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TMI Blog2024 (2) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... who could be the Director, Deputy Director, Assistant Director or any other officer authorized in this behalf by the Central Government, may arrest a person after, on the basis of the material in his possession, he has reason to believe, which belief has to be recorded in writing, that any person is guilty of an offence punishable under the Act. Sub-Section 1 further provides that after the arrest, the person so arrested, is required to be informed about the grounds of such arrest as soon as may be - Sub-Section 3 further provides that the person arrested shall within 24 hours be taken to the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be having jurisdiction. The Hon'ble Supreme Court in the case of V.Senthil Balaji [ 2023 (8) TMI 410 - SUPREME COURT ] had observed that the provisions of Section 19 are mandatory and the compliance of the said provisions is a solemn function of the arresting authority which brooks no exception and that the officer concerned is to strictly comply with the mandate of Section 19 in its letter and spirit, failing which he would be visited with the consequences as have been mentioned under the 2002 Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion from 04.01.2024 to 08.01.2024 and thus, in effect had arrested the petitioners on 04.01.2024 itself but had not produced the petitioners before the concerned Court within 24 hours from the date of their actual arrest i.e. 04.01.2024 nor had complied with the other conditions mentioned in Section 19(1), 19(2), 19(3) and thus, arrest and all subsequent orders including remand orders are illegal and against law and deserve to be set aside. The judgment of the Single Bench of the Delhi High Court in case of Gautam Thapar (supra) relied upon by the counsel for the respondents would not further the case of the respondents. The facts in the said case were completely different from the facts in the present case inasmuch as the said case was not a case where there was unlawful restraint/illegal detention for a period of more than four days nor there was any averment of the respondent authorities in the said case in the reply as is there in the present case which clearly shows that the petitioners, in the present case, were confined to the four walls of the premises in question from 04.01.2024 to 08.01.2024. The judgments relied upon on behalf of the petitioners, relevant portion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises where the search was being conducted from 04.01.2024 to 08.01.2024. A perusal of the grounds of arrest of both the petitioners would show that although it has been stated by the competent officer that the petitioners have adopted an attitude of non-cooperation by evading the queries and by giving misleading answers but no specific instance regarding the same has been mentioned. By filing the said additional reply dated 29.01.2024, respondent no.2 has tried to show the sequence of events in order to explain the delay in compliance of Section 19(2) but a closer perusal of the said paragraph would show that in case the preliminary scrutiny of documents had been done on 10.01.2024, subsequent to 08.01.2024 when the petitioners were arrested, then the question of the arresting officer having formed the reason to believe in writing that the petitioners were guilty of an offence under the 2002 Act on the basis of the material in his possession, becomes highly doubtful. Moreover, no reference has been made in the sequence of events as to when the reasons to believe as required under Section 19(1) of the 2002 Act were reduced into writing. The argument raised on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioners in rebuttal Paras 20 to 29 Pg 30 to 42 6. Findings of this Court Paras 30 to 75 Pg 42 to 110 a) Non-application of mind and nonrecording of compliance of the conditions/stipulations contained in Section 19 by the Special Court while passing the impugned orders Paras 30 to 41 Pg 42 to 61 b) Illegal detention/wrongful restraint of the petitioners from 04.01.2024 to 08.01.2024 amounting to arrest on 04.01.2024 itself and consequential violations of Section 19 of PMLA read with Section 167 CrPC on account of non-production of petitioners within 24 hours Paras 42 to 54 Pg 61 to 79 c) Violation of the provisions of Section 19(2) of the 2002 Act Paras 55 to 60 Pg 79 to 91 d) Non-compliance of Section 19(1) of the 2002 Act Paras 61 to 66 Pg 91 to 102 7. Additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 002 may kindly be set-aside since the petitioner was illegally arrested and remanded to ED Custody in gross abuse and violation of the provisions of Prevention of Money-Laundering Act, 2002 {PMLA, 2002} in view of the law laid down by the Hon ble Supreme Court in Vijay Madanlal Choudhary Ors. v. Union of India Ors. 2022 LiveLaw (SC) 633; V. Senthil Balaji vs. The State represented by Deputy Director and others, 2023 LiveLaw (SC) 611; and Pankaj Bansal v. Union of India Ors. Criminal Appeal Nos.3051-3052 of 2023 D/d 03.10.2023. It is further prayed that appropriate interim orders/directions may kindly be issued to the respondents to release the petitioner forthwith from the custody during the pendency of the present petition. It is further prayed that this Hon ble Court may pass any other order or direction which it may deem fit and appropriate in the facts and circumstances of the present case. BRIEF FACTS OF THE CASE: - 5. 8 FIRs were registered at Police Station Yamuna Nagar, District Haryana. The details of the said FIRs as given in para 1 of the reply dated 22.01.2024 filed in the case of petitioner Dilbag Singh @ Dilbag Sandhu are given herein u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 3 and punishable under Section 4 of the 2002 Act. A search was carried out from 04.01.2024 (0825 hours) to 08.01.2024 (1300 hours), at the residential premises of the petitioner Dilbag Singh @ Dilbag Sandhu and Rajinder Singh, located at 410, Friends Colony, Yamuna Nagar and another search was also carried out from 04.01.2024 to 08.01.2024 at the premises of petitioner Kulwinder Singh, House No.62, Sector 14, HUDA, Yamuna Nagar. It is the case of the petitioners that they were illegally detained/arrested on 04.01.2024. It is the case of the prosecution that petitioner Dilbag Singh @ Dilbag Sandhu was arrested on 08.01.2024 at 12.15 PM from the above-said house and the petitioner Kulwinder Singh was arrested on 08.01.2024 at 02.20 PM from House No.62, Sector 14, HUDA, Yamuna Nagar. It is the case of the prosecution that searches were carried out at other places also. As per the case of the prosecution, the written grounds of arrest were given to both the petitioners on 08.01.2024. In the grounds of arrest with respect to petitioner Dilbag Singh @ Dilbag Sandhu, reference was made to the above-said 8 FIRs, more so, FIR No.226 dated 14.10.2022, in which, it was alleged that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 167 of the CrPC for the said purpose. The Special Judge (PMLA), Gurugram, vide a common order dated 16.01.2024 was pleased to extend the remand custody of both the petitioners for a further period of 7 days. On 23.01.2024, both the petitioners were produced before the Additional Sessions Judge, Gurugram and vide a common order dated 23.01.2024, both the petitioners were remanded to judicial custody till 06.02.2024 and since then, both the petitioners are in judicial custody, being lodged in Bhondsi Jail. It is in the said background that the present two petitions have been filed. ARGUMENTS ON BEHALF OF THE PETITIONERS 8. Learned Senior Counsel for the petitioners has first submitted that as per the provisions of Section 19(2) of the 2002 Act, the concerned officer immediately after arresting the accused persons under Sub-Section (1) of the said Section is required to forward a copy of the order along with material in his possession to the Adjudicating Authority in a sealed envelope in the manner which may be prescribed and the said Adjudicating Authority is required to keep the said order and the material for such period as may be prescribed. It is further submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Special Court (PMLA) Gurugram had allowed the application of the Directorate of Enforcement under Section 65 of the 2002 Act read with Section 167 CrPC and had remanded the petitioners to the custody of the Enforcement Directorate for a period of seven days, would also show that in the said order, there is complete non-application of mind with respect to compliance of the provisions of Section 19(2) of 2002 Act and that no reference has been made in the said order as to when the copy of the order along with the material in the possession of the Arresting Officer was forwarded to the Adjudicating Authority in a sealed envelope. No record has been referred to show that the material has been forwarded in the manner as it is required to be done under the 2005 Rules (I). It is submitted that although, a specific plea has been raised by the petitioners in the grounds of the petitions, yet in the reply dated 22.01.2024 filed by the respondents, no specific reference has been made to even remotely show the compliance of the provisions of Section 19(2) of 2002 Act. 9. Learned Senior Counsel for the petitioners has relied upon the judgment of the Hon ble Supreme Court in V. Senthil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent petitions deserve to be allowed and the arrest order dated 08.01.2024 as well as the remand order dated 09.01.2024 and 16.01.2024 deserve to be set aside and the petitioners deserve to be released. 