus petition, has settled the conflicting views by holding that the central agency was entitled to seek the custody of the minister in a money laundering case over an alleged cash-for-jobs scam in the state. Endorsing the view of Justice Chakravarthy, Justice Karthikeyan held that while officers of the Enforcement Directorate were not police officers, they were competent to take an accused into custody for further investigation and this right of the agency to take Senthil Balaji could not be denied.

After this, the Tamil Nadu minister moved the Supreme Court in an appeal against the high court’s verdict, inter alia, challenging the Enforcement Directorate’s power to seek custody of an accused in the absence of a specific provision under the Prevention of Money Laundering Act, 2002.

Case Details

1. Megala v. The State | Special Leave Petition (Criminal) No. 8652-8653 of 2023
2. V Senthil Balaji v. The State | Diary No. 28176 of 2023

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