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TMI Blog2023 (9) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... llegally arrested on 27.06.2023 by Respondent No. 2 and was not informed/served the grounds of his arrest. On 28.06.2023 when the petitioner was produced before the learned Special Judge an application was moved seeking copy of ground of arrest which was opposed by the ED and the learned Special Judge directed the ED to file the reply in this regard that the ground of arrest had not been supplied/served upon the petitioner. 3. On 10.07.2023, reply to the application seeking grounds of arrest was filed by the Enforcement Directorate wherein it was claimed that the grounds of arrest were informed to the Petitioner and he was made to read and sign the same. However, the ED refused to supply/serve copy of the same to the Petitioner. The petitioner has stated that a bail application was moved on 13.07.2023 which was rejected on 22.07.2023 by the learned Special Judge and the petitioner was remanded to judicial custody thereafter. 4. The petitioner has also submitted that the ld. NCLAT, New Delhi in Company Appeal (AT) (INS) 406/2022 has passed an order fixing 31.08.2023 as the deadline for completing all process of due diligence and submission of the term sheet of interim finance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by way of an information being served on the arrestee of the grounds of arrest. The petitioner stated that it was inter alia held that any noncompliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. The petitioner stated that in the present case this direction has been completely violated. The petitioner has also taken a plea that the arrest of the petitioner on 27.06.2023 by Enforcement Directorate has jeopardised the interests of almost 17000 (approx.) homebuyers, as well as the Settlement-cum-Resolution Plan that had been approved by Hon'ble NCLAT by order dated 10.06.2022, which was also approved by the Hon'ble Supreme Court by order dated 11.05.2023. 7. The petitioner has submitted that Section 19 of the PMLA has not been followed in the present case. It has been further submitted that the procedure followed in arresting the petitioner is illegal and contrary to the well settled principles of law. 8. The petitioner has relied upon State of Punjab Vs, Ajaib Singh, AIR 1953 SC 10, wherein it was inter alia held that a person to be arrested is to be informed of the grounds for his arrest before he is actually arrested. 9. The petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice vs. Rahul Modi (2019) 5 SCC 266 and Kanu Sanyal v. Distt. Magistrate, Darjeeling, (1974) 4 SCC 141. 17. ED submitted that a writ petition challenging the legality of arrest would not stand if a person is in custody in pursuance of a judicial order. Reliance has been placed State of Maharashtra v. Tasneem Rizwan Siddiquee, (2018) 9 SCC 745. 18. In the counter affidavit, it has been submitted that since the accused has been validly remanded to custody, the present petition is not maintainable. 19. Reliance has been placed upon Basanta Chandra Ghose v. King Emperor, 1945 SCC OnLine FC 3, Naranjan Singh Nathawan v. State of Punjab, (1952) 1 SCC 118 : 1952 SCC OnLine SC 4, Talib Hussain v. State of J&K, (1971) 3 SCC 118, Col. B. Ramachandra Rao (Dr) V. State of Orissa, (1972) 3 SCC 256, Sanjay Dutt v. State through CBI, Bombay (II), (1994) 5 SCC 410, Bhagwan Singh V. State of Rajasthan, 2005 SCC OnLine Raj 861 : (2006) 1 RLW 790, Saurabh Kumar v. Jailor, Koneila Jail, (2014) 13 SCC 436, State of Maharashtra v. Tasneem Rizwan Siddiquee, (2018) 9 SCC 745 : (2019) 1 SCC (Cri) 386 : 2018 SCC OnLine SC, Serious Fraud Investigation Office v. Rahul Modi, (2019) 5 SCC 266, State v. H. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bovementioned case of Rajbhushan Omprakash Dixit vs. Union of India (supra) and the same was registered as Transferred Case (Crl.) No. 3 of 2018 and was tagged with SLP (Crl) 4364/2014 i.e., Vijay Madanlal Batch of matters and the said issue has been decided by the Hon'ble Supreme Court in Vijay Madanlal (supra) at Para 458 and 459 and is no longer res integra. 23. ED further submitted that after the decision the Hon'ble Supreme Court has transferred back the said case i.e., Rajbhushan Omprakash Dixit (supra) to this Court. It was pointed out that the Hon'ble Supreme Court at Para 469 of Vijay Madanlal specifically inter alia directed that: "In these transferred cases, the parties are relegated before the High Court by restoring the concerned writ petition(s) to the file of the concerned High Court to its original number limited to consider relief of discharge/bail/quashing, as the case may be, on its own merits and in accordance with law. It would be open to the parties to pursue all (other) contentions in those proceedings, except the question of validity and interpretation of the concerned provision(s) already dealt with in this judgment. The transferred cases are disposed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right in writing. It was inter alia held that it is sufficient if such information is communicated to the person concerned orally and as far as possible in the presence of some independent and respectable persons witnessing the arrest and search. 