11. Learned Senior Counsel for the petitioners has next submitted that as per the provisions of Section 19(1) of 2002 Act, when the officer concerned, on the basis of the material in his possession and after having reason to believe (which reason is required to be recorded in writing) is of the opinion that the persons concerned are guilty of the offence punishable under this Act, then the officer concerned has the power to arrest the said persons and is required to inform the said persons of the grounds of arrest and is further required to produce the said persons within 24 hours before the Special Court or Judicial Magistrate or Metropolitan Magistrate having jurisdiction as per Section 19(3) of the 2002 Act. It is submitted that a reading of the said provisions would show that from the date of their arrest, the persons concerned are required to be produced before the Court within a period of 24 hours as has been detailed in Section 19(3) of the abovesaid Act. It is argued tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been defined in the Code of Criminal Procedure or any other law and the true meaning of the said word arrest is when the arrester takes a person into his custody or by action or words restrains him from moving anywhere beyond his control and in case there is any restraint on the personal liberty of the person, then the same would come within the meaning of detention/arrest. Reliance has also been placed upon a judgment of the Andhra Pradesh High Court in Mrs. Iqbal Kaur Kwatra Vs. DGP, reported as 1996(1) APLJ 370 (HC) Andhra Pradesh. It is argued that the restraint from 04.01.2024 to 08.01.2024 would in effect be house arrest/illegal detention and thus, period of 24 hours within which the petitioners were required to be produced before the concerned Court having jurisdiction would commence from 04.01.2024 itself and not from 08.01.2024. On the aspect of house arrest, reliance has been placed upon the judgment passed by the Hon ble Supreme Court in Gautam Navlakha Vs. National Investigation Agency, reported as (2022) 13 SCC 542 to contend that it has been observed by the Hon ble Supreme Court in para 60 of the said judgment that house arrest is also custody and forced detentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the petitioners are being prosecuted is the offence of money laundering and thus, for the Court to have jurisdiction for the purposes of Section 19(3) and also for the purpose of trying the same, the offence of money laundering should have been committed within the jurisdiction of the said Court. It is further submitted that a perusal of the order dated 09.01.2024 (Annexure P7) would show that even a passing reference with respect to the compliance of provisions of Section 19(3) of the 2002 Act has not been remotely made by the Special Court, PMLA, Gurugram while allowing the application of the Enforcement Directorate under Section 65 of the 2002 Act read with Section 167 CrPC. It is argued that even while passing the order dated 16.01.2024, the Special Judge has erroneously observed that the said aspect can only be determined at the time of taking cognizance on the complaint, if any, filed by the Directorate Enforcement without considering that as per settled law, it is the duty of the Magistrate to peruse the record and satisfy itself that the mandatory requirements of Section 19 including Section 19(3) of the 2002 Act have been met. It is submitted that a perusal of paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst them so as to enable the petitioners to prepare their defence and set up a case to agitate before the Courts that the petitioners' case satisfies the conditions of Section 45 of the 2002 Act. It is further argued that even if the grounds of arrest of both the petitioners are taken on their face value, still, no person including the Arresting Officer could come to a conclusion that there is reason to believe that the petitioners are guilty of the offences committed under the 2002 Act. Learned senior counsel for the petitioners has made a specific reference to the applications filed in both the cases and has submitted that the grounds of arresting the petitioners were stated to be their non-cooperation and the petitioners having given vague and evasive replies. It is stated that in the present case, no notice under Section 50 had been issued to either of the two petitioners before the search had been conducted and it is impossible to know as to on what basis the said plea had been taken in the grounds of arrest. It is further submitted that it has been repeatedly held that merely by stating that the petitioners were evasive cannot be made the basis of arresting the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the material was never produced before the Special Court before the remand was ordered on 09.01.2024 as it is their own case that they have scrutinized the material on 10.01.2024. It is also pointed out that neither in the pleadings nor in the grounds of arrest nor in the applications of remand, it has been averred by the respondents that the Arresting Officer had recorded the reasons in writing of his belief based on the material in his possession that the petitioners were guilty of the offence punishable under the 2002 Act. ARGUMENTS ON BEHALF OF THE RESPONDENTS 14. Learned counsel for the respondents has first referred to Section 19(3) of the 2002 Act and has submitted that both the petitioners in both the petitions had been produced before the competent Special Court having jurisdiction, both with respect to subject matter as well as territorial within 24 hours as provided by Section 19(3) of the 2002 Act. Reference has been made to Annexure R-2 annexed along with the additional reply dated 29.01.2024 filed on behalf of the respondents, which is the Panchnama dated 05.01.2024. It is submitted that a perusal of the said Panchnama shows that the officers of the Enf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction within the meaning of Section 19(3) of the 2002 Act. In support of his arguments, learned counsel for the respondents has relied upon the judgments of the Hon ble Supreme Court in Rana Ayyub vs. Directorate of Enforcement through its Assistant Director reported as 2023 SCC Online SC 109 and has highlighted paragraphs 3 to 6, 18, 38 to 40 and 45 of the said judgment. Further reference has been made to Section 462 of the Cr.P.C. 1973 to argue that no finding, sentence or order of any Criminal Court is to be set aside merely on the ground that the inquiry, trial or other proceedings took place in a wrong sessions division, district or sub division unless it appears that such error has in fact occasioned a failure of justice. 15. Learned counsel has submitted that although the Gurugram Court has jurisdiction as a part of the crime was committed within its jurisdiction but even assuming that a part of the crime was not committed within the jurisdiction of the Gurugram Court, then also the same would not call for setting aside the orders of remand as the same would be saved in view of the provisions of Section 462 Cr.P.C., moreso when the petitioners have not been able to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner Dilbag Singh. With respect to the said, reliance has been placed upon the judgment of the Hon'ble Supreme Court in case titled as Mumbai International Private Limited Vs. Golden Chariot Airport and another , reported as (2010) 10 SCC 422, more so paras No.45, to contend that once the petitioner had elected to raise the plea before the Special Court and after having suffered an order, the non-challenge of the same would bar the petitioner from raising the said plea in view of the doctrine of election. Further reliance has been placed upon the judgment of the Hon'ble Supreme Court of India in case titled as State of Punjab and others Vs. Gurdev Singh , reported as 1991(4) SCC 1 to contend that even an order which is a nullity has to be challenged. It has been further pointed out that the reliance sought to be placed upon paragraph 3(d) of the additional affidavit on behalf of the petitioner to contend that for the first time, the respondent authorities had scrutinized the material on 10.01.2024, is incorrect, inasmuch as, there is no admission in the said paragraph stating that the authorities for the first time scrutinized the material and whereas, a perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in possession/control of the locker, safe, almirah, documents etc. and thus, it was important to secure their presence within the premises in order to have access to, inspect/examine their contents and to avoid any sort of tampering with the potential proceeds of crime and also that they were allowed to follow their daily routine and were not detained or compulsorily retained in the premises. It has further been averred that the petitioners were there within the premises on their own will and themselves offered to be in the premises during the course of the search. 