2016 (9) TMI 265 - HC - Money Laundering

Accused of offense under Sections 3 read with section 4 of PMLA - arrest orders - Held that - Rigors of Section 45(1)(ii) of PMLA would be attracted only while considering the application of an accused for release on bail or his own bond, if he has been arrested by the authorized officer under Section 19 of the PMLA before taking cognizance. Thus if any person though available was neither arrested during investigation under PMLA, nor produced in custody as envisaged in Section 170 Cr.P.C, if upon issuance of process in a PMLA Complaint either by summons or warrant he appears before Court on his own volition, he would be entitled to forthwith furnish his bonds with or without sureties for further appearances without any incarceration in custody. Section 45(1)(ii) of PMLA has no application in case of a person not arrested under section 19 of PMLA in such execution of bond for further appearance. At post cognizance stage, any person already arraigned as an accused of offence under Sections 3 read with section 4 of PMLA, cannot be arrested under Section 19 of PMLA, and such person can be arrested only upon execution of warrant if issued by the Court taking cognizance.

Issues Involved:
1. Jurisdiction of the High Court
2. Arrest under Section 19 of PMLA
3. Application of Section 45(1)(ii) of PMLA
4. Applicability of Section 88 and Section 167(2) of CrPC
5. Issuance of summons or warrants by the Special Court
6. Legal precedents and guidelines for arrest and bail

Issue-wise Detailed Analysis:

1. Jurisdiction of the High Court:
The court examined the jurisdictional issue by referring to the Supreme Court's decision in Navinchandra N. Majithia v. State of Maharashtra, concluding that substantial cause of action had arisen within its jurisdiction.

2. Arrest under Section 19 of PMLA:
The petitioner argued that the accused should have been arrested during the investigation under Section 19 of PMLA. However, the court found no merit in this argument, stating that "any person already arraigned as an accused of offense under Sections 3 read with section 4 of PMLA, cannot be arrested under Section 19 of PMLA" post-cognizance. The court emphasized that arrest under Section 19 requires a reason to believe, recorded in writing, that the person is guilty of an offense punishable under PMLA.

3. Application of Section 45(1)(ii) of PMLA:
The petitioner contended that Section 45(1)(ii) of PMLA imposes twin conditions for bail, similar to the NDPS Act, TADA, POTA, and MCOCCA. The court disagreed, stating that Section 45(1)(ii) applies only to those arrested under Section 19 of PMLA before cognizance. The court held that "Section 45(1)(ii) of PMLA has no application in case of a person not arrested under section 19 of PMLA in such execution of bond for further appearance."

4. Applicability of Section 88 and Section 167(2) of CrPC:
The court found that Section 88 of CrPC applies when a person appears voluntarily before the court. It stated, "Section 88 of the CrPC shall apply upon appearance of the accused person on his own volition before the Trial Court to furnish bonds for further appearances." The court also noted that Section 167(2) of CrPC would apply if the investigation is not completed within the stipulated time, granting the accused the right to bail.

5. Issuance of Summons or Warrants by the Special Court:
The court held that the Special Court should issue summons first, as per Section 87 of the CrPC, unless there are reasons to issue a warrant. It stated, "The Special Court was duty bound to first issue summons in absence of any reasons mentioned in section 87 of the Code."

6. Legal Precedents and Guidelines for Arrest and Bail:
The court referred to several precedents, including Union of India v. Thamisharasi and Inder Mohan Goswami Vs. State of Uttranchal, to support its conclusions. It emphasized that the guidelines laid down by the Supreme Court and other high courts must be followed, stating, "The view taken by the co-ordinate Bench is also in consonance with the guidelines laid down for criminal courts by the Hon’ble Delhi High Court in Court on its own Motion v. State through CBI."

Conclusion:
The court dismissed the writ petition, rejecting all prayers of the petitioner. It concluded that the rigors of Section 45(1)(ii) of PMLA apply only to those arrested under Section 19 before cognizance. The court also clarified that post-cognizance, accused persons appearing voluntarily should be allowed to furnish bonds without incarceration. The judgment emphasized adherence to established legal principles and guidelines for arrest and bail.

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