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TMI Blog2023 (9) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... been held and relied upon by the Hon ble Supreme Court in V. Senthil Balaji [ 2023 (8) TMI 410 - SUPREME COURT] that the decision of a court cannot be read like a statute out of context and in ignorance of the requisite provisions. The question is that whether this meaning as given in Black Laws Dictionary has to be taken literally in the present case. The service of the pleadings in a civil case are entirely different in nature and the law has to be interpreted as a whole and it cannot be taken out of context. In the present case, we are dealing with a situation where the arrestee is accused of a serious offence under PMLA. Any sensitive information disclosed prematurely in such cases may hamper the case of the prosecution/investigating agency. The orders passed by learned Special Judge on 28.06.2023 whereby he found sufficient material on the record and recorded a finding that the investigating agency has complied with the provisions of law while arresting the applicant accused this judgement rather favours the ED. There is no violation of Fundamental Rights of the petitioner. There is nothing or the record to suggest that petitioner has been denied right to consult and defended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r completing all process of due diligence and submission of the term sheet of interim finance within two weeks thereafter before the tribunal after completing all the formalities. In the present petition the petitioner has raised following question of law: a) Whether grounds of arrest need to be orally informed or given in writing? b) Whether the petitioner's fundamental rights have been violated as he has not been informed/served the grounds of his arrest (that are in writing) and thereby also denying him the right to consult and be defended by his legal practitioner? c) Whether the fundamental right of the petitioner guaranteed to him under Art. 21 of the Constitution of India has been violated by depriving him of his life and personal liberty - subjecting him to an illegal arrest by setting the criminal law in motion contrary to the procedure established by law? d) Whether the Petitioner's arrest is contrary to s. 19 of the Prevention of Money Laundering Act, 2002 - thereby violating the Petitioner's fundamental right under Art. 21 read with Art. 14 of the Constitution of India? 5. That the petitioner has submitted in his petition that ED has violated the fundamental ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted is to be informed of the grounds for his arrest before he is actually arrested. 9. The petitioner has also relied upon Madhu Limaye and Ors., 1969(1) SCC 292. The petitioner has submitted that the grounds of arrest that admittedly are in writing and ran into several pages have to be informed to the petitioner in writing and non-furnishing of the same violates the fundamental rights of the petitioner under Art. 20(1) of the Constitution of India. 10. The petitioner has submitted that his fundamental right under Article 21 has also been violated by subjecting him to an illegal arrest by setting the criminal law in motion contrary to the procedure established by law. 11. The petitioner has also challenged the provisional attachment of the properties by the ED. 12. After hearing the parties, thus court was of the view that there are important questions of law which require consideration and thus, notice was issued. 13. In response to this, ED has filed the counter affidavit and submitted that there has been a sufficient compliance with Section 19 of the PMLA and Article 22(1) of Constitution of India. It has been submitted that there were sufficient reasons to believe that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 SCC OnLine SC, Serious Fraud Investigation Office v. Rahul Modi, (2019) 5 SCC 266, State v. H. Nilofer Nisha, (2020) 14 SCC 161. 20. It is submitted that informing grounds of arrest is sufficient compliance with section 19 of the PMLA and there is no legal requirement of supplying a copy of grounds of arrest. It was submitted that in the remand order dated 28.06.2023 which was passed by learned Special Judge specifically noted that there was nothing to suggest from the case file produced by IO that the arrest of the accused has been effected in violation of provision of Section 19 of the PMLA or that the same was otherwise illegal. Learned Special Judge has specifically mentioned that IO has not only recorded the reasons for his belief about accused's being guilty of the offence of money laundering under Section 3 of the PMLA, but the said grounds are also found to have been informed to the accused. The ED has placed reliance upon Moin Akhtar Qureshi vs. UOI 2017 SCC OnLine Del 12108 and Chhagan Chandrakant Bhujbal vs. Union of India 2016 SCC OnLine Bom 9938. 21. It has further been submitted that it is an admitted position that within 24 hours of the arrest, the arrestee was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned provision(s) already dealt with in this judgment. The transferred cases are disposed of accordingly." 24. ED has also relied upon the debates of Constituent Assembly wherein the suggestions to quantify the time-period to inform the grounds of arrest was found to be unnecessary and it was observed by Dr. B.R. Ambedkar that in any case informing such grounds of arrest cannot be later than 24 hours when the grounds for arrest and further custody are required to be informed to the Magistrate itself in the presence of the accused. It is submitted that it is well settled that Constituent Assembly Debates are the best aid for interpreting the provisions of the Constitution a reference has been made to S.R. Chaudhari v. State of Punjab & On. (2001) 7 SCC 126 (para 33) Special Reference No. 1 of 2002, In re (Gujarat Assembly Election matter) (2002) 8 SCC 237. 