17. Learned counsel has referred to the 2005 Rules (II) more so, Rule 3 Sub Rule 7 and Sub Rule 8 as well as Rule 4 Sub Rule 2 in support of his arguments to the effect that since, the occupant of the building has been permitted to attend the search and also the respondent authorities have the power to require any person who is the owner or is in immediate possession to open the locker or safe and also to allow access to inspect the same, thus, keeping the petitioners in the premises was necessary for carrying out the search. It is further submitted that even as per Rule 4 Sub Rule 2, the seizure memo was to be deliv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PMLA. It is argued that the petitioners have not laid any specific challenge to the said grounds of arrest and have not even averred that the said grounds of arrest are insufficient or that by reading the grounds of arrest, the offence is not made out. It is argued that since the petitioners had filed the petitions, the onus to show that the contents of the grounds of arrest were incorrect and that the petitioners were not linked to the facts and circumstances which had been mentioned in the grounds of arrest, was on the petitioners, which they have failed to discharge. It is thus submitted that the said ground of challenge is also absolutely misplaced and deserves to be rejected. 19. On the aspect of non-compliance of the conditions contained in Section 19(2) of the 2002 Act, learned counsel for the respondents has referred to para No.325 of the judgment in Vijay Madanlal Chaudhary's case (supra) to contend that reference was only made to pre-conditions to be fulfilled by the authorized officer before effecting arrest. It is argued that provisions of Section 19(2) of the 2002 Act deal with a situation which is subsequent to the arrest and thus, intent of the Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh Vs. State of Uttar Pradesh, reported as ( 2013 ) 12 SCC 539 , in paras No.30 and 31, had observed that mere delay in sending the FIR to the magistrate by itself would not have any effect on the case of the prosecution unless serious prejudice was demonstrated to have been suffered by the accused therein. On the said aspect, reliance has also been placed upon a judgment of the Hon'ble Supreme Court in case titled as State of Rajasthan Vs . Daud Khan , reported as 2016(2) SCC 607. It is argued that in the present case, no such prejudice has been demonstrated. Learned counsel for the respondents has further referred to para No.3 of the additional reply dated 29.01.2024 (at internal page 16) to contend that the reasons for delay in compliance of the provisions of Section 19(2) of the 2002 Act have been detailed in the said para and the said reasons are sufficient to show the compliance of Section 19(2) of the 2002 Act. Reference was also made to the remand order passed by the Special Court dated 09.01.2024 to contend that the Court had considered the remand papers and other relevant material and the allegations made by the prosecution including the fact that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by the respondent. It is argued that as per sub rule 8 of Rule 3 of the 2005 Rules (II), an occupant or some person on his behalf has been given the right to attend the search and the said provision alone would show that the petitioners or any person who is an occupant could not have been detained in the premises for carrying out the search as staying in the premises is an option with the occupant or a person on his behalf. It is argued that the said provision completely demolishes the stand of the respondent authorities to the effect that for the purpose of search, they have the right to keep the petitioners and others persons in the premises so as to further their search. It is argued that even in sub Rule 7, which has been relied upon by the respondent authorities, the expression may and not shall has been used and thus, a person, who is the owner and is in possession, may be required to open the same and allow access and where such person fails to comply with any such requirement, then the authorities are entitled to break open the lock of such box, locker, safe etc. and thus, even reading of the said provisions shows that even in case of non-presence or non-co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Panchnama in the case of petitioner Kulwinder Singh, it has been specifically mentioned that everyone present at the premises was allowed proper rest, food break and washroom break and from the same, it is apparent that there was complete control of the respondent on the movements of the petitioners and their family members and it is the respondent authorities who were allowing the petitioners and family members to take rest, food and washroom breaks. Learned senior counsel for the petitioners has submitted that in case the plea of the respondent authorities to the effect that the respondent authorities are entitled to secure the presence of the petitioners and to keep them in the premises for the purpose of search, is taken to be true, then in such a situation the said act would also violate Section 18 of the 2002 Act which as per the case of the respondent authorities has not been invoked in the case of the petitioners. It is argued that a perusal of Section 18 of the 2002 Act would show that in case an authority has reason to believe which has to be recorded in writing that any person has secreted about his person or in anything under his possession, ownership or contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the person sought to be arrested is guilty of the offence punishable under the Act and the said reason to believe has to be on the basis of material in his possession. It is argued that the above-said provision necessarily envisages that the material which the officer has collected and on the basis of which he has formed the said reason to believe has to be with the officer on the date of making the arrest and as soon as may be, he is required to inform the accused about the grounds of such arrest. It is further argued that under sub-section (2) of the 2002 Act, the said officer is duty bound to send the said material which is already collected to the Adjudicating Authority in a sealed envelope so that the said material cannot be tampered with and the officer in case is called upon to demonstrate that on the date when the arrest was made he had the material for his reason to believe that the person arrested was guilty and if there is any delay in sending the said material the same could result in such a situation where the material which is subsequent to arrest could also be sought to be forwarded so as to justify the arrest which had taken place prior. It is stated that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of para 3 of the additional reply dated 29.01.2024 would clearly show that there is complete non-compliance of Section 19(1) of the 2002 Act as well as 19(2) of the 2002 Act. It is further submitted that the entire sequence of events, as per the stand of the respondents, has been stated in para Nos.3(a) to 3(e) and the said sequence of events shows that certain cash, documents and vehicles were seized, regarding which preliminary scrutiny was required to be done as per the stand of the respondents and it has further been stated that the final search was conducted till 03:00 PM, which was after the arrest of the petitioners as the petitioners were arrested at 12:15 PM and 2:20 PM on 08.01.2024. It is argued that it is no where stated that before the arrest, the material had already been scrutinized by them and on the basis of the material, the arresting officer had formed the reason to believe and no where stated that the said reason to believe was recorded in writing, thus, violating Section 19(1) of the 2002 Act also. It is argued that even as per the averments in sub-clause (c), the only issue, as per the case of the respondents which the Special Court was considering was the poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven in the eight FIRs as mentioned in the grounds of arrest. 