Bombay High Court
Anjali Damania vs Union Of India And Ors on 14 December, 2016
Bench: Ranjit More
Dixit
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO.3931 OF 2016
Chhagan Chandrakant Bhujbal ]
Age - 69 Years, Male, ]
R/at 5th Floor, Militia Apartments, ]
M.P. Road, Mazgaon, Mumbai. ]
[Presently in Bombay Hospital in ]
custody / directed to be lodged at ]
Mumbai Central Prison at Mumbai] ] .... Petitioner
Versus
1. Union of India, ]
Central Government Advocates,
ig ]
Income Tax Building Annexe, ]
New Marine Lines, Mumbai. ]
]
2. Sanjay V. Kinjawadekar ]
[The then Assistant Director, ]
Directorate of Enforcement], ]
Earlier having office at : ]
Enforcement Directorate, ]
4th Floor, Kaiser-I-Hind Building, ]
Currimbhoy Road, Ballard Estate, ]
Mumbai - 400 001. ]
]
3. Directorate of Enforcement, ]
4th Floor, Kaiser-I-Hind Building, ]
Currimbhoy Road, Ballard Estate, ]
Mumbai - 400 001. ]
]
4. State of Maharashtra ] .... Respondents
WITH
CRIMINAL APPLICATION NO. 463 OF 2016
IN
CRIMINAL WRIT PETITION NO.3931 OF 2016
Ms.Anjali Damaniya ]
Occupation : Profession, ]
Address : 5th floor, Vijayshree Durga, ]
6th Road, Santacruz East, ] ... Applicant /
Mumbai - 400 055 ] Intervener
In the matter of :-
Chhagan Chandrakant Bhujbal ] .... Petitioner
Versus
Union of India & Others ] .... Respondents
Appearances :-
Mr. Vikram Chaudhary, Senior Counsel, a/w. Mr. Sujay Kantawala,
Mr.Sajal Yadav i/b. Mr. Shalabh Krishnan Saxena for the Petitioner.
Mr.Neeraj Kishan Kaul, Additional Solicitor General a/w. Mr.Anil C.
Singh, Additional Solicitor General, a/w. Ms.Purnima Kantharia,
Mr.H.S. Venegaonkar, Mr.Samar Kachwala, Mr.Sanyat Lodha,
Ms.Chanan Parwani, Ms.Indrayani Deshmukh and Mr.Yash Momaya
for Respondent Nos.1 to 3 (Enforcement Directorate).
Mr.Satya Prakash Singh, Assistant Legal Adviser, Enforcement
Directorate, Mumbai.
Mr. S.K. Shinde, P.P., a/w. Mr. J.P. Yagnik, A.P.P., for Respondent
No.4-State.
Mr.Yeshwant Shenoy i/b. Mr.G.L. Thonge for the Applicant in APPW
No.463 of 2016.
CORAM: RANJIT MORE &
DR. SHALINI PHANSALKAR-JOSHI, J.J.
RESERVED ON : 5 th December, 2016.
PRONOUNCED ON : 14 th December, 2016.
JUDGMENT : [Per Dr. Shalini Phansalkar-Joshi, J.]
1. Rule.
2. Rule made returnable forthwith.
3. With consent of learned Counsel for the parties, heard finally
at the stage of admission itself.
4. By this Petition, filed under Articles 226 and 227 of the
Constitution of India, (for short, "the Constitution"), the Petitioner is
seeking issuance of Writ of Habeas Corpus or such other appropriate
writ, order or direction for his forthwith release from the custody by
setting aside impugned arrest order dated 14 th March 2016 and the
consequent remand orders, on the count that they are manifestly
improper, illegal, without jurisdiction, null and void ab initio on the
touch-stone of Articles 14, 21 and 22 of the Constitution of India.
5. This relief is claimed by the Petitioner in the conspectus of the
following facts :-
The Petitioner is a citizen of India and the then PWD Minister
in the State of Maharashtra. In a Public Interest Litigation No.23 of
2014 filed by the Aam Aadmi Party and its office bearers, who is
intervener in this petition, the grant of contract for construction of
"New Maharashtra Sadan" at Delhi was questioned, inter alia,
alleging irregularities, lack of transparency and apprehending
transfer of funds indirectly to the Petitioner. In the said Public
Interest Litigation, on 18th December 2014, the Division Bench of this
Court directed constitution of a Special Investigation Team, (for
short, "SIT"), comprising of Director General, Anti-Corruption
Bureau, and Director, Enforcement Directorate, to look into the
allegations made against the Petitioner and his relatives.
