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TMI Blog2024 (7) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... e Special Court, or court of judicial/metropolitan magistrate having jurisdiction. The exercise of the power to arrest is not exempt from the scrutiny of courts. The power of judicial review remains both before and after the filing of criminal proceedings/prosecution complaint. It cannot be said that the courts would exceed their power, when they examine the validity of arrest under Section 19(1) of the PML Act, once the accused is produced in court in terms of Section 19(3) of the PML Act. Power to arrest under Section 19(1) is not for the purpose of investigation. Arrest can and should wait, and the power in terms of Section 19(1) of the PML Act can be exercised only when the material with the designated officer enables them to form an opinion, by recording reasons in writing that the arrestee is guilty. Section 45 of the PML Act does not stipulate the stage when the accused may move an application for bail. A bail application can be submitted at any stage, either before or after the complaint is filed. Whether the charge is framed or evidence is recorded or not recorded, is immaterial. Clearly, the fact that the prosecution complaint has not been filed, the charge has not been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid questions. The questions framed above, if required, can be reformulated, substituted and added to. X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by CBI. The offences under the RC are the predicate offence for investigation/inquiry into the scheduled offences under the PML Act. On 26.11.2022, the DoE filed the first prosecution complaint. On 20.12.2022, the Special Court took cognisance. Since then, the DoE has filed seven supplementary prosecution complaints. In the last complaint, that is, the Seventh Supplementary Prosecution Complaint dated 17.05.2024, Arvind Kejriwal has been named as an accused. 6. On 30.10.2023, Arvind Kejriwal was issued notice under Section 50 of the PML Act for his appearance and recording of statement. Thereafter, eight summons were issued till his arrest on 21.03.2024. DoE states that Arvind Kejriwal failed to appear and join the investigation. Arvind Kejriwal claims that the summons and notices under Section 50 were illegal, bad in law and invalid. We are not directly examining the question of validity of the summons and notices, though the effect and failure to appear is one of the aspects which will be noticed subsequently. 7. The cardinal ground taken in the present appeal is that Arvind Kejriwal was arrested in violation of Section 19(1) of the PML Act. It is contended that the arrest w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to believe", and "guilty of the offence". Before that, we will refer to some judgments of this Court on the importance of Section 19(1) and the effect on the legality of the arrest upon failure to comply with the statutory requirements. 10. In Pankaj Bansal v. Union of India and others, 2023 SCC Online SC 1244 interpreting Section 19 of the PML Act with reference to Article 22(1) of the Constitution of India, "22. Protection against arrest and detention in certain cases.--(1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice." this Court has observed: "32. In this regard, we may note that Article 22(1) of the Constitution provides, inter alia, 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. This being the fundamental right guaranteed to the arrested person, the mode of conveying information of the grounds of arrest must necessarily be meaningful so as to serve the intended purpose. It may be noted that Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIR are filed. Whether a copy of the ECIR must be supplied to an accused has been examined in Vijay Madanlal Choudhary (supra) which has been referred to subsequently. The ECIR is not a public document. Thus, to introduce checks and balances, Section 19(1) imposes safeguards to protect the rights and liberty of the arrestee. This is in compliance with the mandate of Article 22(1) of the Constitution of India. 12. V. Senthil Balaji v. State and others (2024) 3 SCC 51 similarly states that the designated officer can only arrest once they record "reasons to believe" in writing, that the person being arrested is guilty of the offence punishable under the PML Act. It is mandatory to record the "reasons to believe" to arrive at the opinion that the arrestee is guilty of the offence, and to furnish the reasons to the arrestee. This ensures an element of fairness and accountability. 13. The decision in V. Senthil Balaji (supra) has also examined the interplay between Section 19 of the PML Act and Section 167 of the Code. The magistrate is expected to do a balancing act as the investigation is to be concluded within 24 hours as a matter of rule. Therefore, the investigating agency has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cient to validate the person's arrest. Thus, notwithstanding the order of remand, the issue whether the arrest of the person is lawful at its inception, is open for consideration and must be answered. 