25. Learned Senior Counsel for the petitioners has further submitted that a perusal of para 311 of the judgment passed in Vijay Madanlal Choudhary s case (supra) clearly states that reasons to believe are required to be recorded in writing and contemporaneously forwarded to the Adjudicating Authority along with material in his possession in a sealed envelope to be preserved by the Adjudicating Authority. Reference has been made to the New International Webster s Comprehensive Dictionary of the English Language to highlight that the word contemporaneous means at the same time . It is submitted that thus, the intent of the legislature was that the material should be sent contemporaneously/immediately to the Adjudicating Authority so as to avoid any manipulation or subsequent addition of documents to justify prior arrest. It is further submitted that in the said judgment of Vijay Madanlal Choudhary s case (supra) in paragraph 322, it has been observed that the safeguards which have been provided are to ensure fairness, objectivity and accountability of the authorised officer and the said term objectivity has also bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opolitan Magistrates as the case may be and not just Judicial Magistrates and Metropolitan Magistrates. It is further submitted that the expression jurisdiction has been used in the said provision and not territorial jurisdiction. 28. Learned Senior Counsel for the petitioners has referred to Section 4(4) of Code of Criminal Procedure to contend that with respect to offences under the Acts other than IPC, the investigation, inquiry and trial is to be conducted subject to the enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences and thus it is the provisions of PMLA which would prevail in the instant case. 29. Learned Senior Counsel for the petitioners has submitted that panchnama dated 05.01.2024 (Annexure R-2) and the alleged recovery of Rs. 7.50 lacs from Faridabad has no connection with the petitioners as the said premises is neither owned nor possessed by either of the two petitioners and even as per the case of the respondent authorities, the same is owned and possessed by one Raman Ojha with which the petitioners have no connection. It is argued that the alleged recovery fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Court or] Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the [Special Court or] Magistrate's Court. A perusal of the above Section would show that the same contains three Sub-Sections. Under Sub-Section 1, the concerned officer who could be the Director, Deputy Director, Assistant Director or any other officer authorized in this behalf by the Central Government, may arrest a person after, on the basis of the material in his possession, he has reason to believe, which belief has to be recorded in writing, that any person is guilty of an offence punishable under the Act. Sub-Section 1 further provides that after the arrest, the person so arrested, is required to be informed about the grounds of such arrest as soon as may be . Sub-Section 2 of Section 19 provides that the officer, who has arrested the person concerned, is immediately required to forward a copy of the order along with the material in his possession, on the basis of which he had reason to believe that the said person was guilty of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r shall immediately, after the arrest, forward a copy of the order as mandated under subsection (1) together with the materials in his custody, forming the basis of his belief, to the Adjudicating Authority, in a sealed envelope. Needless to state, compliance of sub-section (2) is also a solemn function of the arresting authority which brooks no exception. 42. This provision is a reiteration of the mandatory compliance of Section 19 of the PMLA, 2002. It is in the nature of a warning to an officer concerned to strictly comply with the mandate of Section 19 of the PMLA, 2002 in letter and spirit failing which he would be visited with the consequences. It is his bounden duty to record the reasons for his belief in coming to conclusion that a person has been guilty and therefore, to be arrested. Such a safeguard is meant to facilitate an element of fairness and accountability. 73. We have already touched upon the mandatory function that a Magistrate is to undertake while dealing with a case of remand. He is expected to do a balancing act. As a matter of rule, the investigation is to be completed within 24 hours and therefore it is for the investigating agency concerned to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be justified as the authorities specially at the magisterial level would do well to remind themselves that detention in police custody is generally disfavoured by law. The provisions of law lay down that such detention/police remand can be allowed only in special circumstances granted by a Magistrate for reasons judicially scrutinised and for such limited purposes only as the necessities of the case may require. The scheme of Section 167 of the Criminal Procedure Code, 1973 is unambiguous in this regard and is intended to protect the accused from the methods which may be adopted by some overzealous and unscrupulous police officers which at times may be at the Instance of an interested party also. But it is also equally true that the police custody although is not the be-all and end-all of the whole investigation, yet it is one of its primary requisites particularly in the investigation of serious and heinous crimes. The legislature also noticed this and has therefore, permitted limited police custody 95. SUMMATION OF LAW: xxx xxx ii. Any non-compliance of the mandate of Section 19 of the PMLA, 2002 would enure to the benefit of the person arrested. For such non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation is to be completed within 24 hours as a matter of rule and, therefore, it is for the investigating agency to satisfy the Magistrate with adequate material on the need for custody of the accused. It was pointed out that this important factor is to be kept in mind by the Magistrate while passing the judicial order. This Court reiterated that Section 19 of the Act of 2002, supplemented by Section 167 Cr.P.C., provided adequate safeguards to an arrested person as the Magistrate has a distinct role to play when a remand is made of an accused person to an authority under the Act of 2002. It was held that the Magistrate is under a bounden duty to see to it that Section 19 of the Act of 2002 is duly complied with and any failure would entitle the arrestee to get released. It was pointed out that Section 167 Cr.P.C is meant to give effect to Section 19 of the Act of 2002 and, therefore, it is for the Magistrate to satisfy himself of its due compliance by perusing the order passed by the authority under Section 19(1) of the Act of 2002 and only upon such satisfaction, the Magistrate can consider the request for custody in favour of an authority. To put it otherwise, per this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view the seriousness of the offences and the stage of the investigation, he was convinced that custodial interrogation of the accused persons was required in the present case and remanded them to the custody of the ED! The sentence It is further (sic) that all the necessary mandates of law have been complied with follows It is the case of the prosecution . and appears to be a continuation thereof, as indicated by the word further , and is not a recording by the learned Judge of his own satisfaction to that effect. 