Can’t invoke PMLA against ordinary citizens: Delhi court pulls up ED

New Delhi: A Delhi court on Tuesday reprimanded the Enforcement Directorate (ED) for recording statements of private doctors under the Prevention of Money Laundering Act (PMLA). The ED is bound by the rule of law and cannot act mighty against citizens who are not even a suspect, said special judge Vishal Gogne in the order passed on April 30.
The court was hearing an application moved by Amit Katyal, accused in the case related to the alleged land-for-job scam, seeking an extension of his interim bail. To oppose the application, the investigating agency had summoned the doctors, whom Katyal was consulting, under section 50 of PMLA and recorded their statements.
The court while admonishing the federal probe agency observed that the provision under section 50 cannot be used for purposes unrelated to the collection of evidence or proceedings regarding the proceeds of crime and the ED.
“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. 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,” Gogne said, declining interim bail to Katyal.
Senior advocate Vikas Pahwa, appearing for Katyal, argued that it was not only a violation of permissible action under PMLA but also an intrusion into the privacy of medical treatment which was a fundamental right of the accused. He further pointed out that the actions of ED resulted in reticence on the part of the doctors in treating the accused at one of the hospitals, where he was consulting.
“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 accused Amit Katyal”, the court said in the order.
It also noted that the rights of the citizens against being subjected to invalid processes completely trump the overreach of the law by ED.
The court further reproved ED for sharing the medical records of Katyal with two Government Hospitals, RML Hospital and DDU Hospital, and the way in which Katyal’s previous treatment was verified by private hospitals Apollo Hospital and Medanta Hospital.
“The ED neither sought the presence of the accused, let alone his consent, before the examining doctors nor sought permission from the court. The first omission possibly impinged upon the right to privacy of the accused while the second omission was an instance of overreaching the court”, special judge Gogne noted.
The court said that despite it being seized of all prayers, including independent verification or the constitution of a medical board, the ED overreached the court by not only dispatching letters to the hospitals but also examining the doctors at the private hospitals under section 50 PMLA as soon as the application for extension of interim bail was filed when it is entirely part for the proceeding before the court to routinely call for replies from hospitals and give directions for examination by medical boards.
It further noted that the actions of ED would have been more appropriately protected if the verification of Katyal’s medical records had been done on the directions of the court.
“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….The use of section 50 by the ED against the law-abiding doctors of private hospitals is a contemporary contribution to this perception. Such negation of the intended purpose of strict legislations is required to be avoided by the investigation agencies and consciously monitored by the courts”, the court order further said.
The court while dismissing Katyal’s application for extension of his interim bail noted that he is in a recovered state of health and directed him to surrender before the Central Jail Superintendent on Wednesday.
ED’s case stems from a probe by the Central Bureau of Investigation (CBI) into allegations that people were given employment in the Indian Railways at the time when Lalu Prasad Yadav was the Union railway minister.
Katyal, who is alleged to be a close associate of Lalu Yadav and his son Bihar’s deputy chief minister Tejaswi Yadav, was earlier granted interim bail by the court on February 5, 2024, for a period of four weeks on medical grounds.
ED had arrested Katyal on November 11, 2023, and has alleged that he had in connivance with Lalu Yadav hatched a conspiracy to incorporate a company in Delhi and buy land parcels situated in Bihar from prospective job seekers in lieu of providing jobs in Indian railways, thereby actively participating in the offence of money laundering.
It has been alleged that he operated companies as a front for purchasing immovable properties at undervalued rates on behalf of other accused persons, including Lalu Yadav, his family members, and associates in lieu of wrongful appointment of various persons to Group D posts in the Indian Railways during the tenure of Lalu Prasad Yadav as Railway Minister in the Government of India. The companies were later transferred to the Yadav family members at undervalued shares.