16. Recently, in Prabir Purkayastha v. State (NCT of Delhi), 2024 SCC OnLine SC 934 this Court reiterated the aforesaid principles expounded in Pankaj Bansal (supra). The said principles were applied to the pari materia provisions Sections 43A, 43B and 43C of the UAPA of the Unlawful Activities (Prevention) Act, 1967. The Court explained that Section 19(1) of the PML Act is meant to serve a higher purpose, and also to enforce the mandate of Article 22(1) of the Constitution. The right to life and personal liberty is sacrosanct, a fundamental right guaranteed under Article 21 and protected by Articles 20 and 22 of the Constitution. Reference was made to the observations of this Court in Roy V.D. v. State of Kerala (2000) 8 SCC 590 that the right to be informed about the grounds of arrest flows from Article 22(1) of the Constitution and any infringement of this fundamental right vitiates the process of arrest and remand. The fact that the chargesheet has been filed in the matter would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of this sub-section, record the reasons in writing for not making the arrest. (ba) against whom credible information has been received that he has committed a cognizable offence punishable with imprisonment for a term which may extend to more than seven years whether with or without fine or with death sentence and the police officer has reason to believe on the basis of that information that such person has committed the said offence; (c) who has been proclaimed as an offender either under this Code or by order of the State Government; or (d) in whose possession anything is found which may reasonably be suspected to be stolen property and who may reasonably be suspected of having committed an offence with reference to such thing; or (e) who obstructs a police officer while in the execution of his duty, or who has escaped, or attempts to escape, from lawful custody; or (f) who is reasonably suspected of being a deserter from any of the Armed Forces of the Union; or (g) who has been concerned in, or against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists, of his having been concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore a Magistrate without unnecessary delay. 38. The law thus, on the one hand, allows a Customs Officer to exercise power to arrest a person who has committed certain offences, and on the other hand, takes due care to ensure individual freedom and liberty by laying down norms and providing safeguards so that the power of arrest is not abused or misused by the authorities. It is keeping in view these considerations that we have to decide correctness or otherwise of the directions issued by a Single Judge of the High Court. "Blanket" order of bail may amount to or result in an invitation to commit an offence or a passport to carry on criminal activities or to afford a shield against any and all types of illegal operations, which, in our judgment, can never be allowed in a society governed by the rule of law." 18. Vijay Madanlal Choudhary (supra) affirms the aforesaid ratio, and states that the safeguards provided as preconditions in Section 19(1) of the PML Act have to be fulfilled by the designated officer before affecting arrest. The safeguards are of a higher standard. They ensure that the designated officer does not act arbitrarily, and is made accountable for their jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le or arbitrary and, therefore, unconstitutional merely because the authority vested with the power may abuse his authority. (Also see Manzoor Ali Khan (supra)." We respectfully agree with the ratio of the decisions in Pankaj Bansal (supra) and Prabir Purkayastha (supra), which enrich and strengthen the view taken in Vijay Madanlal Choudhary (supra), on the interpretation of Section 19 of the PML Act. Power to arrest a person without a warrant from the court and without instituting a criminal case is a drastic and extreme power. Therefore, the legislature has prescribed safeguards in the form of exacting conditions as to how and when the power is exercisable. The conditions are salutary and serve as a check against the exercise of an otherwise harsh and pernicious power. 19. Given that the legislature has prescribed preconditions to prevent abuse and unauthorised use of statutory power, the wielding of such power by an authorized person or authority cannot be conclusive. The exercise of the power and satisfaction of the conditions must and should be put to judicial scrutiny and examination, if the arrestee specifically challenges their arrest. If we do not hold so, then the rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elieve", and the "grounds of arrest", the latter is mandated to be furnished to the arrestee, but the former is an internal and confidential document, the furnishing of which may be detrimental to investigation. Therefore, it is urged that "reasons to believe" need not be supplied to the arrestee. Paragraphs 178 and 179 of Vijay Madanlal Choudhary (supra) read: "178. 