34. It would be relevant to note that the Hon'ble Supreme Court in the case of Ram Kishor Arora (supra) had observed that since, in the judgment of Pankaj Bansal (supra), it had directed to furnish the grounds of arrest in writing as a matter of course, henceforth thus, it was observed that the said requirement of furnishing the grounds of arrest in writing to the arrested person would be mandatory/obligatory after the date of the said judgment and that non-furnishing of the grounds of arrest in writing till the date of pronouncement of the judgment in the case of Pankaj Bansal (supra) could not be faulted upon. It would be relevant to note that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said judgment is reproduced hereinbelow:- ARREST 322. Section 19 of the 2002 Act postulates the manner in which arrest of person involved in money-laundering can be effected. Subsection (1) of Section 19 envisages that the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Government, if has material in his possession giving rise to reason to believe that any person has been guilty of an offence punishable under the 2002 Act, he may arrest such person. Besides the power being invested in high ranking officials, Section 19 provides for inbuilt safeguards to be adhered to by the authorised officers, such as of recording reasons for the belief regarding the involvement of person in the offence of money-laundering. That has to be recorded in writing and while effecting arrest of the person, the grounds for such arrest are informed to that person. Further, the authorised officer has to forward a copy of the order, along with the material in his possession, in a sealed cover to the Adjudicating Authority, who in turn is obliged to preserve the same for the prescribed period as per the Rules. This safeguard is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectorate of Enforcement that during the course of investigation of the above mentioned FIRs, it was found that ultimate beneficiary of cheating/fraud was the accused who had dealt with proceeds of crime. In such circumstances, in my considered opinion, at this prima facie stage when investigation is still at infant stage this arguments of learned counsel for the accused is not tenable that a false story has been cooked-up by the Directorate of Enforcement with regard to commission of offence under the Prevention of Money Laundering Act, 2002, and the accused has no nexus whatsoever with the same. Such a conclusion can be drawn at the time of conclusion of trial only. 20. It has been alleged by the Directorate of Enforcement that during search of the premises of the accused various ERawana bills and cheque books of many firms, which were part of syndicate were traced and that the above mentioned recoveries further augment the claim of the applicant/Directorate of Enforcement with regard to involvement of accused in the commission of offence. 21. Here this fact cannot be ignored that there are very specific and categorical allegation of the applicant-Directorate of Enforcem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to above the learned counsel for the accused has also requested to provide facility of medicines and other facilities as advised by the Medical Officer. 22. In view of above mentioned application, it is hereby ordered that the Investigating Officer shall allow the accused to meet his counsel on each and every date, during custody period, for one hour daily, i.e. from 09:00 a.m. to 10:00 a.m. It is further directed that all the facilities as prescribed/advised by the Medical Officer, including medicines equipments shall be provided by the Directorate of Enforcement. 23. The papers be put up on 16.1.2024. To the similar effect is the order dated 09.01.2024 passed in the case of petitioner-Kulwinder Singh. A perusal of the above and the whole order would show that not even a passing reference much less finding has been made on the aspect that the Court had satisfied itself that the officer concerned immediately after the arrest of the accused persons had forwarded the copy of the order along with the material in his possession to the Adjudicating Authority in a sealed envelope in the manner as has been prescribed. Thus, compliance of Section 19(2) has not been notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence but is as to the aspect of the application of mind of the Special Court with respect to compliance of provisions of Section 19 including that of Section 19(3). Since, the petitioners were produced before the Special Court at Gurugram on 09.01.2024 thus, it was incumbent upon the said Court to consider the material to see as to whether as on 09.01.2024, any cause had arisen so as to produce the petitioners before the said Court and in case any such cause had arisen then to specifically state so in the order of remand. In the instant case, the same has not been done by the Court concerned. 39. Importantly, the Special Court has also not made any observations with respect to the due compliance by the authority of Section 19(1). There is no reference in the order of remand to state that the Court had perused the order, if any, recording the reason to believe that the petitioners are guilty of the offence punishable under the 2002 Act or the grounds of arrest in writing and had satisfied itself that the arresting officer, on the basis of material in his possession, had reason to believe that the petitioners were guilty of the offence punishable under the Act. No such fact has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to in the preceding paragraphs, it is clear that it was the requirement of the Court to have specifically recorded in the order the fact that the provisions of Sections 19(1), 19(2) and 19(3) have been duly complied with and that the Court had perused the written reasons to believe, as mandated under Section 19(1) of the 2002 Act and was satisfied that it had been so recorded therein that the petitioners were guilty of the offence punishable under the Act and that the said order along with the material had been forwarded to the Adjudicating Authority and also that a part of the cause of action had arisen within the territorial jurisdiction of the Special Court at Gurugram and the same having not been done in the present case calls for setting aside the impugned orders/action of the respondent authorities on the said ground alone. (II) ILLEGAL DETENTION/WRONGFUL RESTRAINT OF THE PETITIONERS FROM 04.01.2024 TO 08.01.2024 AMOUNTING TO ARREST ON 04.01.2024 ITSELF AND CONSEQUENTIAL VIOLATIONS OF SECTION 19 OF PMLA READ WITH SECTION 167 CR.P.C. ON ACCOUNT OF NON-PRODUCTION OF PETITIONERS WITHIN 24 HOURS 42. It is the case of both the petitioners that the petitioners along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention Rules 2005 , which were also followed scrupulously by the Respondent No.2. To the similar effect is the reply filed in the case of petitioner Kulwinder Singh. Para 36 of the reply filed in the case of petitioner Kulwinder Singh is reproduced hereinbelow:- 36. The content of Ground C is expressly denied as being wrong, and vexatious in nature. In response, it is submitted that no restrictions were imposed upon the Petitioner until his arrest on 08.01.2024. The Petitioner and other persons were free and at their own sweet will to loiter within their own premises during the duration of the search as general practice and this cannot be termed as detention. In fact, Section 17 PMLA which deals with search and seizure mandates certain requirements which were all duly complied with. In order to ensure the sanctity of the search and seizure and to ensure the safeguards, in exercise of powers under Section 73 PMLA, the central government has framed The Prevention of Money Laundering (Forms, Search and Seizure or Fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id any sort of tampering with the potential proceeds of crime. Also, they were allowed to follow their daily routine. In no circumstances they were detained or asked compulsorily be in the premises. 43. From the above averments, the arguments raised on behalf of the petitioners to the effect that the petitioners were detained in the premises in question against their consent stands fully fortified as it has been stated in the abovesaid reply that the same was done to secure the presence of the petitioners within the premises in order to have access to locker, safe, almirah, documents etc.. Strong reliance has been placed upon by the counsel for respondent No.2, even during the course of arguments, on the provisions of Rule 3 Sub-Rules 7 and 8 of the 2005 Rules (II) to contend that the presence of the petitioners and the other family members was required within the premises so as to enable them to make effective search as several things including locker, safe, almirah had to be opened. Sub-Rules 7 and 8 of Rule 3 are reproduced hereinbelow:- 3. Procedure relating to search. (7) The authority may require any person who, is the owner, or has the immediate possession, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent No.2 inasmuch as the said Sub-Rule, provides that in case the keys are not available or the person to whom the direction or request has been made to open the locker/box fails to comply with the same, then the authority has the power to break open the lock of the said locker, safe, almirah and thus, even in case of non-compliance of the direction of the authorities, no hindrance is caused in the search. Joint reading of the above provisions would clearly show that there is nothing which stops the persons whose premises are being searched from carrying out their daily routine including going to their offices/place of work and the authorities have a right to require the said persons to open any lock, safe, almirah and in case of non-compliance, the authorities have further power to break open the same and thus, it cannot be said that the authorities have a right to restrain the movements of the said persons i.e. the petitioners in the present case within the premises. 