25. ED has further submitted that that even Article 22(1) provides that "No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest". It is submitted that the petitioner was communicated and made aware of the grounds of his arrest by the ED and the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n handwriting. 31. Reliance has been placed upon Khimji Raja Harijan v. District Magistrate, 1987 SCC OnLine Guj 98, wherein it was held that oral intimation to the members of the household of the order of detention and the place of detention would substantially comply with the directions by the Supreme Court and would not vitiate the order of continued detention. ED has also placed reliance upon Pranab Chatterjee v. State of Bihar, (1970) 3 SCC 926. 32. Moreover, the ED submits that there will be no presumption that the particulars of the offence of the grounds for which the applicant was arrested were not conveyed to him by the person who arrested him, or by police and this fact is to be proved positively by the person who alleges non-compliance with these provisions. Reliance has been placed upon Vimal Kumar Sharma vs. State of U.P. and Ors. MANU/UP/0602/1995, Sher Bahadur Singh and Ors. vs. State of U.P. and Ors. (25.05.1992 - ALLHC) : MANU/UP/0263/1992. 33. It has been submitted by the ED that the only manner in law by which the accused can seek release under PMLA is upon fulfilment of the twin conditions prescribed under section 45 of the PMLA, 2002. It has been submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an individual was concerned and there is no irreconcilable conflict between the two. 40. Dr. Abhishek Manu Singhvi, learned senior counsel submitted that V. Senthil Balaji has in fact aided in the advancement of law taking the law further from Vijay Madanlal Choudhary. Dr. Abhishek Manu Singhvi, learned senior counsel submitted that Vijay Madanlal Choudhary also does not state that grounds of arrests need not be supplied, neither does it say that they be furnished well after arrest. Learned senior counsel submitted that the judgment in Vijay Madanlal Choudhary arose out of batch of matters examining constitutional validity of law and was aimed at clarifying the law, whereas V. Senthil Balaji is more an individual based matter where the law laid down in Vijay Madanlal Choudhary were considered in the particular facts and circumstances of the case. 41. Dr. Abhishek Manu Singhvi, learned senior counsel relied on Vijay Madanlal Choudhary to underline the importance of procedural safeguards and its necessity to ensure fairness, objectivity and accountability. 42. Dr. Singhvi, learned senior counsel referred to Para-322 of Vijay Madanlal Choudhary (Supra) wherein it was inter alia he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 of the 2002 Act, are equally stringent and of higher standard. Those safeguards ensure that the authorised officers do not act arbitrarily, but make them accountable for their judgment about the necessity to arrest any person as being involved in the commission of offence of money-laundering even before filing of the complaint before the Special Court under Section 44(1)(b) of the 2002 Act in that regard. If the action of the authorised officer is found to be vexatious, he can be proceeded with and inflicted with punishment specified under Section 62 of the 2002 Act. The safeguards to be adhered to by the jurisdictional police officer before effecting arrest as stipulated in the 1973 Code, are certainly not comparable. Suffice it to observe that this power has been given to the high-ranking officials with further conditions to ensure that there is objectivity and their own accountability in resorting to arrest of a person even before a formal complaint is filed under Section 44(1)(b) of the 2002 Act. Investing of power in the high-ranking officials in this regard has stood the test of reasonableness in Premium Granites, wherein the Court restated the position that requirement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily of the accused. Learned senior counsel has placed reliance upon V. Senthil Balaji to bolster the submission that officer should supply / serve reasons and non-compliance would vitiate the arrest. 47. Dr. Abhishek Manu Singhvi, learned senior counsel submitted that V. Senthil Balaji is completely in sync with Vijay Madanlal Choudhary and the law laid down has merely been followed and advanced. Learned senior counsel has invited the attention of the court to the rules and has placed reliance upon the Prevention of Money Laundering (the forms and the manner of forwarding a copy of order of arrest of a person along with the material to the adjudicating authority. Hence its period of retention) Rules 2005. Learned senior counsel submitted that Rule 2(g) provides which is as under: g) "material" means any information or material in the possession of the Director or Deputy Director or Assistant Director or any authorised officer, as the case may be, on the basis of which he has recorded reasons under subsection (1) of section 19 of the Act; 48. It has further been submitted that Rule 2(h) provides the definition of order which is as under: h) "order" means the order of arrest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ED is shying away from giving the grounds of arrest to the petitioner. 