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 proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ordinary offence is able to apply for anticipatory bail or regular bail, in which proceeding, the police papers are normally 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 moneylaundering 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." 23. The paragraphs in Vijay Madanlal Choudhary (supra), while recording that there is a difference between ECIR and FIR, hold that the ECIR need not to be furnished to the accused, unlike an FIR recorded under Section 154 of the Code. The PML Act, a special legislation for the offence of money laundering, creates a unique mechanism for inquiry/investigation into the offence. An ana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the submission made on behalf of the DoE, as recorded in Vijay Madanlal Choudhary (supra). Specific reliance was placed on a Canadian judgment in the case of Gifford v. Kelson (1943) 51 Man. R 120. The relevant paragraphs in Vijay Madanlal Choudhary (supra) read: "16(liii). …Secondly, there must be material in possession with the Authority before the power of arrest can be exercised as opposed to the Cr. P. C. which gives the power of arrest to any police officer and the officer can arrest any person merely on the basis of a complaint, credible information or reasonable suspicion against such person. Thirdly, there should be reason to believe that the person being arrested is guilty of the offence punishable under the PMLA in contrast to the provision in Cr. P. C., which mainly requires reasonable apprehension/suspicion of commission of offence. Also, such "reasons to believe" must be reduced in writing. Fifthly, as per the constitutional mandate of article 22(1), the person arrested is required to be informed of the grounds of his arrest. It is submitted that the argument of the other side that the accused or arrested persons are not even informed of the case agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower degree of satisfaction, and does not amount to belief. Belief is beyond speculation or doubt, and the threshold of belief "conveys conviction founded on evidence regarding existence of a fact or doing of an act". Given that the power of arrest is drastic and violates Article 21 of the Constitution, we must give meaningful, true and full play to the legislative intent. We would subsequently examine the expressions "reason to believe", "guilty of an offence punishable under this Act" and "material" in some detail. 28. Providing the written "grounds of arrest", though a must, does not in itself satisfy the compliance requirement. The authorized officer's genuine belief and reasoning based on the evidence that establishes the arrestee's guilt is also the legal necessity. As the "reasons to believe" are accorded by the authorised officer, the onus to establish satisfaction of the said condition will be on the DoE and not on the arrestee. 29. On the necessity to satisfy the preconditions mentioned in Section 19(1) of the PML Act, we have quoted from the judgment of this Court in Padam Narain Aggarwal (supra) and also referred to and quoted from the Canadian judgment in Gifford (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt held that "if there are in fact some reasonable grounds for the Income Tax Officer to believe that there had been any nondisclosure as regards any fact, which could have a material bearing on the question of under-assessment, that would be sufficient to give jurisdiction to the Income Tax Officer to issue notice under Section 34." The Court in terms held that whether these grounds are adequate or not is not a matter for the court to investigate. 10. The expression "reason to believe" is not synonymous with subjective satisfaction of the Officer. The belief must be held in good faith; it cannot merely be a pretence. In the same case, it was held that it is open to the court to examine the question whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section. To this limited extent the action of the Income Tax Officer in starting proceedings under Section 34 is open to challenge in a court of law. (See Calcutta Discount Co. Ltd. v. ITO). In R.S. Seth Gopikrishan Agarwal v. R.N. Sen, Assistant Collector of Customs this Court repelled the challenge to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als Ltd. and another v. Company Law Board and others AIR 1967 SC 295, the Constitution Bench of this Court had referred to and quoted from the decision of the Privy Council in Nakkuda Ali v. Jayaratne 1951 AC 66, wherein Lord Radcliffe had observed: "After all words such as these are commonly found when a legislature or law making authority confers powers on a minister or official. However read, they must be intended to serve in some sense as a condition limiting the exercise of an otherwise arbitrary power. But if the question whether the condition has been satisfied is to be conclusively decided by the man who wields the power the value of the intended restraint is in effect nothing. No doubt he must not exercise the power in bad faith; but the field in which this kind of question arises is such that the reservation for the case of bad faith is hardly more than a formality." While agreeing with the first part of the aforesaid quotation, the Constitution Bench went on to refer to Joseph Kuruvilla Vellukunnel v. Reserve Bank of India and others AIR 1962 SC 1371, wherein Hidayatullah, J., speaking for the majority, had observed: "It is enough to say that the Reserve Bank in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation of the belief which must have a rational connection with or an element bearing on the formation of belief. The reason should not be extraneous or irrelevant for the purpose of the provision. 