29. Reliance has also been placed upon Soni Natverlal Prabhudas and Ors. vs. State of Gujarat and Ors., Vijaysingh Chandubha Jadeja vs. State of Gujarat , (2011) 1 SCC 609. 30. ED submitted that the reliance placed on V. Senthil Balaji v. State, 2023 SCC OnLine SC 934 by the petitioner is absolutely misplaced as the same procedure was followed in the case of V. Senthil Balaji, at the time of arrest and the Apex Court did not find any fault with it. Additionally, that the judgment of the Hon'ble Supreme Court in the said case only requires the information to be served, which can even be done orally. It has been submitted that in this case the information of grounds of arrest was given in writing. It is submitted that it is undisputed that the petitioner had read and acknowledged the written grounds of arrest and also signed the same in his own handwriting. 31. Reliance has been placed upon Khimji Raja Harijan v. District Magistrate, 1987 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constitutional obligation on the respondent to supply the grounds of arrest. 38. Dr. Singhvi further submitted that this court is bound to rely on V. Senthil Balaji. He submitted that the Hon'ble Supreme Court speaking through V. Senthil Balaji(Supra) has made it crystal clear that grounds of arrest have to be served upon the arrestee and non-supply of it would vitiate the entire proceeding. Dr. Abhishek Manu Singhvi submitted that in no manner the Vijay Madanlal Choudhary (Supra) and V. Senthil Balaji (Supra) are irreconcilable. Dr. Abhishek Manu Singhvi also submitted that V. Senthil Balaji cannot be termed as an incuriam judgment. 39. Dr. Abhishek Manu Singhvi, learned senior counsel submitted that rather the ED should not be insisting that the court follow the judgment of Vijay Madanlal Choudhary and ignore the judgment of V. Senthil Balaji. Learned senior counsel submitted that Vijay Madanlal Choudhary judgment is oriented towards elaborating/ examining validity of law as it was a batch of matters challenging validity of law, whereas V. Senthil Balaji is fact-based matter where an individual was concerned and there is no irreconcilable conflict between the two. 40. Dr. Abh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person being involved in offence of money-laundering. Not only that, it is also the obligation of the authorised officer to produce the person so arrested before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within twenty-four hours. This production is also to comply with the requirement of Section 167 of the 1973 Code. There is nothing in Section 19, which is contrary to the requirement of production under Section 167 of the 1973 Code, but being an express statutory requirement under the 2002 Act in terms of Section 19(3), it has to be complied by the authorised officer." 43. Learned senior counsel further submitted that in Vijay Madanlal Choudhary reliance was placed on Premium Granite vs. State of Tamil Nadu 1994 2 SCC 691 to indicate that reasons are required to be noted while exercising discretionary power to check arbitrariness and referred to Para 325 wherein it was held as under: "The safeguards provided in the 2002 Act and the preconditions to be fulfilled by the authorised officer before effecting arrest, as contained in Section 19 of the 2002 Act, are equally stringent and of higher standard. Those safeguards ensure that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent/ED on Para 459 on Vijay Madanlal Choudhary is misplaced as it deals with ECIR and not grounds of arrest. Learned senior counsel submitted that ED may be justified by certain judgments in not providing ECIR. However, ED is not at all at liberty to not provide grounds of arrest as judgments after judgments have stated that grounds should be communicated as soon as may be and cannot be interpreted to take liberty of not submitting yet till this stage. 