Delhi Court Raps ED For 'High-Handed Act', Says It Can't Invoke S.50 PMLA Against Private Citizens Who Are Not Even Suspects

The Delhi Court yesterday rapped the Enforcement Directorate (ED) and said that as an investigative agency, it is bound by the rule of law and cannot be seen as acting mighty against the ordinary citizen who is not even a suspect.

Special Judge Vishal Gogne of Rouse Avenue Courts pulled up ED for invoking Section 50 of the Prevention of Money Laundering Act (PMLA) to record the statements of private doctors who were consulted by an accused, Amit Katyal, after being admitted to interim bail in a money laundering case. This was done to oppose Katyal's plea seeking interim bail extension.

The court said that Section 50 cannot be used for purposes unrelated to the collection of evidence or proceedings qua proceeds of crime.

“While it may be apposite to visit the full force of the law, using the strict provisions of the PMLA against accused persons, the doctors of private institutions (Apollo hospital and Medanta Hospital) were completely in the nature of private citizens who were suddenly visited by the law men from the ED, asked to state the truth about the health of the accused, told that they were under judicial proceedings and also that they could be subject to the rigors of section 193 and 228 IPC,” the court said.

The Court added that there was absolutely no justification for the ED to subject an ordinary citizen to the stringent process of Section 50 without an iota of allegation of nexus of the doctors with the allegations of money laundering against Katyal.

“The citizens possess rights while the state has certain duties. This fundamental relationship cannot be inverted to invoke an authoritarian argument that the State has certain rights against the citizens who are expected to reciprocate by submission through their duties,” the court said.

It added that not only would the acceptance of such an argument be an inversion of the social contract on which every liberal democracy is based but also a violation of the constitutional scheme and constitutional morality.

“As an agency answerable to the law and the courts, the ED cannot arrogate powers unto itself. While a government agency too is expected too be a votary of civil rights, the court will certainly not remain amiss in highlighting and rejecting an entirely high-handed act of the ED,” the court said.

It added that rights of the citizens against being subjected to invalid processes completely trump the overreach of the law by ED.

The judge ruled that the use of section 50 by the ED for recording statements of doctors on the proceedings for interim bail runs foul of the specific mandate of the provision and its exhaustive interpretation by the Supreme Court in Vijay Madanlal case.

“The true measure of power is the restraint with which it is exercised. This court shall follow the said principle in only cautioning the ED against a similar approach in future. However, it is made clear that the ED should exercise similar restraint in exercise of its own powers when a matter is subjudice. It is expected that the ED shall adhere to well settled norms of submitting to court orders when a matter is under direct consideration of the court,” the court observed.

Furthermore, the court said that ED shall be well served by calibrating its handling of the personal data of an accused, especially of the kind which is unconnected to the proceeds of crime, in light of the right to privacy recognized by the Apex Court in KS Puttaswamy case.

It said that the actions of ED would have been more appropriately protected in the case if the verification of Katyal's medical record had taken place entirely under the court directions.

“The paralel proceedings through letters dated 27.02.2024 and 28.02.2024, coupled with the statements of the doctors under section 50 PMLA were seemingly without regard to the privacy of control of the accused over his health related data,” the court said.

It added: “If there are any lessons to be learnt from history, it would be observed that 'strong' leaders, laws and agencies generally come back to bite the very citizens they vow to protect. After the masculinity of the law has been expressed against the stated targets, such laws are invariably alleged to have been employed against the average citizens.”

The court however declined Katyal's plea to extend interim bail as he was permitted normal physical activity. It noted that sufficient time has passed after his discharge upon surgery at the private Hospital.

“He is apparently in a recovered state of health and should be required to surrender. There are no grounds to extend the interim bail of the accused any further,” the court said. 

Related - Delhi Court Slams ED For Faulty PMLA Probe, Says ED Must Introspect Steps To Ensure Expeditious & Fair Investigations