46. Importantly, a perusal of the panchnama in the case of both the petitioners would show that it is on 04.01.2024 alone that the search was made of the cupboard, almirah, drawer etc. and no such search had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Gazetted Officer or the Magistrate before whom any such person is brought, if sees no reasonable ground for search, shall forthwith discharge such person. Thus, even in case personal search is to be carried out, specific time has been given within which the person is to be taken to the Gazetted Officer/Magistrate and the period for which the person can be detained by the authority can not exceed 24 hours. In the present case, it is the admitted case of the respondents in the reply that they have not invoked the provisions of Section 18 of the 2002 Act and thus, to detain/restrain the petitioners for a period of more than four days within the premises would amount to illegal detention/unlawful restraint and the petitioners would be deemed to have been arrested on 04.01.2024. 48. Before referring to the law on the said point, it would also be relevant to note that a plea has been raised in the additional reply dated 29.01.2024 to the effect that the petitioners were in the premises out of their own will, which is contradictory to the pleas taken in the earlier reply dated 22.01.2024 in which it was averred that the petitioner and the other persons were free at their own sweet w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of formal and actual arrest and the argument on behalf of the respondents to the effect that the accused therein was only taken in the vehicle in pursuance of the summons having been issued to him was rejected as it was found that the accused therein was taken in the seized car/car belonging to the ED which could not be stated to be voluntary. In the said judgment, on the abovesaid account, arrest of the petitioners was declared to be non-est and void. Relevant portion of the said judgment is reproduced hereinbelow:- 9. On a studied analysis being made of the said arguments, it appears, that the learned ASG concerned, has visibly over focused upon drawing a semantic distinction inter-se arrest and custody, thus through his making reliance upon the judgments (supra). 10. Moreover, he has also emphasized, that the above manner of accompanyings of the accused in the respective vehicles, which were respectively seized, and/or, belonged to the E.D. officials concerned, were only in pursuance to the summons, as became issued upon them. In addition, though he has attempted to thereby make a submission, that the said purported restraint, was not arrest, rather the date of dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the said orders of remand are construable to be condoning the above lapses. 18. However, the above argument, cannot become accepted by this Court, in view of the mandate recorded by the Hon ble Apex Court in case titled as V. Senthil Balaji V. State Represented by Deputy Director and Others reported in 2023 SCC Online SC 934, wherein, it has been expostulated, that when material, does emerge rather suggestive that the parameters laid thereins, relating to application of judicial mind by the learned trial Judge concerned, to the makings of the relevant statutory breaches but become infringed, thus in his making the impugned order of remand, as such, upon, the vice of non-application of mind rather emerging, thus planked, upon breach being caused to the mandate of Section 19 of the Act of 2002, thereby the orders of remand are illegal. 50. In the case of Ashak Hussain Allah Detha @ Siddiqui (supra), it was observed that in substance, arrest was restraint on a man s personal liberty by the power or colour of lawful authority and it also amounts to restraint on or deprivation of one s personal liberty and in case the authority clothed with the power to arrest, actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restraint is irrelevant. For the same reason, the record of the time of arrest is not an index to the actual time of arrest. The arrest commences with the restraint placed on the liberty of the accused and not with the time of arrest recorded by the Arresting Officers. 12. xxx xxx. There is no authority in the Investigating Officers to detain a person for the purpose of interrogation or helping them in the enquiry. 13. On this principle it follows that the detention of the Applicants on the mid-night of 19th July, 1989 was illegal if it was not for having committed an offence under the N.D.P.S. Act. If it was for having committed an offence, the detention was arrest and it commenced at the mid-night of 19th July, 1989. 51. In the case of Mrs. Iqbal Kaur Kwatra (supra), the Division Bench of the Andhra Pradesh High Court at Hyderabad has held as under:- 19. It is well settled that police custody does not necessarily mean custody after formal arrest. It also includes some form of police surveillance and restriction on the movements of the person concerned by the police . The word custody does not necessarily mean detention or confinement. A person is in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case, were confined to the four walls of the premises in question from 04.01.2024 to 08.01.2024. The judgments relied upon on behalf of the petitioners, relevant portion of which is reproduced hereinabove, are on the other hand fully applicable to the facts of the present case. 53. Similarly, the facts in the case of Sundeep Kumar Bafna (supra) are completely different from the facts of the present case. Paragraph 9 of the said judgment gives the meaning of custody as has been stated in various dictionaries. Para 9 and relevant portion of para 10 of the said judgment are reproduced herein as under:- 9. Unfortunately, the terms custody , detention or arrest have not been defined in the CrPC, and we must resort to few dictionaries to appreciate their contours in ordinary and legal parlance. 9.1 The Oxford Dictionary (online) defines custody as imprisonment, detention, confinement, incarceration, internment, captivity; remand, duress, and durance. 9.2 The Cambridge Dictionary (online) explains custody as the state of being kept in prison, especially while waiting to go to court for trial. 9.3 Longman Dictionary (online) defines custody as when someone i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, persons on probation or released on own recognizance have been held to be in custody for purposes of habeas corpus proceedings. 10. A perusal of the dictionaries thus discloses that the concept that is created is the controlling of a persons liberty in the course of a criminal investigation, or curtailing in a substantial or significant manner a persons freedom of action. xxx xxx 54. Moreover, the said case does not in any way further the case of the respondent authorities. Thus, the order of arrest and the impugned orders of remand and all the subsequent proceedings arising thereto deserve to be set aside on this ground also. (III) VIOLATION OF THE PROVISIONS OF SECTION 19(2) OF THE 2002 ACT 55. A perusal of Section 19(1), 19(2) and 19(3) of the 2002 Act, which have been reproduced hereinabove, would show that there are mandatory conditions which are required to be fulfilled, both before and immediately after effecting the arrest which are enumerated hereunder:- i) The Director / Competent officer may arrest a person only after, on the basis of material in his possession, he has reason to believe, which reasons have to be recorded in writing, that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same would make the arrest and subsequent proceedings illegal. It is the admitted stand of respondent no.2 that upto 09.01.2024, when both the petitioners were produced before the Special Court and their remand was sought and granted by the Court, there was no compliance of Section 19(2) and the same was done subsequently only. The question which would arise in the present case, with respect to the present issue, would be the construction to be placed on the word immediately used in Section 19(2) and as to whether the same would show a higher degree of urgency than the term as soon as may be . The Hon ble Supreme Court in the case of Ram Kishor Arora while interpreting the expression as soon as may be contained in Section 19(1) observed that the said period would be 24 hours from the time of arrest and while observing so it was noticed that by