45. Dr. Abhishek Manu Singhvi, learned senior counsel submitted that petitioner has not come under Habeas Corpus petition but challenging the very basis of arrest due to non-providing of grounds of arrest whereas the purpose of Habeas Corpus is served the moment person is brought before court. It has been submitted that in the present petition the scope of the court to consider the legality of the arrest is very wide. 46. Learned senior counsel has placed reliance upon V. Senthil Balaji and submitted that the facts were different and the grounds of arrest were provided but were denied by accused. Hence, they were served to the family of the accused. Learned senior counsel has placed reliance upon V. Senthil Balaji to bolster ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be extended soon. 52. Learned senior counsel submitted that that petitioner is required for conduct of 25 ongoing projects which caters the needs of 17,000 customers. Learned senior counsel submitted that the petitioner has sufficient roots in the society and has an annual turnover of 2700 cr. Learned senior counsel submits that an alternative the petitioner may be released on interim bail to protect the interest of 17,000 home buyers. 53. In the rejoinder, Dr. Abhishek Manu Singhvi, learned senior counsel and Mr. R.K. Handoo have further reiterated that Vijay Madanlal Choudhary has not been violated at all by V. Senthil Balaji. Dr. Abhishek Manu Singhvi, learned senior counsel submits that ED is misusing its power to the hilt and therefore counter balancing against ED is necessary. Learned senior counsel also submitted that the matter involving personal liberty requires a different perspective by the court. Learned senior counsel has submitted that if a liberal approach is not taken all safeguards will be negated. Learned senior counsel has submitted it cannot be comprehended why ED is shying away from giving the grounds of arrest to the petitioner. 54. Zoheb Hossain, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestions raised have no relevance in the broader context of the case, where there was abundant material and meticulous compliance. He further submits that upon an application by the ED seeking judicial custody of the petitioner, he was remanded to judicial custody vide order dated 10.07.2023 and hence the legality of the initial arrest and remand cannot be sought to be challenged at this stage. Reliance in this regard is placed on the findings of the Hon'ble Supreme Court on this issue in the case of Serious Fraud Investigation Office vs. Rahul Modi (2019) 5 SCC 266: "It is true that the arrest was effected when the period had expired but by the time the High Court entertained the petition, there was an order of extension passed by the Central Government on / 4-12-2018. Additionally, there were judicial orders passed by the Judicial Magistrate as well as the Special Court, Gurugram, remanding the accused to custody. If we go purely by the law laid down by this Court with regard to exercise of jurisdiction in respect of habeas corpus petition, the High Court was not justified in entertaining the petition and passing the order." 57. That reliance in this regard is also placed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of informing the grounds of arrested "as soon as may be" stood fulfilled. The expression "as soon as may be" in the context of Article 22(5) has been interpreted by the Hon'ble Supreme Court in K.M. Abdulla Kunhi v. Union of India, (1991) 1 SCC 476 at Para 12 to mean that there can be no hard and fast rule and there is no period prescribed either under the Constitution or under the law so long as the legal requirement of informing is not dealt with with supine indifference, slackness or callous attitude. Reliance has been placed on Moin Akhtar Qureshi vs. UOI 2017 SCC OnLine Del 12108, Chhagan Chandrakant Bhujbal vs. Union of India 2016 SCC OnLine Bom 9938. 61. It is further submitted that the reliance placed by petitioner on the order of this Hon'ble Court in Rajbhushan Omprakash Dixit vs. Union of India is misplaced as the same is merely an interim order; which do not have precedental value. In this regard, reliance is placed on the decision of the Hon'ble Supreme Court in the case of Sundeep Kumar Bafna vs. State of Maharashtra (2014) 16 SCC 62. Additionally, it is submitted that the Apex court in Vijay Madanlal decided the issue by stating "So long as the person has been info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Hon'ble Supreme Court in the case of Vijay Madanlal Chaudhary vs. Union of India & Ors., 2022 SCC OnLine SC 929, which rejected the challenge to the abovementioned mandatory twin conditions u/s 45 of the PMLA and cemented its constitutional validity. Further reliance in this regard is placed on Bimal Kumar Jain and Naresh Jain vs. Directorate of Enforcement, Bail Appln. 112/2021 and 122/2021, Christian Michel James vs. Directorate of Enforcement - Bail Appln. 2566/2021, Raj Singh Gehlot vs. Directorate of Enforcement Bail Appln. 4295/2021, Gautam Thapar vs. Directorate of Enforcement Bail Appl. 4185/2021, Sajjan Kumar vs. Directorate of Enforcement - Bail Appln. 926/2022) 65. The counsel submits that the material placed on record is sufficient to persuade this Hon'ble Court that no satisfaction, as required u/s 45 of the PMLA, can be reached. 