35. As explained in A.S. Krishnan and others v. State of Kerala (2004) 11 SCC 576, Section 26 of the IPC in substance means that the person must have "reason to believe" if the circumstances are such that a reasonable man would, by probable reasoning, conclude or infer regarding the nature of things concerned. Such circumstances need not necessarily be capable of absolute conviction or inference; but it is sufficient if the circumstances are such that it creates a chain of probable reasoning leading to the conclusion or inference about the nature of the thing. Wednesbury unreasonableness strikes at irrationality when a decision is so outrageous in its defiance of logic or of accepted standards that no sensible person who had applied his mind to the question to be decided would have arrived at it. See Council of Civil Services Union v. Minister of State for Civil Services, (1984) 3 All. ER 935. 36. Once we hold that the accused is entitled to challenge his arrest under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r make disclosures to the accused when it is inexpedient in public interest. In such an event, the police officer is to indicate the specific part of the statement and append a note requesting the magistrate to exclude that part from the copy given to the accused. He has to state the reasons for making such request. The same principle will apply. 39. We now turn to the scope and ambit of judicial review to be exercised by the court. Judicial review does not amount to a mini-trial or a merit review. The exercise is confined to ascertain whether the "reasons to believe" are based upon material which 'establish' that the arrestee is guilty of an offence under the PML Act. The exercise is to ensure that the DoE has acted in accordance with the law. The courts scrutinize the validity of the arrest in exercise of power of judicial review. If adequate and due care is taken by the DoE to ensure that the "reasons to believe" justify the arrest in terms of Section 19(1) of the PML Act, the exercise of power of judicial review would not be a cause of concern. Doubts will only arise when the reasons recorded by the authority are not clear and lucid, and therefore a deeper and in-depth scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opriate to impose strict and stringent conditions that act as a safeguard. The same reasoning will apply to the contention raised by the DoE relying upon the provisions of Section 437 of the Code and the judgment of this Court in Gurcharan Singh and others v. State (Delhi Administration). (1978) 1 SCC 118 Section 437 of the Code applies when an accused suspected of committing a non-bailable offence is arrested or detained without warrant by a police officer in charge of a police station or is brought before a court, other than the High Court or the Court of Sessions. It is observed that the accused would be released on bail, except for in cases specified in clauses (i) and (ii) of Section 437(1) of the Code. Section 437(1)(i) applies at the stage of initial investigation where a person has been arrested for an offence punishable with death or imprisonment for life. Section 437(1)(ii) imposes certain fetters on the power of granting bail in specified cases when the offence is cognizable and the accused has been previously convicted with death, imprisonment for life, or 7 years or more, or has previously been convicted on two or more occasions for nonbailable and cognizable offences. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge, respectively. Section 227 uses the words - 'sufficient grounds for proceeding against the accused'. Section 228 uses - 'grounds of presuming that the accused has committed an offence'. Thus, DoE contends that grave suspicion is sufficient to frame a charge and put the accused to trial. This contention should not be accepted, since we are not dealing with the trial, framing of charge or recording the evidence. The issue before us, which has to be examined and answered, is whether the arrest of the person during the course of investigation complies with the law. The language of Section 19(1) is clear, and should not be disregarded to defeat the legislative intent - to provide stringent safeguards against pre-trial arrest during pending investigations. Framing of the charge and putting the accused on trial cannot be equated with the power to arrest. A person may face the charge and trial even when he is on bail. Notably, Section 439 of the Code does not impose statutory restrictions, except under Section 437(3) when applicable, on the court's power to grant bail. However, Section 45 of the PML Act prescribes specific fetters in addition to the stipulations under the Code. 43. