A summons from the Enforcement Directorate (ED) under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA) requires the person named to appear before an ED officer, give a statement and produce the documents listed. It may be issued to a person suspected of wrongdoing, but also to a witness, a company officer or a family member.
Why the statement matters
A statement under Section 50 is recorded on oath. In Vijay Madanlal Choudhary v Union of India (2022), the Supreme Court held that ED officers are not police officers, so such statements are not barred in the way a confession to the police is, and they can be used as evidence. What is said in the first statement is therefore hard to undo later.
Before the date
- Read the summons closely. Note whether you are called as an accused or a witness, which case (ECIR) it refers to, and exactly which documents are sought.
- Collect the documents. Bank statements, company records and property papers often take time. Where the request is wide, a written request for more time, with reasons, is usually considered.
- Understand the underlying case. PMLA proceedings depend on a ‘scheduled offence’, usually a police or CBI case. Its status shapes the ED case.
- Take advice on the statement. Not to script answers, but to know the facts and the documents well, and to answer accurately.
Arrest
An ED officer may arrest under Section 19 only on the basis of material in his possession, recording reasons to believe that the person is guilty. In Pankaj Bansal v Union of India (2023), the Supreme Court held that the grounds of arrest must be given to the arrested person in writing. Bail is governed by the twin conditions of Section 45, which set a high bar, though courts also weigh long custody and delay in trial.
If the scheduled offence fails
Because money laundering depends on proceeds of a scheduled offence, the Supreme Court held in Vijay Madanlal Choudhary that where the person is finally discharged or acquitted of the scheduled offence, or the case is quashed, there can be no offence of money laundering against them on that basis.
Our Enforcement Directorate and PMLA practice acts from the first summons through bail and attachment proceedings.
This article gives general information on the law as it stood when it was written. It is not legal advice; every matter turns on its own facts.