TMI Blog2018 (2) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... of arrest were furnished not “as soon as may be” as mandated by Section 19 (1) PMLA but only along with the short reply filed on 13th February 2018 more than two weeks after the arrest. Also, it is doubtful that the said grounds would have been furnished if the present petition had not been filed. That prima facie renders the arrest of the Petitioner illegal. Added to this is the failure to follow the detailed guidelines pertaining to arrest as laid down in D.K. Basu v. State of West Bengal (1996 (12) TMI 350 - SUPREME COURT) which as clarified by the Supreme Court applies with equal force to “other governmental agencies” which expressly included the DOE.. Maintainability of the writ of habeas corpus - Held that:- Finally, on whether a petition seeking a writ of habeas corpus is maintainable, the Court is again unable to subscribe to the view expressed in Moin Akhtar Qureshi (2017 (12) TMI 289 - DELHI HIGH COURT) that only because the trial Court is now seized of the matter and has ordered the remand of the Petitioner, this Court cannot entertain the present petition. Consistent with judicial discipline, since this Bench is of the view that the decisions of the coordinate Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ. For The Petitioner : Mr. Vikram Chaudhary Senior, Advocate with Mr. Sameer Rohatgi, Mr.Harshit Sethi, Mr.Wattan Sharma, Mr.Ashish Batra and Mr.Sankalp Sharma, Advocates For The Respondent : Mr.Amit Mahajan, CGSC, Mr.Anil Soni, CGSC with Mr.Gaurav Rohilla, GP. JUDGMENT Dr. S. Muralidhar, J. : 1. The Petitioner, Rajbhushan Omprakash Dixit, has filed the present writ petition on 1st February 2018 seeking issuance for a writ of habeas corpus for releasing the Petitioner from custody. He has sought a declaration that issuance of a non-bailable warrant (NBW) dated 24th January 2018, his arrest pursuant thereto on 25th January 2018 in ECIR/HQ/17/2017 and the consequent remand orders passed by the learned Additional Sessions Judge, (PMLA) (hereinafter referred to as the trial Court ) is without the authority of law and in violation of Articles 14, 21 and 22 of the Constitution of India. The Petitioner also prayed for mandamus to the Directorate of Enforcement (DOE) (Respondent No. 2) and the Union of India through the Department of Revenue, Ministry of Finance (Respondent No. 1) to provide him a certified copy of ECIR/HQ/17/2017 dated 27th October 2017, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner it is stated that despite issuance of several summons in the months of September and October 2017, the last being 23rd October 2017, he did not join the investigation. 7. During the course of investigation, another FIR No. RCD-I/2017/E/0007 dated 25th October 2017 was registered by the CBI against SBL, its Directors including the Petitioner, one chartered accountant and a former director of Andhra Bank as well as other known and unknown public servants for commission of offences under Sections 13 (2), 13 (1) of the PC Act and Sections 420, 467, 468 and 471 of the IPC read with Section 120-B IPC. The central allegation in the said FIR is that huge credit facilities and loans were obtained by SBL and its sister concerns from Andhra Bank and a consortium of banks led by Andhra Bank on the basis of forged and fabricated documents in criminal conspiracy with the accused persons. A huge sum of ₹ 5383 crores is stated to be outstanding. 8. Within two days thereafter, i.e., on 27th October 2017 the DOE registered another ECIR/HQ/17/2017 to undertake investigation into the related offence of money laundering under Section 3 PMLA punishable under Section 4 thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned trial Court on 24th January 2018. A copy of the warrant served on the Petitioner, the receipt of which was acknowledged by him, has been enclosed as Annexure R-4 to the short reply. There are two endorsements on the said copy of the warrant. One states, received copy , i.e., copy of the warrant and the other endorsement states: grounds of arrest informed to me . Below the said endorsements is the signature of the Petitioner with the date of 25th January 2018. 16. The NBW was executed by the DOE in Vadodara. On 26th January 2018 the Petitioner was produced before the learned Duty Magistrate in the Patiala House Courts, New Delhi. On that date itself, the DOE applied for ED custody remand of the Petitioner by filing an application under Section 65 of the PMLA read with Section 167 (2) Cr PC. A copy of the said application has been enclosed as Annexure R-8 to the short affidavit. The ED custody remand was requested for 14 days. On 26th January 2018 itself a remand for one day was granted to the DOE by the learned Duty Magistrate. The first two sentences of the order read: Legal aid offered to accused, but he refused. Accused submits that he will engage his privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e produced before the learned trial Court on 23rd February 2018. Submissions on behalf of the Petitioner 22. Mr. Vikram Chaudhary, learned Senior counsel appearing for the Petitioner, prayed for interim bail and in that process made the following submissions: (i) The trial Court erroneously issued the NBW at the very first instance without first issuing summons followed by bailable warrant. The order directing issuance of NBW straightaway was in the teeth of the decision of the Supreme Court in Inder Mohan Goswami v. State of Uttaranchal (2007) 12 SCC 1. (ii) The offences under Section 3 PMLA were non-cognizable as was evidenced by the PMLA Amendment Act 20 of 2005 by which Section 45 of the PMLA stood amended with effect from 1st July 2005. The failure to amend the heading of Section 45 of PMLA to bring it in line with the amendment was perhaps inadvertent. Relying on Guntaiah v. Hambamma (2005) 6 SCC 228 he submitted that the marginal notes and headings were not catchwords, and did not control the interpretation of the amendment that was differently worded. Reference was made to the Statement of Objects and Reasons (SOR) for the 2005 Amendment and the Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2 (6) read with Form III of the Prevention of Money Laundering (the Forms and Manner of forwarding a copy of order of arrest of a person along with material to the Adjudicating Authority and its period of detention) Rules 2005 (hereinafter the PML Arrest Rules 2005). The mere conveying or informing the grounds of arrest to the Petitioner would not satisfy the legal requirement. In support of this contention, reliance was placed on the decision, C.B. Gautam v. Union of India (1993) 1 SCC 79. Further the arrest itself was in violation of the mandatory legal requirements as laid down by the Supreme Court in D.K. Basu v. State of West Bengal ( supra ). (vi) Mr. Chaudhary also referred to the decision of the Division Bench of this Court dated 27th April 2016 in Writ Petition (Criminal) No. 307 of 2016 (Gurucharan Singh v. Union of India) which has been affirmed by the Supreme Court by dismissal of the Union of India s SLP (Crl) (CrlMP No. 19020-19022) of 2016 by the order dated 5th January 2017 and the order dated 3rd August 2015 of the High Court of Gujarat at Ahmedabad in Special Criminal Application (Habeas Corpus) No. 4247 of 2015 ( Rakesh Manekchand Kothari v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision dated 1st December 2017 in Writ Petition (Criminal) No. 2465 of 2017 ( Moin Akhtar Qureshi v. Union of India) . Further, a learned Single Judge of this Court in a decision dated 3rd July 2017 in Writ Petition (Criminal) No. 856 of 2017 ( Virbhadra Singh v. Enforcement Directorate) also held likewise. The decision of the Bombay High Court in Chhagan Chandrakant Bhujbal v. Union of India 2016 SCC Online Bom 9938 and the decision dated 22nd December 2015 of the Division Bench of the Punjab Haryana High Court in CWP No. 3317 of 2015 (O M) ( Karam Singh v. Union of India) also held likewise. The decisions of this Court in Gurucharan Singh v. Union of India ( supra ) and of the Gujarat High Court in Rakesh Manekchand Kothari v. Union of India ( supra ) were at the interim stage and were therefore not binding precedents. (iii) The decision of the Supreme Court in Ashok Munilal Jain v. Assistant Director, Directorate of Enforcement ( supra ) was in the context of applicability of Section 167 (2) Cr PC to the proceedings under the PMLA and this position was not contested by the DOE. However, that decision would have no applicability to the arrest an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given that he was absconding for a long time, no case was made out for grant of interim bail. Reference was made to the decision in Y.S. Jagan Mohan Reddy v. Central Bureau of Investigation (2013) 7 SCC 439 . Are the PMLA offences cognizable? 24. It must be noted at the outset that although PMLA was passed by the Parliament in 2002 it was not notified and did not became operational till 1st July 2005. While tabling the PML Amendment Bill in 2005 the Finance Minister explained that two kinds of steps were required to be taken to implement the PMLA. One was to appoint an authority to gather intelligence and information, and the other was an authority to investigate and prosecute. Since a number of lacunae were noticed in the PMLA, it became necessary to remove them. 25. Specific to the question whether the offences under PMLA were cognizable or non-cognizable, the Finance Minister said: Under the existing provisions in Section 45 of the Act, every offence is cognizable. If an offence is cognizable, then any police officer in India can arrest an offender without warrant. At the same time, under Section 19 of the Act, only a Director or a Deputy Director or an Assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as far as the Parliament was concerned, the amendment to Section 45 was with the specific intention of making the offences under the PMLA non-cognizable. Yet, for some reason which could only be explained as inadvertence, the heading of Section 45 PMLA was not changed. 29. Section 45 prior to the 2005 amendment read as under: 45. Offences to be cognizable and non-bailable (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) (a) every person punishable under this Act shall be cognizable; (b) no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bound unless (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. 31. A comparison of two provisions shows that although the heading of Section 45 has not undergone a change, the provision itself clearly has. Section 45 (1) (a) as it stood prior to 1st July 2005 was deleted and this was now consistent with the second proviso which states that the special court shall not take cognizance except on a complaint in writing, 32. In Guntaiah v. Hambamma ( supra ) the Supreme Court explained that: Side notes cannot be used as an aid to construction. They are mere catchwords and I have never heard... that an amendment to alter a side note could be proposed in either House.... So side notes cannot be said to be enacted in the same sense as the long title or any part of the body of the Act. 33. Further, in Union of India v. National Federation of the Blind (2013) 10 SCC 772 it was explained that heading of a section or marginal note may be relied upon to clear any doubt or ambiguity but not when a plain reading of the Section itself does not give rise to any doubt or ambiguity. 