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfilment of conditions under section 19 and subject to the conditions enshrined under this section." 44. In our opinion, the key distinction between Section 19(1) and Section 45 is the authority undertaking the exercise, in each case. Under Section 19(1), it is the designated/authorised officer who records in writing, their "reasons to believe" that the arrestee is 'guilty' of an offence under the PML Act. Thus, the arrest is based on the opinion of such officer, which opinion is open to judicial review, however not merits review, in terms of the well-settled principles of law. Contrastingly, under Section 45, it is the Special Court which undertakes the exercise. The Special Court independently examines pleas and contentions of both the accused and the DoE, and arrives at an objective opinion. The Special Court is not bound by the opinion of the designated/authorised officer recorded in the "reasons to believe". A court's opinion is different and cannot be equated to an officer's opinion. While the Special Court's opinion is determinative, and is only subject to appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby" This Court in Vijay Madanlal Choudhary (supra) had agreed with the aforesaid observations. 46. Two more legal aspects need to be addressed. Section 45 of the PML Act does not stipulate the stage when the accused may move an application for bail. A bail application can be submitted at any stage, either before or after the complaint is filed. Whether the charge is framed or evidence is recorded or not recorded, is immaterial. Clearly, the fact that the prosecution complaint has not been filed, the charge has not been framed, or evidence is either not recorded or partly recorded, will not prevent the court from examining the application for bail within the parameters of Section 45 of the PML Act. As the issue would relate to grant or denial of bail, the parameters or the stipulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds of arrest are to be found at pages 35 to 62 of the same compilation. 48. We would briefly refer to the contents of the "reasons to believe": • CBI has registered an RC regarding framing and implementation of the excise policy by the Govt. of NCT of Delhi for the year 2021-22 with the intent to procure undue favours from the licensee post the tender. Contents of the FIR have been elaborated. • DoE has registered an ECIR on the basis of the aforesaid predicate offence. Upon investigation by the DoE, several searches have been conducted and statements have been recorded. • Salient features of the excise policy that establish criminality are: o The wholesale entity should not be a manufacturer/winery/ brewery/bottler of liquor in India or abroad either directly or through any sister entities; The manufacturer/winery/brewery/bottler of liquor has to choose a distributor holding wholesale license for supply of Indian and foreign liquor as an exclusive distributor; The wholesale licensee shall not directly or indirectly have any retail wings. The retail license holder shall not be a manufacturer/winery/brewery/bottler of liquor in India or abroad either di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to his demands. Vijay Nair was staying in the official residence allotted to Kailash Gehlot, a cabinet minister and a close associate of Arvind Kejriwal. • Vijay Nair on behalf of Arvind Kejriwal and AA Party had received kickbacks to the tune of Rs.100 crores from the group/cartel who had been favoured. • The permanent members of the liquor group/cartel were Magunta Srinivasulu Reddy, Raghav Magunta, and K. Kavitha. The group/cartel was also represented by Abhishek Boinpally, Arun Pillai and Butchi Babu. • P. Sarath Reddy in his statement dated 25.04.2023 under Section 50 of the PML Act had revealed having expressed his desire to meet top political leaders in Delhi, that is, Arvind Kejriwal and Manish Sisodia, through Arun Pillai. Arun Pillai had assured him and had coordinated with Vijay Nair. Later on he met Arvind Kejriwal in a brief meeting of 10 minutes or so in which Vijay Nair was also present. He was told by Arvind Kejriwal to trust Vijay Nair who was very smart and could handle big and small issues. Arvind Kejriwal spoke about the new liquor policy which would be a win-win for all. • On Arvind Kejriwal's role of demanding kickbacks, reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd had also engaged several vendors for campaign of AA Party to whom part cash payments were paid. These are proven through various statements by employees of vendors, CDR records and data seized by the Income Tax department. • Use of cash in Goa elections is also corroborated by one of the candidates of AA Party. • Arvind Kejriwal is guilty as an individual, being a part of the conspiracy in the formulation of the excise policy, and, also vicariously as the person in-charge and responsible for AA Party. Reference is made to Section 70 of the PML Act relating to offences by 'companies'. Arvind Kejriwal, as National Convenor of AA Party and member of the Political Affairs Committee and National Executive, is ultimately responsible for the funds being used in the election expenses, including its generation. Thus, he is both individually and vicariously liable for generation and utilisation of the proceeds of crime. • Lastly, Arvind Kejriwal was afforded multiple opportunities to cooperate with the investigation. In spite of summons being issued to him on nine occasions, he wilfully disobeyed them by not appearing. 