Don't Have Power To Seal Premises If Locked During Search: ED Admits Before Madras High Court

The Enforcement Directorate, on Tuesday, admitted before the Madras High Court that it did not have power to seal premises if the same was locked at the time of making a search as per Section 17 of the Prevention of Money Laundering Act. 

The bench of Justice MS Ramesh and Justice V Lakshminarayan was hearing petitions filed by film producer Akash Bhaskaran and businessman Vikram Ravindran against the ED's search conducted at their residence and office and to declare the same as illegal. It was alleged that the ED had sealed the residential flat and the office since it was locked at the time of search.

The bench has reserved orders on the interim applications and has adjourned the main petitions by four weeks. 

During the hearing, the judges wondered if ED had the power to seal the premises, and questioned as to which provision allowed the ED to seal.To this, ASG SV Raju admitted that ED did not have such powers. Raju further submitted that as per Section 17 of PMLA, the ED had the power to break open a locked premise's seal. He added that the ED did not take such action in the present case since it did not want to escalate the situation. 

"ED does not have power to seal. The lordship is right in that aspect. Under Section 17, the ED has powers to break open the lock. But we did not want to escalate the situation," Raju said. Raju also informed the court that the ED was ready to withdraw the notices and would permit the petitioners to access their office and residence. 

The bench interjected and said that by saying that the ED would "permit" the petitioners, there would be a presumption that the ED had power to prohibit the petitioners also. The bench informed that the petitioners had attacked the present proceedings on two grounds - ED's authorisation and the sealing. 

When the matter was taken up yesterday, the judges posed a similar question and commented orally that the ED officers were evolving by expanding their powers day by day. ED Special Prosecutor N Ramesh informed the bench that the search was based on credible information and statements of the witnesses. The bench had then asked the ED to produce the materials, relied by it. 

Following this, when the ED produced the documents, the bench proceeded to pursue the documents and noted that the same did not tally with the submissions made by the ED. 

"Information in your possession has been given to us. But it does not tally with your submission. We had asked the ED to produce the documents based on which they had reason to believe with respect to the petitioners. This is not that. According to the ASG, the 41 FIRs are the basis for reason to believe under Section 17. But that does not tally with your (ED's) submission. There's a divorce between the note and the submission," the bench remarked. 

Raju informed the bench that ED had been instructed to withdraw the notice and had also directed the return of all the seized materials. The bench noted the submission and reserved orders on the interim application.