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2023 (9) TMI 660 - HC - Money LaunderingMoney Laundering - illegal arrest - Reasons for arrest of the accused are not supported with any justifiable material - transfer of funds to the subsidiary and associated entities - fake entities - HELD THAT - The Apex Court in V. Senthil Balaji 2023 (8) TMI 410 - SUPREME COURT categorically held that there is no need of compliance of Section - 41A of the Cr.P.C. However, as on the date of the impugned order dated 14.06.2023, the Designated Court is not having benefit of going through the said judgment and relying on the principle laid down in Satender Kumar Antil 2022 (8) TMI 152 - SUPREME COURT the Designated Court rejected the remand of the respondents vide impugned order dated 14.06.2023. The Apex Court in Senthil Balaji categorically held that Section - 41A of the Cr.P.C. has got no application to an arrest made under the PMLA. The said judgment was rendered by the Apex Court on 07.08.2023, whereas the impugned order is dated 14.06.2023. Therefore, the Designated Court is not having benefit of going through the said order, and consider the said aspect. Reasons for arrest of the accused are not supported with any justifiable material - HELD THAT - There is dispute with regard to furnishing of documents by the ED along with remand application. According to the respondents, ED has filed copies of FIR, grounds of arrest and medical certificates, whereas according to the ED, it has filed all the supporting material in support of the reasons for arrest of the accused. However, the Designated Court did not refer the said aspects in its order dated 14.06.2023. It is for the Designated Court to consider the material filed by the ED in support of the reasons for arrest of the accused. The Designated Court is not having the benefit of going through the judgment of the Apex Court in Senthil Balaji - impugned order set aside - matter is remanded back to the learned Metropolitan Sessions Judge/Designated Court under PMLA, Nampally, Hyderabad, with a direction to consider the remand application submitted by the ED and pass appropriate orders strictly in accordance with law by putting the ED and the respondents - accused on notice and affording them an opportunity - petition allowed by way of remand.
Issues Involved:
1. Legality of the arrest of the respondents under the Prevention of Money-Laundering Act (PMLA). 2. Compliance with Section 41-A of the Code of Criminal Procedure (Cr.P.C.). 3. Validity of the remand rejection order by the Metropolitan Sessions Judge. 4. Entitlement of respondents to compensation and disciplinary action against erring officers. Summary of Judgment: 1. Legality of Arrest under PMLA: The Directorate of Enforcement (ED) challenged the remand rejection order dated 14.06.2023 passed by the Metropolitan Sessions Judge, Hyderabad, which refused to grant remand of the respondents (accused Nos. 1 to 3) for the offence under Section 3 read with 4 of the PMLA. The respondents filed writ petitions and criminal revision cases to declare their arrest illegal and sought compensation and disciplinary action against the officers involved. 2. Compliance with Section 41-A of Cr.P.C.: The Metropolitan Sessions Judge rejected the remand application on the grounds of non-compliance with Section 41-A of Cr.P.C. and lack of justifiable material for the arrest. However, the Supreme Court in V. Senthil Balaji clarified that Section 41-A of Cr.P.C. does not apply to arrests made under PMLA. This judgment was delivered on 07.08.2023, after the impugned order dated 14.06.2023, thus the Designated Court did not have the benefit of this ruling. 3. Validity of Remand Rejection Order: The Designated Court's order was based on the principle laid down in Satender Kumar Antil, which emphasized the need for compliance with Section 41-A of Cr.P.C. for remanding an accused. However, the Supreme Court's subsequent judgment in V. Senthil Balaji clarified that PMLA arrests do not require compliance with Section 41-A of Cr.P.C. The ED argued that the reasons for arrest were adequately documented, but the Designated Court did not refer to these aspects in its order. 4. Entitlement to Compensation and Disciplinary Action: The respondents sought compensation and disciplinary action under Section 62 of the PMLA for their alleged illegal arrest. The Court noted that since the matter is remanded back for fresh consideration, the respondents can seek compensation and action against erring officers after the Designated Court decides on the legality of the arrest. Conclusion: The impugned order dated 14.06.2023 was set aside, and the matter was remanded back to the Metropolitan Sessions Judge/Designated Court under PMLA, Nampally, Hyderabad, for fresh consideration of the remand application. The Designated Court was directed to consider the principles laid down by the Supreme Court and allow both the ED and the respondents to present all relevant materials and arguments. The respondents were not required to be physically present during the hearing but must appear on the date when the matter is posted for orders. The Criminal Revision Case No. 378 of 2023 was allowed, while the writ petitions and Criminal Revision Case No. 509 of 2023 were disposed of without any order as to costs.
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