49. If we go by the narration of facts and asser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court wherein he cited health issues and claimed that he is sick and infirm. The High Court granted him regular bail as it was not objected to by the DoE. On 29.05.2024, P. Sarath Chandra Reddy was granted pardon. • Magunta Srinivasulu Reddy in his statement recorded on 16.09.2022 did not implicate Arvind Kejriwal. In his statement recorded on 24.03.2023, on being asked whether he had met Arvind Kejriwal in the context of Delhi liquor business, Magunta Srinivasulu Reddy had stated that he had met Arvind Kejriwal in his office in 2021 to discuss whether the trust of Magunta family could be given land in Delhi for their charitable trust. The meeting had lasted for 5-6 minutes. Thus, he had not spoken about the Delhi liquor business. • Raghav Magunta, son of Magunta Srinivasuly Reddy, was arrested on 11.02.2023. Raghav Magunta in his first statement recorded before his arrest on 16.09.2022 and 5 statements recorded between 10.02.2023 and 17.02.2023 did not implicate or make any assertion against Arvind Kejriwal. Regular bail application filed by Raghav Magunta was dismissed by the Special Judge on 20.04.2023. Raghav Magunta's wife attempted suicide on 01.05.2023 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he co-accused relied upon, cannot in terms of Section 30 of the Evidence Act, be the starting point for ascertainment of the guilt of the accused. The statements made earlier in point of time which do not implicate Arvind Kejriwal have been ignored. The statements are also contradictory. Factually, no incriminating document involving Arvind Kejriwal has been recovered during the course of investigation, which commenced in August 2022. The statements also do not establish involvement of Arvind Kejriwal in activities related to commission of a predicate offence as well as act of concealment, possession, acquisition or utilisation of proceeds of crime, which are penal offences under Section 3 of the PML Act. • The statements of persons stated to be engaged with Angadiyas in Mumbai do not in any way implicate and link Arvind Kejriwal to the crime. The statements are not of such sterling quality as to justify arrest of the Chief Minister, who is a prominent leader of a national political party and an opposition leader. There is no documentary proof to show that AA Party has received kickback from the funds received from the cartel, let alone utilising them in the Goa election cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their additional note filed before us has referred to certain retrieved WhatsApp chats which, as per the allegation made, show that Arvind Kejriwal was known to Vinod Chauhan, who was involved in the hawala transfer of money through Angadiyas from Mumbai to Goa. These chats were retrieved after the arrest of Arvind Kejriwal and is not mentioned in the "reasons to believe". Thus, it cannot be examined by us to determine the validity of the arrest in terms of Section 19(1) of the PML Act. 55. The legality of the "reasons to believe" have to be examined based on what is mentioned and recorded therein and the material on record. However, the officer acting under Section 19(1) of the PML Act cannot ignore or not consider the material which exonerates the arrestee. Any such non-consideration would lead to difficult and unacceptable results. First, it would negate the legislative intent which imposes stringent conditions. As a general rule of interpretation, penal provisions must be interpreted strictly. 49 See Vijay Madanlal Choudhary (supra) at paragraph 31 - "The 'proceeds of crime' being the core of the ingredients constituting the offence of money-laundering, that expression nee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation imposed by Section 19(1) of the PML Act before passing an order of arrest. We are of the opinion that it would be incongruous to argue that the high ranking officer should not objectively consider all material, including exculpatory material. 58. A wrong application of law or arbitrary exercise of duty leads to illegality in the process. The court can exercise their judicial review to strike down such a decision. This would not amount to judicial overreach or interference with the investigation, as has been argued by the DoE. The court only ensures that the enforcement of law is in accordance with the statute and the Constitution. An adverse decision would only help in ensuring better compliance with the statute and the principles of the Constitution. 