PMLA Complaint: Apex Court Clarifies on Cancellation of Warrant

In a case involving the offence of money laundering, the Supreme Court recently held that the accused was open to apply for cancellation of the warrant issued by the Special Court on failure of the accused to appear after furnishing bond.[1]

The present criminal appeals were filed by accused persons named in complaints filed under Section 44(1)(b) of the Prevention of Money Laundering Act, 2002, challenging the orders denying them anticipatory bail. The appellants were not arrested till the filing of the complaint. As the appellants failed to appear before the Special Court upon service of summons, warrants were issued for procuring their presence. Apprehending arrest, the appellants filed applications for anticipatory bail which was later rejected. The appellants approached the Supreme Court after their request was turned down by the High Court.

The Court observed that when a complaint was filed under Section 44(1)(b) of PMLA and the accused appeared before the Special Court on the returnable date of summons and furnished bonds under Section 88 of the Code of Criminal Procedure, 1973, but did not appear subsequently, Section 89 of the Code empowered the Special Court to issue a warrant (bailable/ non-bailable) for his arrest. This warrant was for securing the accused’s presence before the Special Court and an application for bail was not required. The accused person could apply for cancellation of the warrant by giving an undertaking that he would appear before the Court on all the dates fixed by it. The Court remarked, “When the ED has not taken the custody of the accused during the investigation, usually, the Special Court will exercise the power of cancellation of the warrant without insisting on taking the accused in custody provided an undertaking is furnished by the accused to appear regularly before the Court.” The Court added that in scenarios where the application for cancellation of the warrant was dealt with, the same could not be equated with an application for bail and consequently, the twin conditions under Section 45(1) did not apply. The twin conditions include giving an opportunity to the public prosecutor to oppose the application and satisfaction of the Court of the existence of reasonable grounds for believing he is not guilty of the offence and that he is not likely to commit any offence while on bail.

It was made clear that after cognisance of a complaint filed under Section 44(1)(b) was taken by the Special Court, the power to arrest (accused named in the complaint) under Section 19 could not be exercised and an apprehension regarding arrest by the Enforcement Directorate couldn’t exist. However, the attention of the Court was drawn to the practice followed by certain Special Courts under PMLA; accused persons were often taken into custody after they appeared pursuant to service of summons which led many to apply for anticipatory bail. Condemning such practice, the Court emphasised that if custody of the accused was sought by the Enforcement Directorate, an application had to be filed before the Special Court.

Allowing the appeals, the Supreme Court set aside the impugned orders and directed the cancellation of warrants subject to the appellants’ appearance before the Special Court, submission of an undertaking regarding subsequent appearances and furnishing of bonds.

[1] Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Office (Criminal Appeal No.2608 of 2024) along with seven other cases.