34. The Court is conscious that in Vaka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of the provisions is expressly barred. Moreover, Sections 44 to 46 of the PMLA Act specifically incorporate the provisions of Cr.P.C. to the trials under the PMLA Act. Thus, not only that there is no provision in the PMLA Act excluding the applicability of Cr.P.C., on the contrary, provisions of Cr.P.C. are incorporated by specific inclusion. Even Section 65 of the PMLA Act itself settles the controversy beyond any doubt in this behalf which reads as under: 65. Code of Criminal Procedure, 1973 to apply.- The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, in so far as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act. We may also refer to judgment of this Court in 'Directorate of Enforcement v. Deepak Mahajan and Another' [1994 (3) SCC 440] wherein it was held as under: 141. In the result, we hold that sub-sections (1) and (2) of Section 167 are squarely applicable with regard to the production and detention of a person arrested under the provisions of Section 35 of FERA and 104 of Custom A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 157 Cr PC, maintaining a case diary as mandated by Section 172 Cr PC and producing such case diary before the Magistrate upon arrest of the accused as mandated by Section 167 Cr PC has to be followed. If the offence is noncognizable the procedure under Sections 155, 167 (1) and 172 Cr PC would have to be followed. The law in this regard has further been made clear in the decisions of the Supreme Court in Deepak Mahajan ( supra ) and Om Prakash v. Union of India ( supra ) and of this Court in Asmita Agarwal v. Enforcement Directorate ( supra ). 41. It appears to this Court that there is no alternative to the DOE but to follow the Cr PC, except where there are specific provisions in the PMLA that provide an alternative procedure. Given the mandate of Articles 21 and 22 of the Constitution of India the powers under the PMLA in relation to the offences under the PMLA, have to be governed by the Cr PC, if not by the PMLA. This is expressly recognised and acknowledged by Section 65 PMLA. It is, therefore, not open to the DOE to choose to not follow the Cr PC in an area where the PMLA is silent. Here again, therefore, this Court is unable to subscribe to the contrary co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould, in the considered view of the Court, not suffice. Merely reading out the grounds of arrest to the detenu would defeat the very object of requiring the reasons to believe to be recorded in writing and communicated to the detenu. As explained the Constitution Bench of the Supreme Court in C.B. Gautam ( supra ), in the context of the IT Act, the obligation to record reasons and convey the same to the party concerned operates as a deterrent against possible arbitrary action by the quasi-judicial or the executive authority invested with judicial powers. Also it is not understood why the DOE did not want to provide the detenu the copy of grounds of arrest as recorded by it. It would not prejudice the DOE in any way. 47. The Notes on Clauses accompanying the PML Bill, 1999 clarified what was intended as follows: Clause 18 proposes to empower the Director, the Deputy Director, the Assistant Director or any other authorized officer to arrest a person if he has reason to believe that the person is guilty of an offence under the proposed legislation. Necessary safeguards such as furnishing the grounds of arrest and production before the Judicial Magistrate or a Metropolitan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t illegal. This Court is unable to subscribe to that view in view of the above discussion. It appears to this Court that there can ordinarily be nothing secret, qua the detenu, about his own grounds of arrest. 52. Further, in the present case, the grounds of arrest enclosed with the short affidavit of the DOE, filed in response to the writ petition, runs into four pages. It is not the case of the DOE that anything in the grounds of arrest is covered by the Official Secrets Act or any such law prohibiting it from being communicated. The basic idea is for the Petitioner to know why he has been arrested. How could he be expected to apply for bail or oppose a request of the DOE for extending his remand without knowing the grounds of his arrest? How would the object of Section 19 (1) PMLA be served if the four page grounds of arrest are merely read out to him or offered for inspection without providing a copy thereof? Why the DOE should fight shy of providing the Petitioner the grounds of arrest to the Petitioner at the time of his arrest is not clear at all. 53. In the considered view of the Court, the interpretation placed on Section 19 (1) PMLA by the Division Bench of this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to subscribe to view of the Division Bench in Moin Akhtar Qureshi ( supra ). 56. Consistent with judicial discipline, since this Bench is of the view that the decisions of the coordinate Bench of this Court in Moin Akhtar Qureshi v. Union of India ( supra ) and Vakamulla Chandrashekhar v. Enforcement Directorate ( supra ) require reconsideration, it refers to a larger Bench, the following questions for consideration: (i) Consequent upon the amendment in Section 45 of the PMLA with effect from 1st July 2005, are the offences under the PMLA cognizable or noncognizable? (ii) Do the provisions of Chapter XII Cr PC apply to PMLA insofar as the offences under the PMLA are concerned and if so, to what extent? (iii) Under Section 19 of PMLA read with Rules 2 (h) and 2 (g) of the PML Arrest Rules read with Rule 6 and Form III thereof, does a person arrested under Section 19 (1) of the PMLA have to be furnished a copy of the grounds of arrest? If so, should they be furnished soon enough to enable the person arrested to apply for bail or to oppose the application for remand? What are the consequences of the failure to do so? (iv) Notwithstanding that the remand of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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