way of safeguard, a duty is cast upon the concerned officer to forward the copy of the order along with the material in his possession to the Adjudicating Authority immediately after the arrest of the person. Paragraph 21 of the judgment in the case of Ram Kishor Arora is reproduced hereinbelow:- 21. In view of the above, the expres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by the Director or any other officer not below the rank of Deputy Director authorised by him. They are not only high ranking officials, but have to be fully satisfied that there is reason to believe on the basis of information in their possession about commission of offence of money laundering or possession of proceeds of crime involved in money laundering. Such reason(s) to believe is required to be recorded in writing and contemporaneously forwarded to the Adjudicating Authority along with the material in his possession in a sealed envelope to be preserved by the Adjudicating Authority for period as is prescribed under the Rules framed in that regard. Such are the inbuilt safeguards provided in the 2002 Act. 57. The word contemporaneous has been defined in the New International Webster s Comprehensive Dictionary of the English language Deluxe Encyclopedic Edition in the following manner:- Living or occurring at the same time 58. From the perusal of provisions of Section 19 and the law laid down in the above said judgments, it is apparent that the legislature has purposely chosen to use the expression immediately in Section 19(2) and expression as soon as may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of remand or holding the arrest to be illegal is misconceived and is, thus, rejected. A reading of the law laid down in the judgment of Vijay Madanlal Chaudhary's (supra), V. Senthil Balaji's (supra) and Pankaj Bansal's (supra), and also the other judgments which have been referred to hereinabove, would show that compliance of Section 19 including Section 19(2) is mandatory and for the non-compliance of the same, arrest and the order of remand would be required to be set aside. 59. In the present case, admittedly, the compliance of Section 19(2) was not done till 09.01.2024, and the orders of remand dated 09.01.2024 of both the petitioners do not even remotely show that the Special Court had observed anything regarding its compliance. Even the order dated 16.01.2024 passed by the Special Court extending the remand of both the petitioners does not even remotely mention that there was any compliance of Section 19(2). The same is the position with respect to the order dated 23.01.2024 annexed as Annexure R-11 along with the reply filed by respondent no.2 in CRM-M-3385-2024 vide which the petitioners have been remanded to the judicial custody till 06.02.2024. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused were produced before the Special Court (PMLA), Gurugram seeking for their remand on 09.01.2024. Matter was taken up around 10:30 AM and thereafter, the Ld. Special Court (PMLA) Gurugram after hearing the arguments from both the sides adjourned the matter to 2:00 PM in order to peruse the relevant material available with Directorate to satisfy itself with respect to point of jurisdiction. At 2.00 PM, the Directorate produced the case file along with Reason to Believe (RTB) of the arrestees before the Ld. Judge and the Ld. Judge again deferred the matter for 4.00 PM thereby giving reasonable opportunity to the other side to present its arguments. During arguments, the Directorate, also requested the Hon'ble Judge for transit remand with respect to the remand applications. Later, after perusal of the case file, remand application and hearing arguments of both the sides, the Ld. Special Judge had pronounced the order in the evening at around 5:30 PM, copy of which was received around 7:30 PM on 09.01.2024 d) Thereafter, on 10.01.2024, without any delay, the officials of the Directorate preliminary scrutinized all the seized material which was collected from 23 differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid judgment by the learned counsel for the respondent does not further the case of the respondent. A perusal of paragraph 60 of the said judgment would show that in the said case, the petitioner therein was arrested on 19.06.2023 at 10:25 PM which happened to be a Friday night and thereafter on Saturday i.e., 10.06.2023 and Sunday i.e., 11.06.2023, the office of Adjudicating Authority was closed and immediately thereafter, the copy of the arrest order along with the relevant material was forwarded on 12.06.2023 and the Delhi High Court after taking into consideration the provisions of Section 10 of the General Clauses Act 1897 which provided that where a period prescribed for the purpose of an act in a Court or office expired on a holiday, then the said Act should be considered to have been done within that period, if it is done on the next date on which the Court / Office opens and on the basis of the said peculiar facts of that case it was observed that there was no delay in forwarding the copy of the arrest order along with the material to the Adjudicating Authority. In the above said case, it was impossible for the authorities to have complied with the provision of Section 19( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be of a much higher degree. It would also be relevant to note that the Hon ble Supreme Court in the case of Youth Bar Association vs. Union of India reported as 2016(9) SCC 473 has directed that the copy of the FIR unless the offence is sensitive in nature is required to be uploaded on the website within 24 hours of the registration of the FIR. At any rate, in view of the observations made by the Hon ble Supreme Court in the case of Vijay Madanlal Chaudhary's (supra), V. Senthil Balaji's (supra) and Pankaj Bansal's (supra), the relevant portion of which has been reproduced hereinabove, it is apparent that compliance of Section 19 including Section 19(2) is mandatory and brooks no exception. Accordingly, in view of the above facts and circumstances, it is held that there is violation of the provisions of Section 19(2) of the 2002 Act on account of which also the impugned action is bad in law and is liable to be set aside. (IV) NON-COMPLIANCE OF SECTION 19(1) OF THE 2002 ACT 61. Section 19(1) which has been reproduced in the earlier part of the judgment states that the competent officer may arrest a person after he has reason to believe (on the basis of materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out by this Court in Devinder Singh v. State of Punjab , and a statutory authority is bound by the procedure laid down in the statute and must act within the four corners thereof. 28. We may also note that the failure of the appellants to respond to the questions put to them by the ED would not be sufficient in itself for the Investigating Officer to opine that they were liable to be arrested under Section 19, as that provision specifically requires him to find reason to believe that they were guilty of an offence under the Act of 2002. Mere non-cooperation of a witness in response to the summons issued under Section 50 of the Act of 2002 would not be enough to render him/her liable to be arrested under Section 19. As per its replies, it is the claim of the ED that Pankaj Bansal was evasive in providing relevant information. It was however not brought out as to why Pankaj Bansal s replies were categorized as evasive and that record is not placed before us for verification. In any event, it is not open to the ED to expect an admission of guilt from the person summoned for interrogation and assert that anything short of such admission would be an evasive reply . In Santo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act of 2002 puts it beyond doubt that the authorized officer has to record in writing the reasons for forming the belief that the person proposed to be arrested is guilty of an offence punishable under the Act of 2002. Section 19(2) requires the authorized officer to forward a copy of the arrest order along with the material in his possession, referred to in Section 19(1), to the Adjudicating Authority in a sealed envelope. Though it is not necessary for the arrested person to be supplied with all the material that is forwarded to the Adjudicating Authority under Section 19(2), he/she has a constitutional and statutory right to be informed of the grounds of arrest, which are compulsorily recorded in writing by the authorized officer in keeping with the mandate of Section 19(1) of the Act of 2002. As already noted hereinbefore, It seems that the mode of informing this to the persons arrested is left to the option of the ED s authorized officers in different parts of the country, i.e., to either furnish such grounds of arrest in writing or to allow such grounds to be read by the arrested person or be read over and explained to such person. 