54. Zoheb Hossain, learned special counsel for the ED submits that there has been sufficient compliance with Section 19 of the PMLA and Article 22(1) of the Indian Constitution. He submits that it was based on 26 FIRs, the Enforcement Directorate initiated an investigation against the Petitioner and M/s Supertech Limited, recording ECIR No. ECIR/ 21/STF/2021 on September 9, 2021. He further submits that throughout the investigation, the ED issued 12 summons under Section 50 PMLA to the Petitioner, spanning from November 17, 2021, to March 29, 2023. The learned Counsel submits that there is substantial evidence on record indicating that the was involved in the offense of money laundering as defined in Section 3 of the PMLA 2002 and that he knowingly participated in activities connected to the proceeds of crime, projecting it as clean property. 55. Mr. Zoheb Hossain has submitted that subsequently, on June 27, 2023, the Petitioner was arrested in accordance with Section 19 of PMLA. The grounds of arrest were provided in writing to the arrestee, Ram Kishor Arora, who, after reading them, affixed his signature on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entertaining the petition and passing the order." 57. That reliance in this regard is also placed on the decision of the Hon'ble Supreme Court in the case of Kanu Sanyal v. Distt. Magistrate, Darjeeling, (1974) 4 SCC 141 (Para 4), State of Maharashtra v. Tasneem Rizwan Siddiquee, (2018) 9 SCC 745 (Para 10), Basanta Chandra Ghose v. King Emperor, 1945 SCC OnLine FC 3, Naranjan Singh Nathawan v. State of Punjab, (1952) 1 SCC 118 : 1952 SCC OnLine SC 4 (Para 10), Talib Hussain v. State of J&K, (1971) 3 SCC 118 at page 121, Col. B. Ramachandra Rao (Dr) v. State of Orissa, (1972) 3 SCC 256, Sanjay Dutt v. State through CBI, Bombay (II), (1994) 5 SCC 410, Bhagwan Singh v. State of Rajasthan, 2005 SCC OnLine Raj 861 : (2006) 1 RLW 790, Saurabh Kumar v. Jailor, Koneila Jail, (2014) 13 SCC 436, State v. H. Nilofer Nisha, (2020) 14 SCC 161. 58. It is submitted that the legislative scheme under the PMLA does not provide for 'supplying a copy' of the grounds of arrest to the arrestee at the time of arrest and that informing the arrestee of the grounds of arrest as required in Section 19 of the PMLA is sufficient compliance of the requirements of Article 22 of the Constitution of India. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Apex court in Vijay Madanlal decided the issue by stating "So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution." Reliance in the regard to show that quantifying the time period to inform the grounds of arrest was found to be unnecessary is also placed on the Constituent Assembly Debates and S.R. Chaudhari v. State of Punjab & Ors. (2001) 7 SCC 126 (para 33) Special Reference No. 1 of 2002, In re (Gujarat Assembly Election matter), (2002) 8 SCC 237 (para 15 , 16 ,18), Madhu Limaye, (1969) 1 SCC 292, Viscount Simon in Christie v. Leachinsky, (1947) 1 All ER 567. (Para 11, at p.1144 of Cri LJ), State of Punjab v. Baldev Singh, (1999) 6 SCC 172. 62. The learned special counsel for the ED further submitted that the reliance placed on V. Senthil Balaji v. State, 2023 SCC OnLine SC 934 by the petitioner is absolutely misplaced as the same procedure was followed in the case of V. Senthil Balaji, at the time of arrest, which the Hon'ble Supreme Court did not find any fault. Reliance in this regard is placed on Khimji Raja Harijan v. District Magistrate, 1987 SCC OnLine Guj 98, Pranab Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. (2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a 1[Special Court or] Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eve, which are recorded in writing, that any person has been guilty of an offence. b. If the officer proceeds to arrest; the grounds for such arrest shall be informed to him, "as soon as may be". 69. Section 19(2) re-emphasizes that the material in his possession as defined under Section 2(g) has to be referred to the adjudicating authority. 70. Rule 3 of the 2005 rules also provides an additional safeguard in the form of the arresting officer having to prepare an index of the copy of the order (which has been defined under Section 2(h) so as to include grounds for such arrest under Section 19(1) and the material as defined under Rule 2(g)), and sign each page of such index of the copy of the order. 71. Rule(7) also provides that the arresting officer shall maintain register and other records such as Acknowledgement Register, Daak Register and shall ensure that necessaries entries are made in made in the register immediately as soon as the copy of the order and the material are forwarded to the adjudicating authority. Thus, if Section 19 and Rule 2(g) and Rule 2(h) and rule 3(1) and Rule 7 are taken together, it can be construed that the legislature has provided enough safeguar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it is not necessary that copy of such grounds of arrest have to be served to the arrestee contemporaneously at the time of the arrest. In this regard, the Hon'ble Supreme Court in Vijay Madanlal Choudhary made the following observation: "458. The next issue is: whether it is necessary to furnish copy of ECIR to the person concerned apprehending arrest or at least after his arrest? Section 19(1) of the 2002 Act postulates that after arrest, as soon as may be, the person should be informed about the grounds for such arrest. This stipulation is compliant with the mandate of Article 22 (1) of the Constitution. Being a special legislation and considering the complexity of the inquiry/investigation both for the purposes of initiating civil action as well as prosecution, non-supply of ECIR in a given case cannot be faulted. The ECIR may contain details of the material