59. Having said so, we accept that a question would arise - does judicial review mean a detailed merits review? We have already referred to the contours of judicial review expounded in Padam Narain Aggarwal (supra), and Dr. Pratap Singh (supra). We have also referred to the principles of Wednesbury reasonableness. See supra note 33 60. In Amarendra Kumar Pandey v. Union of India and others, (2022) SCC Online SC 881 this Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tamrao Shivdas Jankhar v. Ranjitsinh Vijaysinh Mohite Patil, (2009) 13 SCC 131 elaborating on the expression "decision making process", this Court held that judicial interference is warranted when there is no proper application of mind on the requirements of law. An error in the decision making process crops up where the authority fails to consider a relevant factor and considers irrelevant factors to decide the issue. 63. In the present case, as noticed above, the "reasons to believe" have recorded several facts and grounds. One of the grounds for arrest relates to the formulation of the excise policy with the intent to obtain kickbacks/bribes. What has been discussed above in the arguments raised by Arvind Kejriwal relates to corruption amounting Rs.45 crores to facilitate Goa elections for the AA Party. However, the "reasons to believe" also refer to the policy itself and that it was vitiated on the ground of criminality, viz. to promote cartelization and benefit from those providing bribes or kickbacks. We have briefly referred to the terms of the excise policy, albeit for clarity we would like to reproduce the findings recorded in the case of Manish Sisodia v. Central Bureau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit could have been passed on to the consumers in form of lower MRP. Contrary to the claim that the policy was meant to benefit the public or the exchequer, it was rather a conspiracy to ensure massive illegal gains to a select few private players/individuals/entities." 23. The charge-sheet under the PoC Act includes offences for unlawful gains to a private person at the expense of the public exchequer. Reference in this regard is made to the provisions of Sections 7, 7A, 8 and 12 of the PoC Act. 24. Clauses (a) and (b) to Section 7 of the PoC Act apply : (a) when a public servant obtains, accepts or intends to obtain from another person undue advantage with the intent to perform or fail to improperly or to forbear or cause forbearance to cause by himself or by another person; (b) obtains or accepts or attempts to obtain undue advantage from a person as a reward or dishonest performance of a public duty or forbearance to perform such duty, either by himself or by another public servant. Explanation (2) construes the words and expression, "obtains, accepts or attempts to obtain", as to cover cases where a public servant obtains, accepts or intends to obtain any undue advanta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturers. This facilitated getting kickbacks or bribes from the wholesale distributors having substantial market share and turnover. • The licence fee payable by the wholesale distributor was a fixed amount of Rs. 5,00,00,000/- (rupees five crores only). It was not dependant on the turnover. The new policy facilitated big wholesale distributors, whose outpour towards the licence fee was fixed. • The policy favoured and promoted cartelisation. Large wholesale distributors with high market share because of extraneous reasons and kickbacks, were ensured to earn exorbitant profits. • Mahadev Liquor, who was a wholesale distributor for 14 small manufacturers, having 20% market share, was forced to surrender the wholesale distributorship licence. • Indo Spirit, the firm in which the liquor group had interest, was granted whole distributor licence, in spite of complaints of cartelisation etc. which were overlooked. The complainant was forced to take back his complaint. • The excess amount of 7% commission/fee earned by the wholesale distributors of Rs. 338,00,00,000/- (rupees three hundred thirty eight crores only) constitute an offence as defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application, pleas and arguments of Arvind Kejriwal and the DoE, including the material that can be relied on and the inferences possible shall be examined. The court will have to undertake the balancing exercise. 67. It has been strenuously urged on behalf of Arvind Kejriwal that the arrest would falter on the ground that the "reasons to believe" do not mention and record reasons for "necessity to arrest". The term "necessity to arrest" is not mentioned in Section 19(1) of the PML Act. However, this expression has been given judicial recognition in Arnesh Kumar v. State of Bihar, (2014) 8 SCC 273 which lays down that "necessity to arrest" must be considered by an officer before arresting a person. This Court observed that the officer must ask himself the questions - why arrest?; is it really necessary to arrest?; what purpose would it serve?; and what object would it achieve? 