2023 (12) TMI 1111 - HC - Money Laundering

Validity of remand orders made by the learned trial Judge concerned - whether the arrest of the petitioners was terms of the relevant provisions embodied in Sections 17-A, 18(1), and, in Section 19(1) of the Prevention of Money Laundering Act, 2002? - HELD THAT - It has but clearly emerged rather from the evident fact, qua the accused, thus respectively accompanying the officials of the E.D., on 27.10.2023, respectively in the seized car or in the car belonging to them. Therefore, the said manner of the accused accompanying the E.D. officials, does tantamount to theirs being then unlawfully restrained, and, as such, the accompanying of the accused in the said vehicles, thus on 27.10.2023 but also becomes the actual date of theirs being, thus arrested then. However, when on the said date the accused were not supplied with the grounds of arrest or the reasons to believe, that they have committed offences punishable under the Act of 2002. Consequently, thereby pervasive breach is caused to the mandatory provisions. The argument, if any, as addressed before this Court by the learned ASG concerned, that the said accompanying of the accused in the vehicles, was only in pursuance to summons, becoming issued upon them, for ensuring that thereby, they are interrogated at the E.D. headquarters located at Delhi, is but also liable to be rejected - The reasons for rejecting the above argument, but is again planked, upon the trite evident fact, that unless the accused had willingly accompanied the E.D. officials concerned, thus in their private vehicles or in the vehicle of their relatives, thereupon theirs in the above mode of theirs accompanying the E.D. officials to the E.D. headquarters, located at Delhi, would be construed to be theirs thereby then, thus becoming unlawfully restrained. 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 Dikrector and Others 2023 (8) TMI 410 - SUPREME COURT , 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. This Court quashes the order of remand, and, in the exercise of writ jurisdiction, declares the arrest of the petitioners to be non-est and void. In consequence, after allowing the instant petitions, this Court quashes the impugned order of remand (Annexure P-1 in both petitions), and, orders that the petitioners be released from judicial custody, but subject to theirs furnishing personal, and, surety bonds in the sum of Rs. 5,00,000/- each, before the learned trial Court/Chief Judicial Magistrate/Duty Magistrate concerned, and, to his satisfaction, and, also subject to theirs not tampering with prosecution evidence, and, also theirs not influencing prosecution witnesses - Petition allowed.

Summary

Issues Involved:
1. Legality of the arrest of the petitioners.
2. Compliance with statutory provisions under the Prevention of Money Laundering Act, 2002.
3. Validity of the remand orders.

Summary:

Legality of the Arrest:
The petitioners were arrested and remanded to judicial custody on 28.10.2023. The court needed to determine if the arrest complied with Sections 17-A, 18(1), and 19(1) of the Prevention of Money Laundering Act, 2002. The petitioners argued that they were effectively arrested on 27.10.2023 when they were restrained and taken in vehicles by the Enforcement Directorate (ED) officials without being informed of the grounds for their arrest, thus violating the statutory provisions.

Compliance with Statutory Provisions:
The petitioners contended that the restraint on 27.10.2023 constituted an arrest and since no grounds for arrest were provided then, it breached statutory requirements. They relied on judgments from the Bombay, Karnataka, and Andhra Pradesh High Courts, which state that a person's arrest begins when they are placed under restraint or their freedom is jeopardized. The Additional Solicitor General (ASG) argued that the petitioners were only detained for interrogation and were formally arrested on 28.10.2023, complying with statutory requirements.

Validity of the Remand Orders:
The court rejected the ASG's argument that the petitioners were not arrested on 27.10.2023 but merely detained for interrogation. The court concluded that the petitioners were unlawfully restrained on 27.10.2023, making it the actual date of arrest. Since the grounds for arrest were not provided on this date, there was a breach of mandatory statutory provisions. The court also dismissed the ASG's claim that the remand orders condoned these lapses, citing the Supreme Court's mandate that remand orders must reflect the application of judicial mind and adherence to statutory requirements.

Conclusion:
The court quashed the remand orders, declared the arrest of the petitioners to be non-est and void, and ordered their release from judicial custody. The petitioners were required to furnish personal and surety bonds, surrender their passports, and undertake not to leave India without the court's permission.