Chambers of Ishaan Garg
Ch. No. 217, Western Wing, District & Sessions Court, Tis Hazari, New Delhi, Delhi 110054
+91 8851742417, +91 8800386163
The Directorate of Enforcement is a multi-disciplinary organization mandated with investigation of offence of money laundering and violations of foreign exchange laws. The statutory functions of the Directorate include enforcement of following Acts:
1. The Prevention of Money Laundering Act, 2002 (PMLA): It is a criminal law enacted to prevent money laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. ED has been given the responsibility to enforce the provisions of the PMLA by conducting investigation to trace the assets derived from proceeds of crime, to provisionally attach the property and to ensure prosecution of the offenders and confiscation of the property by the Special court.
2. The Foreign Exchange Management Act, 1999 (FEMA): It is a civil law enacted to consolidate and amend the laws relating to facilitate external trade and payments and to promote the orderly development and maintenance of foreign exchange market in India. ED has been given the responsibility to conduct investigation into suspected contraventions of foreign exchange laws and regulations, to adjudicate and impose penalties on those adjudged to have contravened the law.
3. The Fugitive Economic Offenders Act, 2018 (FEOA): This law was enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. It is a law whereby Directorate is mandated to attach the properties of the fugitive economic offenders who have escaped from the India warranting arrest and provide for the confiscation of their properties to the Central Government.
4. The Foreign Exchange Regulation Act, 1973 (FERA): The main functions under the repealed FERA are to adjudicate the Show Cause Notices issued under the the said Act upto 31.5.2002 for the alleged contraventions of the Act which may result in imposition of penalties and to pursue prosecutions launched under FERA in the concerned courts.
5. Sponsoring agency under COFEPOSA: Under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA), this Directorate is empowered to sponsor cases of preventive detention with regard to contraventions of FEMA
Criticism- PMLA Misuse.
Controversial Judgments by the Supreme court must read them--
Vijay Madanlal Choudhary v. UOI, 2022 which upheld the drastic powers of the agency for arrest and seizure under the Prevention of Money Laundering Act. This judgment held that statements made to ED officers are admissible in evidence because they are, technically, not 'police officers', even while possessing all police powers of arrest and seizure.
The judgment upheld the provisions relating to presumption of guilt, reversal of burden of proof and the stringent twin conditions for bail - one among them being the near impossibility that the Court should be satisfied that the accused will not commit any offence in the future. Also, the judgment expanded the interpretation of 'money laundering', which was further expanded by a subsequent judgment in Y.Balaji v. Karthik Desari , as a result of which the ED can launch its investigation automatically on registration of a predicate offence, even before tracing any proceeds of crime.
Recent Judgment ---
Pankaj Bansal v. UOI, 2023
The ED should inform the grounds of arrest to the accused in writing. Mere oral reading out of the grounds will not suffice.
ED cannot arrest a person citing mere non-cooperation to the summons.
If arrest is invalid, then the subsequent remand order will also fail; judicial order of remand can't validate an illegal arrest.