in possession of the Authority and recording satisfaction of reason to believe that the person is guilty of money-laundering offence, if revealed before the inquiry/investigation required to proceed against the property being proceeds of crime including to the person involved in the process or activity connected therewit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused by the concerned Court. On the same analogy, the argument of prejudice pressed into service by the petitioners for non-supply of ECIR deserves to be answered against the petitioners. For, the arrested person for offence of money-laundering is contemporaneously informed about the grounds of his arrest; and when produced before the Special Court, it is open to the Special Court to call upon the representative of ED to produce relevant record concerning the case of the accused before him and look into the same for answering the need for his continued detention. Taking any view of the matter, therefore, the argument under consideration does not take the matter any further." 75. The reading of Para 458 and 459 which has been relied upon by both the parties makes it clear that the Apex Court in Vijay Madanlal Choudhary inter alia held that so long as the person has been informed about the grounds of his arrest, it is sufficient compliance of the mandate of Article 22(1) of the Constitution. It has also been inter alia held that it is enough if ED at the time of arrest contemporaneously discloses the grounds of such arrest to such person. Thus it cannot be said that the law laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. The following words of Lord Denning in the matter of applying precedents have become locus classicus: "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." "Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it." 76. In this regard, reference can also be made to Goa Real-estate and Construction vs. UOI wherein it was inter alia held as under: "31. It is well settled that an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Apex Court in V. Senthil Balaji, while discussing the provision of PMLA and in particular Section 19, specifically held that an authorised officer has to assess and evaluate the material in his possession and through such material he is expected to form a reason to believe that a person has been guilty of a offence under the PMLA. Thereafter, he is at liberty to arrest by performing his mandatory duty of recording the reasons. It was further inter alia held that the said exercise has to be followed by way of information of the grounds of arrest being served on the arrestee. The Apex Court said that any non-compliance of the Section 19(1) of PMLA would vitiate the arrest itself. The Hon'ble Supreme Court further referred to Section 19(2) PMLA. The law laid down by the Hon'ble Supreme Court is binding on all courts as is provided in Article 141 of the Constitution of India. However, the directions of the court have to be read in the totality. The Apex Court in this case has specifically mentioned that all the requisite mandates of Section 19(1) have to be followed in letter and spirit. 80. Learned counsel for the petitioner has emphasized upon the word "served" in para 39 of V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the remand application under Section 167 CrPC read with Section 65 of the PMLA moved on 26.08.2017. We also agree with the submission of Mr. Mahajan that a writ of habeas corpus does not lie in the facts of the present case, since the petitioner was placed initially in ED custody remand, and thereafter in judicial custody by orders passed by a competent court with due application of mind." 82. It is also necessary to refer to Chhagan Chandrakant Bhujbal vs. UOI 2016 SCC Online Bombay 9338. The Supreme Court in Vijay Madanlal Choudhary has also referred to that has also inter alia held that so long as the person has been informed about the grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution. 83. The ED has also emphasized that the judgment of Vijay Madanlal Choudhary is delivered by a larger bench. The ED has also referred to Sandeep Bafana Vs. State of Maharashtra 2014 wherein it was inter alia held as: "19...A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a co-equal or larger Bench; or if the decision of a High Court is not in consona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the police officer were illegal, it was necessary for the state to establish that at the stage of remand, the magistrate directed detention in jail custody after applying his mind to all relevant matters. 86. I consider that in view of the orders passed by learned Special Judge on 28.06.2023 whereby he found sufficient material on the record and recorded a finding that the investigating agency has complied with the provisions of law while arresting the applicant accused this judgement rather favours the ED. 87. As far as the contention of the learned senior counsel for the petitioner to release the petitioner on interim bail or to release him or to pass an order enabling him to attend the meetings in custody, I consider that such order cannot be passed in the present proceedings, particularly, in view of the fact that the bail application has already been rejected by the learned Special Judge vide a detailed order. 88. It is pertinent to mention here that the petitioner is required to visit Bombay to attend the meetings. I consider that it would be impractical to send the petitioner to Bombay in custody for attending the meetings with the financial creditors. It is pertinent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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