68. This Court in Mohammed Zubair v. State of NCT of Delhi, (2022) SCC OnLine SC 897 has held that power to arrest is not unbridled. The officer must be satisfied that the arrest is necessary. Where the power is exercised without application of mind, and by disregarding the law, it amounts to abuse of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a possibility of influencing the witnesses or accused may abscond. Merely because an arrest can be made because it is lawful does not mandate that arrest must be made. A distinction must be made between the existence of the power to arrest and the justification for exercise of it [Joginder Kumar v. State of U.P., (1994) 4 SCC 260 : 1994 SCC (Cri) 1172] . If arrest is made routine, it can cause incalculable harm to the reputation and self-esteem of a person. If the investigating officer has no reason to believe that the accused will abscond or disobey summons and has, in fact, throughout cooperated with the investigation we fail to appreciate why there should be a compulsion on the officer to arrest the accused." Thus, time and again, courts have emphasised that the power to arrest must be exercised cautiously to prevent severe repercussions on the life and liberty of individuals. Such power must be restricted to necessary instances and must not be exercised routinely or in a cavalier fashion. 71. In Vijay Madanlal Choudhary (supra), a substantive threshold test is not laid down on the 'necessity to arrest'. However, in paragraph 88 of the judgment, the Court has observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parameters to arrest sufficient? Or is the satisfaction of necessity and need to arrest, beyond mere formal parameters, required? We would concede that such review might be conflated with stipulations in Section 41 of the Code which lays down certain conditions for the police to arrest without warrant: Section 41(1)(ii)(a) - preventing a person from committing further offence. Section 41(1)(ii)(b) - proper investigation of the offence. Section 41(1)(ii)(c) - preventing a person from disappearing or tampering with evidence in any manner. Section 41(1)(ii)(d) - preventing the person from making any inducement or threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the court or police. Section 41(1)(ii)(e) - to ensure presence of the person in the Court, whenever required, which without arresting cannot be ensured. However, Section 19(1) of the PML Act does not permit arrest only to conduct investigation. Conditions of Section 19(1) have to be satisfied. Clauses (a), (c), (d) and (e) to Section 41(1)(ii) of the Code, apart from other considerations, may be relevant. 75. In Vijay Madanlal Choudhary (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or equality enshrined under Article 14 of the Constitution cannot be invoked for repeating or multiplying irregularity or illegality. If any advantage or benefit has been wrongly given, another person cannot claim the same advantage as a matter of right on account of the error or mistake. However, this principle may not apply where two or more courses are available to the authorities. The doctrine of need and necessity to arrest possibly accepts the said principle. Section 45 gives primacy to the opinion of the DoE when it comes to grant of bail. DoE should act uniformly, consistent in conduct, confirming one rule for all. 80. One of the developments in the last decade is acceptance of the principle of proportionality, especially when fundamental rights such as right to life and liberty are involved. This Court in Chairman, All India Railway Recruitment Board v. K. Shyam Kumar (2010) 6 SCC 614 referred to a decision of the House of Lords in R v. Secretary of State, (1991) 1 All ER 710 wherein the House of Lords had stressed that when human rights issues are concerned, proportionality is an appropriate standard of review. 81. The proportionality test The test of proportionality c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to refer the following questions of law for consideration by a larger Bench : (a) Whether the "need and necessity to arrest" is a separate ground to challenge the order of arrest passed in terms of Section 19(1) of the PML Act? (b) Whether the "need and necessity to arrest" refers to the satisfaction of formal parameters to arrest and take a person into custody, or it relates to other personal grounds and reasons regarding necessity to arrest a person in the facts and circumstances of the said case? (c) If questions (a) and (b) are answered in the affirmative, what are the parameters and facts that are to be taken into consideration by the court while examining the question of "need and necessity to arrest"? 85. As we are referring the matter to a larger Bench, we have to, despite our findings on "reasons to believe", consider whether interim bail should be granted to Arvind Kejriwal. Given the fact that right to life and liberty is sacrosanct, and Arvind Kejriwal has suffered incarceration of over 90 days, and that the questions referred to above require in-depth consideration by a larger Bench, we direct that Arvind Kejriwal may be released on interim bail in connection ..... 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