• UGI USER
  • Apr 03, 2024
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ED CAN SUMMON ANYONE FOR ‘ANY INFORMATION’: SC

Why in the news ?

Supreme Court upholds Enforcement Directorate’s authority to summon individuals; Tamil Nadu District Collectors criticised for non-compliance.

Source:wordpress

About the Supreme Court Affirms ED’s Powers:

  • Summoning Authority: SC upholds ED’s authority to summon individuals for any information, endorsing its broad investigative powers.
    • Four Tamil Nadu District Collectors rebuked for failing to comply with ED summons, citing election duties and data collection challenges.
  • SC criticises their non-compliance, deeming it disrespectful to the court and the law.
  • Section 50(2) of the Prevention of Money Laundering Act empowers ED to summon any person for evidence or record production.
  • Collectors directed to appear before ED on April 25, emphasising their obligation to comply with summons under PMLA provisions.
What is Money laundering ?

●   Money laundering is disguising the origins of illegally obtained money to appear as if it came from a legitimate source.

●   Criminal activities generate “dirty money” which is then laundered to make it seem legitimate.

●   It involves various techniques to obscure the trail of illicit funds, enabling criminals to enjoy their proceeds.

What is the Prevention of Money Laundering Act (PMLA), 2002?

●   Enacted to combat money laundering.

●   Provides for confiscation of property derived from money laundering.

●   Applicable to financial institutions, banks, insurance companies, and their intermediaries.

What is The Directorate of Enforcement (ED)?

●   The Directorate of Enforcement (ED) investigates money laundering and foreign exchange law violations.

●   It operates under the Department of Revenue within the Ministry of Finance.

●   ED is a top financial investigation agency, ensuring adherence to Indian laws and the Constitution.