Additional Solicitor General (ASG) of India Suryaprakash V Raju Thursday suggested to the Enforcement Directorate (ED) that arrests made at early stages of a case were not only counterproductive to investigations but also to the outcome of the case in courts.
While addressing ED officials at an event to celebrate the agency’s foundation day at Bharat Mandapam, Raju said, “Arrest is very crucial for all agencies. But it is the threat of arrest that makes people disclose details in a case. After they are arrested, their conduct changes because the threat is over. You must use your power to arrest, not liberally but sparingly. And you must not use it at an early stage of the case”.
Raju, who has represented ED in many high-profile cases, said the requirement of the Prevention of Money Laundering Act (PMLA) is that officials must have grounds of arrest and there should be “reason to believe” (that the accused is guilty of the offence). “If you arrest him at an early stage, you may not have the grounds of arrest and the ‘reasons to believe’ to undergo the scrutiny of the court. If you delay the arrest, you will get proper appreciation from the court. Many times, the courts have said the grounds of arrest are not proper,” Raju said.
Former chief minister had challenged his arrest by ED in the Delhi liquor policy case on precisely these grounds. He was granted bail by the court in July 2024, but the court had sent his plea challenging the arrest to a separate bench, where it remains pending.
Raju said hasty arrests also lead to default bail. “If you arrest the person early, your investigation is not over, and you can’t file a chargesheet within 60 days. And the person gets a default bail. He may be the worst of the offenders, but because you have arrested him early, he gets default bail,” he said.
According to Raju, early arrests also defeat the purpose of the provision of Section 50 of the PMLA. Section 50 of the PMLA grants powers to authorities regarding summons, production of documents, and taking evidence during investigations and proceedings under the Act. “Statements recorded under Section 50 are admissible as evidence. But if a person is arrested, the statement taken under Section 50 becomes vulnerable and can no longer be used as evidence. So, my suggestion is don’t be hasty in arrests,” Raju said.
Raju also said that ED must not only make an individual an accused but also the company whose affairs he or she may be managing. He said the Supreme Court has said that only if the company is guilty can the person managing its affairs be vicariously liable.
ED conviction rate
Meanwhile, Rahul Navin, Director, ED, claimed that contrary to popular perception, the agency had a conviction rate of over 93 per cent. He, however, admitted that ED needed to speed up its investigations. “We acknowledge candidly that several PMLA investigations have been pending for a very long time, and one of the focus areas this year would be to undertake efforts to complete the investigation and file the final prosecution complaint and prayer for confiscation of criminal property before the special courts. We understand that long pending investigations may fail to create deterrence and instead attract criticism,” he said.
Navin said that despite the PMLA coming into force in 2005 remained largely ineffective in its initial years, with less than 200 cases recorded per year, and that too mostly restricted to drug-related offences. The total criminal property attached was Rs. 5,171 crore till March 31, 2014, with the first prosecution complaint being filed only in 2012, he said.
“After 2014, however, there has been a significant step-up in enforcement activity and from 2014 to 2024, 5,113 new PMLA investigations were initiated, averaging more than 500 cases per year. Building on this momentum, we note with satisfaction that in the Financial Year 2024-25, 775 new PMLA investigations were launched, 333 Prosecution Complaints were filed, and notably, 34 individuals were convicted,” he said.
“During this period, ED has issued 461 provisional attachment orders valued at Rs. 30,036 crore – a 44 per cent increase in the number of attachments and a striking 141 per cent rise in their total value compared to the previous year. As on March 31, 2025, the total value of assets under provisional attachment stood at Rs. 1,54,594 crore,” he said.
However, Raju said that certain rules in the PMLA provisions to take possession of an attached property needed some amendments. He also asked the agency to focus on cryptocurrencies and hawala operators, and suggested the latter be made reporting entities and not necessarily the accused.
“Cryptocurrency must not be used for money laundering. For the purpose of the detection of money laundering, my first suggestion is that you must look at hawala operators. They are not accused, but they must be made reporting entities. They must identify and verify their clients. They must maintain records. Try to amend the law and make them reporting entities,” he said.
Prior to this, Manral had extensively reported on city-based crime stories along with that he also covered the anti-corruption branch of the Delhi government for a decade. He is known for his knack for News and a detailed understanding of stories. He also worked with Mail Today as a senior correspondent for eleven months. He has also worked with The Pioneer for two years where he was exclusively covering crime beat.
During his initial days of the career he also worked with The Statesman newspaper in the national capital, where he was entrusted with beats like crime, education, and the Delhi Jal Board. A graduate in Mass Communication, Manral is always in search of stories that impact lives.
