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2024 (9) TMI 1602 - HC - Money LaunderingMoney Laundering - proceeds of crime - Legality of petitioner's arrest - illegal mining - HELD THAT - A bare perusal of the grounds of arrest as well as reasons to believe reveals that the entire case of E.D is based on illegal mining by fabricating e-rawana bills. In first eight FIRs, petitioner was not an accused. In 9th FIR also, he has not been named; rather E.D has tried to implicate him on the premise that he is the Director of DSPL, but there is no material to substantiate that petitioner is either the Director of said company; or a person in-charge of the affairs of the company; rather the information obtained from the website of Ministry of Corporate Affairs clearly indicates that petitioner ceased to be the Director of DSPL w.e.f. 07.11.2013. It is specifically observed that E.D has not placed on record any material to the contrary in this regard. Although, E.D tried to justify the arrest on the premise that petitioner is a beneficiary of the syndicate running illegal mining as well as of G.M. Co., but again there is no material to substantiate that petitioner is having any relationship and/or concern as Director, Promoter or share-holder of the so-called G.M. Co. Even, the E.D has failed to show that such a company is in existence and/or registered with the Registrar of Companies; or there is any such legal entity in operation under any law? As on today, prima facie, there is no material with the E.D to substantiate that petitioner has directly or indirectly, indulged in any process or activity connected with the proceeds of crime, in any manner whatsoever and/or projected the same as untainted by any means; hence there was/is no reason to believe; nor any ground of arrest is made out against him on the premise that petitioner is guilty of an offence under the PMLA. The petitioner has not been found involved in any illegal activity, in any manner whatsoever, attracting the offence of money laundering under PMLA - there is no option, except to allow the petition - the petitioner be released forthwith, if not required in any other case - Petition allowed.
Issues Involved:
1. Legality of the petitioner's arrest. 2. Validity of the remand orders. 3. Allegations of political vendetta. 4. Compliance with the provisions of the Prevention of Money Laundering Act (PMLA). 5. Role of the petitioner in the alleged illegal mining activities. 6. Admissibility and sufficiency of evidence against the petitioner. 7. The impact of judicial precedents on the case. Issue-wise Detailed Analysis: 1. Legality of the Petitioner's Arrest: The petitioner filed a petition under Section 482 of the Code of Criminal Procedure, 1973, seeking to declare his arrest illegal, non-est, and against the statutory provisions of the PMLA, Cr.P.C., and the Constitution. The petitioner argued that he was not named in the FIRs that formed the basis of the ECIR and that no specific role was attributed to him in dealing with proceeds of crime. The court observed that the allegations against the petitioner primarily pertained to "illegal mining," which is not a scheduled offense under the PMLA. The court also noted that the petitioner ceased to be a Director of Development Strategies (India) Pvt. Ltd. (DSPL) w.e.f. 07.11.2013, and there was no material to substantiate his involvement in the company's affairs thereafter. 2. Validity of the Remand Orders: The petitioner sought to set aside the remand orders dated 20.07.2024 and 29.07.2024 passed by the Special Court, PMLA, Ambala. The court noted that the remand orders were based on the petitioner's alleged involvement in illegal mining activities. However, the court found that there was no material to substantiate the petitioner's role in these activities or his association with DSPL after 07.11.2013. The court also observed that the NGT's order imposing a penalty on DSPL was stayed by the Supreme Court, subject to the payment of 60% of the penalty amount. Consequently, the court quashed the remand orders. 3. Allegations of Political Vendetta: The petitioner contended that his arrest was politically motivated, aimed at preventing him from contesting the upcoming State Legislative Assembly elections. The court noted that the timing of the arrest coincided with the election period and that the petitioner had been cooperating with the investigation. The court found that the arrest appeared to be an outcome of political vendetta and not based on concrete evidence. 4. Compliance with the Provisions of the PMLA: The court examined whether the arrest and subsequent actions complied with the provisions of Section 19 of the PMLA. The court observed that the grounds of arrest and reasons to believe were not substantiated by concrete evidence. The court emphasized that the satisfaction of the arresting officer should not be based merely on suspicion but on concrete evidence. The court also noted that the petitioner was interrogated for an extended period without any incriminating material being found. 5. Role of the Petitioner in the Alleged Illegal Mining Activities: The court found that the allegations against the petitioner were primarily related to illegal mining activities, which are not scheduled offenses under the PMLA. The court noted that the petitioner ceased to be a Director of DSPL w.e.f. 07.11.2013 and that there was no material to substantiate his involvement in the company's affairs thereafter. The court also observed that the NGT's order imposing a penalty on DSPL was stayed by the Supreme Court, subject to the payment of 60% of the penalty amount. 6. Admissibility and Sufficiency of Evidence Against the Petitioner: The court found that there was no material to substantiate the petitioner's involvement in illegal mining activities or his association with DSPL after 07.11.2013. The court also noted that the allegations of illegal mining were not supported by concrete evidence and that the petitioner had been cooperating with the investigation. The court emphasized that the arrest should be based on concrete evidence and not merely on suspicion. 7. The Impact of Judicial Precedents on the Case: The court referred to various judicial precedents cited by both parties. The court noted that the principles laid down in these precedents emphasized the need for concrete evidence and compliance with the provisions of the PMLA before arresting a person. The court found that the arrest and remand orders in the present case did not comply with these principles and were not supported by concrete evidence. Conclusion: The court allowed the petition, quashing the arrest order, grounds of arrest dated 20.07.2024, and the remand orders dated 20.07.2024 and 29.07.2024. The court directed the immediate release of the petitioner if not required in any other case. The court emphasized that the observations made should not be construed as an expression of opinion on the merits of the complaint filed by the E.D under Section 44 read with Section 45 of the PMLA before the Special Court, Ambala.
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