2022 (3) TMI 331 - DSC - Money Laundering

Remand Application for the purpose of investigation under the provisions of the Prevention of Money Laundering Act, 2002 - designated as a Global Terrorist by United Nations under United Nations Security Resolution 1267 and also listed under the Fourth Schedule of the UAPA Act, 1967 - accused alleged to be running international terrorist network, which is involved in various terrorist/criminal syndicate, money laundering, circulation of FICN, unauthorized possession/acquisition of key assets for raising terror funds and is working in active collaboration with international terrorist organization. HELD THAT - As per section 3, the offence of money laundering is continuing in nature and it continues till such time a person enjoying the proceeds of crime by its concealment or possession or acquisition or use of untainted property or use or projecting the same as untainted property. Prima facie, there is material to indicate that the accused is in possession of the said property. Therefore, the submission advanced by the ld. Senior Counsel for the accused that no offence is made out against the accused under section 3 of the PMLA, cannot be accepted. Prima facie, an Assistant Director, on the basis of material in his possession, has reason to believe that the accused has committed an offence under section 3 of the PMLA. Arrest order indicates that grounds of arrest are communicated to the accused. It seems that there is substantial compliance under section 19 of the PMLA. Therefore, I am not inclined to accept the submissions advanced on behalf of the ld. Counsel for the accused that accused is illegally arrested. It appears from the report that accused has not cooperated with the investigation on the crucial aspect. Prima facie, there are reasonable grounds to believe that the accusations are well-founded under PMLA. The investigation is at the nascent stage - the custodial interrogation of the accused is necessary to unearth all the ramifications involved in the crime. It is imperative to note that custodial interrogation of the accused is necessary to collect seized, recovered documents at the instance of the accused. The proceeds of crime has traversed since last 20 years and more. Therefore, sufficient time is required to be granted for the investigation of the offence. Accused Mohammed Nawab Mohammed Islam Malik @ Nawab Malik is remanded in the custody of Enforcement Directorate till 03.03.2022.

Summary

Issues Involved:
1. Legality of the accused's arrest.
2. Applicability of the Prevention of Money Laundering Act (PMLA) to the accused.
3. Necessity for custodial interrogation of the accused.

Issue-wise Detailed Analysis:

1. Legality of the Accused's Arrest:
The accused claimed that he was arrested from his house without being issued a summons and was forcibly detained by the Enforcement Directorate (ED). He argued that this arrest was illegal as it did not comply with Section 41A of the Cr.P.C., which mandates notice before arrest in cases where the punishment is less than seven years. The defense cited the Supreme Court ruling in "Arnesh Kumar Vs. State of Bihar And Another," which emphasizes that a Magistrate must ensure the legality of an arrest before authorizing detention. The court, however, found that the arrest was in substantial compliance with Section 19 of the PMLA, which allows arrest if there is reason to believe that the person is guilty of an offense under the Act. The court noted that the grounds for arrest were communicated to the accused, thus rejecting the claim of illegal arrest.

2. Applicability of the Prevention of Money Laundering Act (PMLA) to the Accused:
The defense argued that the transactions in question occurred before the enactment of the PMLA, making the case retrospective and thus violating Article 20(1) of the Constitution. However, the court referred to Section 3 of the PMLA, which defines money laundering as a continuing offense, implying that the act of enjoying the proceeds of crime continues until the property is no longer possessed or used by the accused. The court found prima facie evidence indicating that the accused was in possession of the property in question, thus making the PMLA applicable.

3. Necessity for Custodial Interrogation of the Accused:
The ED argued that the accused's custodial interrogation was crucial for the investigation under the PMLA. The court found that there were serious allegations supported by witness statements indicating that the accused, in collaboration with D-Company associates, usurped property belonging to Munira Plumber and her mother. The court noted that the investigation was at a nascent stage and that custodial interrogation was necessary to uncover all ramifications of the crime, including the tracing of proceeds of crime which spanned over 20 years. The court, therefore, granted the ED's request for 14 days of custody for the accused.

Conclusion:
The court concluded that the arrest was legal and in compliance with the PMLA. It found sufficient prima facie evidence to apply the PMLA to the accused and deemed custodial interrogation necessary for a thorough investigation. Consequently, the accused was remanded to the custody of the Enforcement Directorate until 03.03.2022.