2023 (10) TMI 890 - HC - Money Laundering

Maintainability of petition - Availability of remedy under section 438 Cr.P.C. - Issuance of summons u/s 50(2) and (3) of the PMLA - Illegal detention/arrest by the Respondents and he will be made a scapegoat in order to protect the interest of the main promoters/alleged main beneficiaries of the company. HELD THAT - The power to arrest is conspicuously absent in section 50 of the PMLA - Though section 19 of the PMLA empowers designated officers of the ED to arrest any person, subject to satisfying the conditions mentioned in that provision, it is clear that the power to arrest does not reside in section 50 nor does it arise as a natural corollary of summons issued under section 50. The power under section 50 of the PMLA to issue summons to a person and to require the production of documents and record statements, which is akin to the powers of a civil court, is different and distinct from the power under section 19 to arrest a person. These are two separate and distinct provisions. The exercise of the powers under one, cannot be restrained on the apprehension that it could lead to the exercise of powers under the other - this court would be loath to simply brushing aside the petitioner s contention that apart from filing the present petition, he has no other way of protecting himself from possible unlawful arrest at the hands of the ED and that he is remediless in law. This court is clear that if it is indeed true that the petitioner is remediless in relation to his grievance, a writ petition invoking the extraordinary plenary jurisdiction of this court under Article 226 of the Constitution would always lie. Availability of remedy under section 438 Cr.P.C. - HELD THAT - A meaningful reading of the decision in Vijay Madanlal Choudhary 2022 (7) TMI 1316 - SUPREME COURT , when it says that the underlying principles and rigours of section 45 of the PMLA, viz. the requirements of satisfying the additional twin conditions prescribed therein for obtaining bail, would apply equally to grant of bail under section 438 Cr.P.C., makes it clear that the remedy of applying for anticipatory bail under section 438 Cr.P.C. is available to the petitioner if he apprehends arrest under the PMLA. Though section 71 of the PMLA contains a non-obstante clause, there is nothing in the PMLA which restricts the court from granting relief under section 438 Cr.P.C. in an appropriate case. The only rider being that the twin conditions in section 45 of the PMLA will also have to be satisfied - In the opinion of this court therefore, there is no requirement in law for a prosecution complaint to have been filed for a person to maintain an application under section 438 Cr.P.C. Save for the stringent twin-conditions contained in section 45 PMLA, there is no provision in the PMLA which modifies the provisions of section 438 Cr.P.C. In fact it is the respondent s stand that the petition is not maintainable since the petitioner has no locus standi to seek quashing of an ECIR or the prosecution complaint in which he is not an accused. The respondent has also said that there is an alternate, efficacious remedy available to the petitioner, by way of an application seeking anticipatory bail under section 438 Cr.P.C., which remedy he would be entitled to seek at the appropriate stage. This court does not deem it necessary to entertain the present writ petition seeking quashing of the impugned ECIR, since the petition is premature - Once this court has held that an application seeking anticipatory bail is maintainable notwithstanding that the petitioner is not named as an accused in the ECIR or in the prosecution complaint, this court cannot delve into whether the concerned court before whom the application under section 438 Cr.P.C. is filed would, or would not, grant relief to the petitioner. Petition dismissed.

Summary

Issues Involved:

1. Maintainability of the writ petition.
2. Prematurity of the petition.
3. Legal perspective on quashing of summons under Section 50 of PMLA.
4. Availability of anticipatory bail under Section 438 Cr.P.C.
5. Petitioner's apprehension of arrest.

Summary:

1. Maintainability of the Writ Petition:
The court examined whether the writ petition seeking quashing of the ECIR and summons issued under Section 50 of PMLA was maintainable. The respondents opposed the maintainability, arguing that the petition was premature and that a writ petition seeking stay or quashing of summons is not maintainable. The court referred to several judicial precedents, including Union of India vs. Kunisetty Satyanarayana and Special Director vs. Mohd. Ghulam Ghouse, which establish that writ jurisdiction should not be exercised to quash a show-cause notice unless it is issued without jurisdiction.

2. Prematurity of the Petition:
The court found that the petition was premature as the petitioner was not named as an accused in the ECIR or the prosecution complaint. The court emphasized that quashing of an FIR or ECIR must be based on the contents of the document itself, which was not available in this case. The court also noted that the petitioner had been issued summons on four prior occasions without being arrested.

3. Legal Perspective on Quashing of Summons under Section 50 of PMLA:
The court discussed the legal framework of Section 50 of PMLA, which empowers the ED to summon any person for evidence or document production. The court clarified that the power to arrest is not included in Section 50 but is provided under Section 19 of PMLA. The court held that the exercise of powers under Section 50 cannot be restrained based on the apprehension of arrest under Section 19.

4. Availability of Anticipatory Bail under Section 438 Cr.P.C.:
The court examined the availability of anticipatory bail under Section 438 Cr.P.C. in the context of PMLA. Referring to the decisions in Gurbaksh Singh Sibbia vs. State of Punjab and Sushila Aggarwal vs. State (NCT of Delhi), the court held that anticipatory bail is available even if no FIR is registered. The court stated that Section 438 Cr.P.C. does not require a formal accusation and can be invoked based on a reasonable apprehension of arrest.

5. Petitioner's Apprehension of Arrest:
The court acknowledged the petitioner's apprehension of being unlawfully arrested but stated that the power of arrest under Section 19 of PMLA is not untrammeled and is subject to specific conditions. The court emphasized that the petitioner has the remedy of applying for anticipatory bail under Section 438 Cr.P.C., which is an efficacious alternative.

Conclusion:
The court dismissed the writ petition as premature, stating that the petitioner has an alternative remedy under Section 438 Cr.P.C. The court clarified that the High Court's jurisdiction under Article 226 of the Constitution is not per se barred but should not be invoked prematurely. The petition and pending applications were accordingly dismissed.