66. In order to respond to the questions of law raised by the petitioner the court is required to first prefer to the relevant provisions of law Section 19 of the PMLA provides as under: "19. Power to arrest.-(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This has to be read along with the Rule 2 of the Prevention of Money Laundering (the forms and the manner of forwarding a copy of order of arrest of a person along with the material to the adjudicating authority. Hence its period of retention) Rules 2005. Rule 2(g) of therein provides that the "material" means any information or any material in the possession of the officer means the material on the basis of which he has recorded the reasons to believe that any person has been guilty of an offence. Section 2(h) also provides that the "order" means the order of arrest of a person and it includes the ground for such arrest under Section 19(1). In addition to this, Section 19(3) provides that the arrested person shall be within 24 hours be taken to the Special Court, Judicial Magistrate or MM as the case may be. Thus, the conjoint reading of Rule 2, Section 19(1) and Section 19(2) makes it clear that before affecting the arrest of an accused the following prerequisites are essential: a. There must be material in the possession of the concerned officer indicating the reason to believe, which are recorded in writing, that any person has been guilty of an offence. b. If the officer p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal liberty and the constitutional safeguards, the Apex court made it mandatory to comply with the prerequisites stipulated under Section 19 and Rule 2(g), 2(h), 3(1) and 3(7). Moreover, if any of such rules are not complied with or if there is a non-compliance of the mandate under Section 19(1), it would vitiate the very arrest. It is pertinent to mention here that the rules are framed as an aid to the statue framed by the legislature and must be read in ejusdem generis with each other. 73. The question which lies at the heart of the entire case of the petitioner is that the grounds of arrest have to be supplied in writing to the accused contemporaneously at the time of arrest and if the same are not supplied in writing to the accused, the mandate of Section 19(1) is not complied with and thus, proceedings stands vitiated. 74. Per contra the case of the ED is that the mandate of the law has to be read as provided by the statute. The case of the ED is that the statute provides that the grounds of arrest have to be informed to the arrestee as soon as it may be possible, and it is not necessary that copy of such grounds of arrest have to be served to the arrestee contemporane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is mandatorily required to be recorded and supplied to the accused as per the provisions of 1973 Code. Revealing a copy of an ECIR, if made mandatory, may defeat the purpose sought to be achieved by the 2002 Act including frustrating the attachment of property (proceeds of crime). Non-supply of ECIR, which is essentially an internal document of ED, cannot be cited as violation of constitutional right. Concededly, the person arrested, in terms of Section 19 of the 2002 Act, is contemporaneously made aware about the grounds of his arrest. This is compliant with the mandate of Article 22(1) of the Constitution. It is not unknown that at times FIR does not reveal all aspects of the offence in question. In several cases, even the names of persons actually involved in the commission of offence are not mentioned in the FIR and described as unknown accused. Even, the particulars as unfolded are not fully recorded in the FIR. Despite that, the accused named in any ordinary offence is able to apply for anticipatory bail or regular bail, in which proceeding, the police papers are normally perused by the concerned Court. On the same analogy, the argument of prejudice pressed into service by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck Co. Ltd. V. Horton (1951 AC 737 at p.761), Lord Mac Dermot observed: "The matter cannot, of course, be settled merely by treating the ipsissima vertra of Willes, J as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished judge." In Home Office v. Dorset Yacht Co. (1970 (2) All ER 294) Lord Reid said, "Lord Atkin's speech.....is not to be treated as if it was a statute definition It will require qualification in new circumstances." Megarry, J in (1971) 1 WLR 1062 observed: "One must not, of course, construe even a reserved judgment of Russell L.J. as if it were an Act of Parliament." And, in Herrington v. British Railways Board (1972 (2) WLR 537) Lord Morris said: "There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances made in the setting of the facts of a particular case." 5. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaining to the arrest was also intimated to his brother, sister-in-law and wife. 78. It is also necessary to refer to the submissions made by the appellant in V. Senthil Balaji case. The appellant in that case had primarily raised 4 issued. a) There is no power vested under the PMLA 2002 to seek custody in favour of unauthorised officer as such unauthorised officer is not a police officer and therefore Section 162 of Cr.P.C. with particular reference to a remand in his favour is not available. b) Being a beneficial legislation non-compliance of Section 41A of Cr.P.C. would vitiate the orders of remand. c) The outer limit of 15 days of custody to the police from the date of arrest has worked itself out therefore no court can extend it under any circumstances. d) The High Court has committed an error in not appreciating the legislative scheme and the time line in the light of Article 22 of Constitution of India. 79. Thus, apparently the interpretation of Section 19 as held in Vijay Madanlal Choudhary was not specifically raised before in V. Senthil Balaji case. However, the Apex Court in V. Senthil Balaji, while discussing the provision of PMLA and in particular Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such cases may hamper the case of the prosecution/investigating agency. It is also pertinent to refer to the court of Justice Benjamin Cardozo of US Supreme Court, as was quoted by the Apex Court in the V. Senthil Balaji case as well, stated that "justice, though due to the accused, is due to the accuser too." It is also pertinent to mention here that in the PMLA, the legislature in its wisdom has used the word "informed" and has not provided any mode for the same in the statute or in the rules. In absence of any such mode of information being prescribed in the statute, this court has to fall back to the common law. In this regard reference can be made to the division bench judgment of this court in Moin Akhtar Qureshi vs. UOI which held as under: "90. Thus, we agree with Mr. Mahajan that, firstly, there was no illegality in the initial arrest of the petitioner. There was sufficient compliance of Article22(1) of the Constitution of India, as the petitioner stood informed of the grounds of his arrest when he was permitted to read the same. He was also informed of the same vide the remand application under Section 167 CrPC read with Section 65 of the PMLA moved on 26.08.2017. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der PMLA. The learned Special counsel for the ED has also placed before this court the grounds of arrest in which the petitioner has specifically written in his hand that "I have been informed and have also read the above mentioned grounds of arrest". 85. Learned senior counsel for the petitioner has referred to the Constitutional Bench Judgment of State of Bombay Vs. Atmaram to buttress that the grounds of arrest have to be furnished at the time of detention so as to enable the person to make the proper representation. I consider that in view of the specific law laid down on the point in question, the judgment is respectfully distinguished on the facts and circumstances of the case. The judgment cited by the learned senior counsel for the petitioner in Madhu Limaye and Ors., 1969(1) SCC 292 is to the affect that the petitioners in that case were released on the ground that the show cause notices issued satisfied the constitutional requirement. However, it is pertinent to mention here that in Madhu Limaye the Apex Court inter alia held that once it is shown that the arrest made by the police officer were illegal, it was necessary for the state to establish that at the stage of rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of answer to Question(A) there is no violation of Fundamental Rights of the petitioner. There is nothing or the record to suggest that petitioner has been denied right to consult and defended by legal practitioner. Q(C). Whether the fundamental right of the petitioner guaranteed to him under Art. 21 of the Constitution of India has been violated by depriving him of his life and personal liberty - subjecting him to an illegal arrest by setting the criminal law in motion contrary to the procedure established by law? Ans. In view of the discussion made herein above there is nothing on record to suggest that reason to believe "as required under Section 19(1) of the PMLA was not recorded in writing and, therefore, it cannot be held that petitioner was arrested illegally. Q(D). Whether the Petitioner's arrest is contrary to s. 19 of the Prevention of Money Laundering Act, 2002 - thereby violating the Petitioner's fundamental right under Art. 21 read with Art. 14 of the Constitution of India? Ans. The petitioner here failed to show that the arrest of the petitioner is in violation of Section 19 of the PMLA. 90. In view of the discussions made herein above, the petition along ..... X X X X Extracts X X X X X X X X Extracts X X X X
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