The Supreme Court on Friday issued a notice to the Directorate of Enforcement (ED) on Tamil Nadu Minister V Senthil Balaji and his wife S Megala’s plea against Madras High Court order upholding the legality of his arrest in a money laundering case.

Senthil Balaji has sought his release in the money laundering case.

Issuing the notice and posting the matter for hearing on July 26, a bench of Justice A S Bopanna and Justice M M Sundresh said that nothing will happen in the meanwhile.

As the bench issued notice on Senthil Balaji and his wife Megala’s petition, Sibal urged the bench that during the pendency of the matter, the Tamil Nadu Minister be protected from custodial interrogation.

In an apparent assurance that no precipitative steps will be taken, Solicitor General Tushar Mehta said that the third judge, Justice Karthikeyan has directed the High Court registry to place the matter before Chief Justice S.V. Gangapurwala to refer it to the same division bench to determine the date on which the ED could take custody of Senthil Balaji, who has undergone coronary bypass surgery, and to shift him from the hospital.

Tamil Nadu Minister without portfolio Senthil Balaji and his wife Megala in two separate petitions have challenged the high court order that upheld his arrest by the ED in a money laundering case.

Appearing for two petitioners Senthil Balaji and Megala, senior advocate Kapil Sibal said that ED officials investigating the case are not police or they constitute a police station and there is no provision for custodial interrogation under PMLA. He said that in the absence of ED officers being police, they cannot take recourse to Section 167 of the Code of Criminal Procedure (Cr.PC) to seek 15 days custodial interrogation of an accused.

As it is, Sibal said that the 15 days period that ED asserts its right to subject Senthil Balaji immediately after his arrest has expired as he has been in judicial custody since his arrest. He referred to two top court judgments on this score to buttress his point.

However, meeting the arguments advanced by Sibal, Solicitor General Tushar Mehta said that ED is seeking custodial interrogation of Senthil Balaji not as a matter of right but its duty as thousands of people have been cheated with an allure of jobs. He is said that if provisions of Prevention of Money Laundering Act are not inconsistent with Section 167 of Cr.PC, it can take recourse to it.

The Solicitor General said that ED, which is an enforcing agency in respect of FERA (Foreign Exchange Regulation Act, now replaced by Foreign Exchange Management Act), acts as police including the Customs Act 1962 and several other laws.

The hearing that lasted for some time witnessed both Sibal and Solicitor General engaged in witty exchanges. As Solicitor General Mehta targeting Senthil Balaji said, “Sometimes stakes are so high, they prefer a bypass surgery to bypass the law.” Getting back and hitting out at ED, Sibal said, “Sometimes stakes are so high, you bypass the law.”

As at the conclusion of the hearing, Solicitor General said, “Enough of luxury by the accused”, Sibal retorted back saying, “Enough of buggery by the ED”.

Besides upholding the arrest of the minister, the high court had also held as valid his subsequent remand in judicial custody by a sessions court in the money laundering case arising out of the alleged cash-for-jobs scam in the state’s Transport Department when he was the transport minister.

The High Court order upholding the arrest of the minister, and also holding valid his subsequent remand in judicial custody came following the decision of a third judge, Justice C.V. Karthikeyan holding that the accused had no right to frustrate the investigation.

The matter travelled to Justice C.K. Karthikeyan – the third judge – following a split verdict on July 4, by a division bench of Madras High Court comprising Justice Nisha Banu and Justice D. Bharatha.

Justice Nisha Banu held that the habeas corpus plea filed (by Balaji’s wife Megala) for Senthil Balaji’s release is maintainable and should be allowed. Justice Banu further said ED is not entitled to get the custody of Senthil Balaji.

However, Justice D. Bharatha Chakravarthy said the habeas corpus plea was not maintainable after the remand order had been passed. He said that no case was made out to show that Balaji’s remand was illegal. Justice Chakaravarthy has also said that that period of Balaji’s stay at the hospital, should be excluded from the ED’s custody period.

Senthil Balaji was arrested by the Directorate of Enforcement on June 14 in an alleged ‘cash for job’ scam that took place when he was the transport minister (2011-2015) in the government of late Chief Minister J. Jayalalithaa.

The ED has arrested Senthil Balaji in connection with a money laundering case rooted in alleged ‘cash for job’ scam that took place when Senthil Balaji was transport minister in AIADMK government who later crossed over to ruling DMK in 2018.

The high court had permitted Senthil Balaji to be shifted to a private hospital for a heart surgery and restricted his interrogation in the hospital. Senthil Balaji was operated for the blockages of three coronary arteries at a local private hospital in Chennai.