Supreme Court Scrutinizes ED's Arrest Powers and 'Endless' Probes in Baghel Case

New Delhi – The Supreme Court of India on Friday, October 31, 2025, placed the investigative powers of the Enforcement Directorate (ED) under sharp judicial scrutiny, raising fundamental questions about the legality of arrests made without prior summons and the agency's practice of conducting perpetual investigations that indefinitely delay trial proceedings.

A bench of Justices Surya Kant and Joymalya Bagchi issued a notice to the ED, seeking its response to a petition filed by Chaitanya Baghel, son of former Chhattisgarh Chief Minister Bhupesh Baghel. The petitioner challenges his July 18 arrest in the alleged ₹2,000 crore Chhattisgarh liquor scam, raising critical issues that could have far-reaching implications for the interpretation of the Prevention of Money Laundering Act (PMLA), 2002, and the new criminal procedure code.

The Court's inquiry delved into two pivotal legal concerns: the validity of an arrest under Section 19 of the PMLA on grounds of "non-cooperation" when the accused was never summoned, and the systemic use of "further investigation" provisions to keep accused individuals incarcerated as undertrials without the prospect of a timely trial.

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The Core Challenge: Arrest Without Summons

Representing Chaitanya Baghel, senior advocates Kapil Sibal and N. Hariharan mounted a robust challenge to the very foundation of the arrest. Their primary argument hinged on the ED's stated ground for arrest: non-cooperation with the investigation.

"They have arrested me on the grounds of non-cooperation. But they never sent me a notice. They never summoned me," argued Mr. Sibal before the bench. "That's the challenge to the arrest. They never called me and arrested me under section 19 of the PMLA, which they can’t do... How could they arrest me? Arrests under Section 19 of the Prevention of Money Laundering Act (PMLA) can only be affected if they are prima facie convinced I have committed the crime… But how can they come to such a conclusion without first calling or summoning me?”

This line of argument directly questions the procedural propriety and fairness of the ED's actions. The petitioner contends that an allegation of non-cooperation is logically untenable if an individual has not been formally called to participate in the investigation via a summons under Section 50 of the PMLA. This section empowers the ED to summon any person, compel their testimony, and demand the production of documents.

While Justice Surya Kant observed from the case file that non-cooperation was not the sole ground for arrest, Mr. Sibal countered that the other grounds were mere allegations and that the fundamental procedural defect of arresting without a summons vitiated the entire action.

The case brings to the forefront the interpretation of Section 19 of the PMLA, which grants the ED the power to arrest. This power is contingent on the investigating officer having "reason to believe" that a person is guilty of a money laundering offence. Baghel's plea suggests that this "reason to believe" cannot be legitimately formed, at least on grounds of non-cooperation, without first engaging with the accused through established statutory channels.

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Judicial Disquiet Over 'Further Investigation' and Trial Delays

Beyond the specifics of the arrest, the bench expressed significant concern over a broader systemic issue: the indefinite protraction of investigations, which effectively stalls trials. Justice Joymalya Bagchi directly confronted Additional Solicitor General S.V. Raju, appearing for the ED, on this point.

"Besides the grounds of arrest, the issue here is the interpretation of Section 193 of the Bharatiya Nagarik Suraksha Sanhita, 2023… How long can you continue with your ‘further investigation’?" Justice Bagchi asked.

This judicial observation highlights the growing unease with how investigative agencies utilize provisions for "further investigation" – formerly under Section 173(8) of the Code of Criminal Procedure, 1973, and now under Section 193(9) of the BNSS, 2023. Baghel's counsel argued that this has become a modus operandi for the ED: file an initial complaint, secure the arrest of the accused, and then repeatedly file supplementary charge sheets under the guise of ongoing investigation, thereby preventing the trial from ever commencing.

"The investigation does not seem to end," submitted senior advocate N. Hariharan, encapsulating the predicament of accused individuals who languish in prison as the probe continues without a definitive timeline.

In response, ASG Raju stated that the Supreme Court itself had granted the agency a three-month period to complete the investigation, which it was adhering to. However, the bench's pointed questions suggest a desire to establish clearer jurisprudential boundaries on how long such investigations can continue before they impinge upon an accused's fundamental right to a speedy trial under Article 21 of the Constitution.

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Constitutional Cloud Over PMLA Provisions

The matter before the Court is multi-faceted. In a separate writ petition, Chaitanya Baghel has also challenged the constitutional validity of Sections 50 and 63 of the PMLA. This petition, which the Court has agreed to hear next week along with a batch of similar challenges, strikes at the heart of the PMLA's investigative framework.

The petition argues that Sections 50(2) and 50(3) of the PMLA, which compel a person to state the truth and produce documents, are a direct infringement of the fundamental right against self-incrimination guaranteed under Article 20(3) of the Constitution. It is contended that statements recorded under Section 50 are admissible in evidence, yet they are obtained under the threat of penalty for non-compliance (under Section 63), effectively forcing an individual to incriminate themselves without the procedural safeguards available under the CrPC.

This challenge revives a critical debate on the balance between the state's power to investigate complex financial crimes and the individual's sacrosanct constitutional rights.

Background and Path to the Apex Court

The case stems from the alleged ₹2,000 crore liquor scam, where politicians, officials, and private individuals are accused of manipulating the state's liquor trade between 2019 and 2022. Chaitanya Baghel is accused of laundering a portion of the criminal proceeds.

His journey to the Supreme Court followed an unsuccessful plea before the Chhattisgarh High Court. On October 17, the High Court had dismissed his challenge to the arrest, holding that the non-issuance of a summons under Section 50 was merely a "procedural lapse" and did not render the investigation or subsequent arrest illegal. Baghel’s appeal to the Supreme Court argues that this finding is erroneous and that such a fundamental procedural irregularity vitiates the entire process.

The Supreme Court has now sought a formal response from the Centre and the ED within ten days. The outcome of this case is poised to deliver a significant ruling on the procedural mandates for arrest under the PMLA and could potentially curb the practice of open-ended investigations that undermine the right to a fair and speedy trial. Legal practitioners will be watching closely as the Court's interpretation could recalibrate the balance of power between investigative agencies and the rights of the accused.