62. The Hon ble Supreme Court of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a presumption of regularity, which the appellant has a burden to disprove in order to prove them false and fabricated, which was not done in this case. It highlighted that the exercise of discretionary power involved objective and subjective elements, and the subjective elements if derived from objective elements cannot be questioned on grounds of adequacy of subjective satisfaction by a judicial review. xxx xxx xxx 22. Some of the decisions of this Court may be of relevance in determining in what manner such subjective satisfaction of the Authority must be arrived at, in particular on Section 3(2) of the National Security Act. In Fazal Ghosi v. State of Uttar Pradesh, this Court observed that: (SCC p.505, para 3) 3....The District Magistrate, it is true, has stated that the detention of the detenus was effected because he was satisfied that it was necessary to prevent them from acting prejudicially to the maintenance of public order, but there is no reference to any material in support of that satisfaction. We are aware that the satisfaction of the District Magistrate is subjective in nature, but even subjective satisfaction must be based upon some perti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t officer that the petitioners have adopted an attitude of non-cooperation by evading the queries and by giving misleading answers but no specific instance regarding the same has been mentioned. General observations have been made on the said aspect. Paragraph E[(3)(a) to (3)(d)] of the additional reply dated 29.01.2024 filed in the case of Dilbag Singh has been reproduced in the earlier part of the judgment and a perusal of the same would show that in paragraph 3(a), it had been stated that the preliminary scrutiny of documents was required to be done and it had further been stated that search operation had continued till 03:20 PM on 08.01.2024 and both the petitioners were arrested prior in time to the conclusion of search inasmuch as the petitioner Dilbag Singh was arrested at 12:15 PM and Kulwinder Singh was arrested at 02:15 PM on 08.01.2024. Importantly in clause (d) it was stated that it is on 10.01.2024, that the preliminary scrutiny of all the seized material was done. By filing the said additional reply dated 29.01.2024, respondent no.2 has tried to show the sequence of events in order to explain the delay in compliance of Section 19(2) but a closer perusal of the said pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edure established under section 19 PMLA. xxx xxx xxx 18. That, this Directorate requires custodial interrogation of accused Dilbag Singh in order to discover and identify further proceeds of crime and to enquire upon certain crucial aspects of the investigation related to illegal mining and transfer of funds as he was found to be prima facie guilty for commission of offence of money-laundering, on the basis of investigation carried out and evidences collected so far as well as material in possession of this Directorate. 65. To the similar effect are the averments made in the application for remand dated 09.01.2024 in the case of Kulwinder Singh and in paragraph 14 of the said application, it has been observed that the petitioner Kulwinder Singh was found to be prima facie guilty for commission of the offence of money laundering on the basis of the investigation carried out. Moreover, it is the case of respondent no.2 that search was continuing even after arresting the petitioners and thus, the question of assimilation of material and formulation of reasons to believe as required under Section 19(1) prior to arresting the petitioners moreso after application of mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be said that respondent no.2 has rendered full compliance of the mandatory provisions of Section 19(1) of the Act. ADDITIONAL ISSUES 67. Section 19 sub-section (3) of the 2002 Act provides that every person arrested under sub-section (1) of the said provision shall within 24 hours of the said arrest be produced before the Special Court, Judicial Magistrate or the Metropolitan Magistrate as the case may be, having jurisdiction. On the basis of the arguments raised on behalf of the petitioners and the respondents, there are two aspects which this Court was called upon to consider. The first aspect was the non-application of mind by the Special Court, while passing the orders of remand, regarding satisfying itself with respect to the compliance of the conditions contained in Section 19 including Section 19(3) of the 2002 Act. The said aspect has been discussed in detail under ground No.1 and has been held in favour of the petitioners. The second aspect is as to whether prior to 09.01.2024 when the petitioners were produced before the Special Court at Gurugram, there was some recovery/part of cause of action within the jurisdiction of the Gurugram Court so as to meet th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd upon the evidence that unfolds before the Trial Court. Thus, the said question cannot be decided finally in the present petitions especially when serious factual disputes have been raised by both the sides. Moreover, in the present case, the complaint is yet to be filed by the respondents and it is only at that stage after considering the entire material that the said issue could be finally considered. However, as has been stated herein above, the above said observations would not in any way take away the findings which have been recorded in the earlier part of the present order under ground No.1, as in the said ground the issue for consideration was the application of mind with respect to the compliance of the provisions of Section 19 including Section 19(3) of the 2002 Act by the Special Court on the date the petitioners were remanded and the ED was given their custody. 69. At this stage, it would be relevant to deal with the objection raised on behalf of respondent No.2 with respect to the specific nonchallenge by the petitioner Dilbag Singh @ Dilbag Sandhu to the second order dated 16.01.2024 granting extension of ED custody of both the petitioners to respondent No.2. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this Court may pass any other order or direction which it may deem fit and appropriate in the facts and circumstances of the present case. It would be relevant to note that the order dated 16.01.2024 has been placed on record by respondent No.2 in their reply dated 22.01.2024 (Annexure R-8) and that in the second petition i.e. CRM-M-3385-2024, filed by petitioner Kulwinder Singh which came up for hearing before this Court for the first time on 23.01.2024, on which date notice of motion was issued and the matter was ordered to be heard alongwith CRM-M-2191-2024, the order dated 16.01.2024 has been specifically challenged. The order dated 16.01.2024 is a common order passed in the case of both the petitioners extending the period of remand of both the petitioners. Arguments have been addressed on behalf of the petitioners challenging the said orders and also by the respondents in defending both the orders and after considering the said arguments, this Court has held that both the said orders deserve to be set aside for the reasons which have been given herein above. 72. The Hon ble Supreme Court in the case of Davinder Pal Singh case (supra) had observed that it is a settled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiated and are liable to be declared non est. xxx xxx xxx 116. In view of the above, the appeals succeed and are accordingly allowed. The impugned orders challenged herein are declared to be nullity and as a consequence, the FIR registered by the CBI is also quashed. 73. To the similar effect is the law laid down by the Hon ble Supreme Court in the case titled as Ritesh Tewari and another Vs. State of U.P. and others , reported as (2010) 10 SCC 677. Paras No.32 to 35 of the said judgment are as under: - 32. It is settled legal proposition that if an order is bad in its inception, it does not get sanctified at a later stage. A subsequent action/development cannot validate an action which was not lawful at its inception, for the reason that the illegality strikes at the root of the order. It would be beyond the competence of any authority to validate such an order. It would be ironical to permit a person to rely upon a law, in violation of which he has obtained the benefits. 33. In C. Albert Morris v. K. Chandrasekaran this Court held that a right in law exists only and only when it has a lawful origin. 34. In Mangal Prasad Tamoli v. Narvadeshwar Mishr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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