Accordingly, the SIT was constituted and on the receipt of the
reports of the SIT from time to time, this Court, vide its order dated
29th April 2015, was pleased to clarify that the Director, Anti-
Corruption Bureau, and the Director, Enforcement Directorate, need
not wait for any orders of the Court before lodging First Information
Report, (for short, "FIR"), if, according to the concerned Agencies, a
case is made out for lodging of FIR against any of the Respondents
(present Petitioner was Respondent No.6 therein) , or, any other
person. This Court also made it clear that law on this subject is quite
clear, as has been laid down by the Hon'ble Supreme Court in the
case of Lalita Kumari Vs. Government of Uttar Pradesh and Ors.,
(2014) 2 SCC 1.
6. Accordingly, FIR No.32 of 2015 dated 8th June 2015 was
registered by the A.C.B., Mumbai, invoking Sections 13(1)(c), 13(1)
(d) and 13(2) of the Prevention of Corruption Act, 1988, (for short,
"PC Act"), and Sections 109, 406, 409,420, 465, 468, 471 and 474
r/w. Sections 34 and 120B of the Indian Penal Code, (for short,
"IPC"). The Petitioner was arraigned, amongst various other
accused, as accused in the said FIR. The investigation in the said FIR
was culminated with issuance of Charge-Sheet No.16 of 2016 filed
before the Special A.C.B. Court at Mumbai. The Petitioner is on bail
in the said case, which was granted at post-cognizance stage.
7. Another FIR No.35 of 2015 dated 11th June 2015 was also
registered by the Anti-Corruption Bureau, Mumbai, (for short,
"ACB"), against the Petitioner, invoking Sections 13(1)(c), 13(1)(d)
and 13(2) of PC Act and Sections 109, 406, 409, 420, 465, 468, 474,
474 and 477A r/w. Sections 34 and 120B of IPC. Petitioner was
arraigned, against amongst various other accused, as accused in the
said FIR also. The investigation into the said FIR was also
culminated with issuance of Charge-Sheet No.10 of 2016 filed before
the Special ACB Court at Mumbai. The Petitioner is on bail even in
the said case, which was granted at post-cognizance stage.
8. It is further case of the Petitioner that, thereafter, on 17 th June
2015, an Enforcement Case Information Report, bearing
No.ECIR/MBZO/07/ 2015, was registered in the office of Respondent
No.2 in Mumbai. However, Sections 154 to 157 of the Code of
Criminal Procedure, 1973, (for short, "the Code"), were not complied
with. The copy of the said ECIR was supplied to the Petitioner along
with the complaint. Another Enforcement Case Information Report,
bearing No.ECIR/MBZO/08/2015, was also registered in respect of
separate FIR No.69 of 2015 dated 13 th June 2015, concerning Taloja
Police Station, New Bombay. The Petitioner is, however, not
arraigned as accused in the said FIR.
9. The grievance of the Petitioner is that, in respect of these
Enforcement Case Information Reports, (for short, "ECIR"), he was
summoned, for the first time, on 14 th March 2016 and, accordingly,
he appeared before Respondent No.2 in his office on the same day, at
about 10:30 hours, to co-operate him in the investigation. However,
the Petitioner had been restrained from moving out of the office,
even for taking lunch, and was, thus, illegally taken in custody by
restraining his movements. It is his further contention that to show
that his arrest was in consonance with Articles 14, 21 and 22 of the
Constitution, in the impugned arrest order dated 14 th March 2016, it
was stated that the arrest of the Petitioner was made at 22:05 hours.
However, no authorization issued by the Central Government in the
name of Respondent No.2 for effecting the arrest of the Petitioner
was shown, nor the written communication of the grounds of arrest
was made available to him.
10. On 15th March 2016, Petitioner was produced before the
Special Court for Prevention of Money-Laundering at Mumbai at
about 16:30 hours i.e. beyond the period of twenty-four hours. The
Special Court, vide its order, was pleased to remand the Petitioner to
the custody of Enforcement Directorate for two days without
satisfying itself by asking the authorization issued by the Central
Government in the name of Respondent No.2 to exercise power of
arrest, nor such authorization was produced before the Special
Court. The Special Court also did not call for the grounds of arrest. It
was not even ascertained as to whether the offence under PML Act
was cognizable or non-cognizable. According to the Petitioner,
Respondent No.2 was erroneously proceeding on the basis that the
alleged offence under PML Act is cognizable. Respondent No.2 also
did not produce any Case Diary, required to be maintained under
Section 172 of the Code and which was required to be produced in
terms of Section 167 of the Code before the Special Court at the time
of seeking remand. The Special Court also did not ask for the same.
The Special Court granted the custody of the Petitioner upto 17 th
March 2016 to the Enforcement Directorate, as sought by
Respondent No.2, for custodial interrogation of the Petitioner.
11. On 17th March 2016, the Petitioner was remanded to Judicial
Custody till 31st March 2016 and thereafter, from time to time, his
Judicial Custody was extended on the remand applications filed by
Respondent No.2. As a result, at present also, Petitioner is in judicial
custody and taking treatment on medical grounds at Bombay
Hospital, as ordered by the Special Court.
12. Meanwhile, on 30th March 2016, a detail Criminal Complaint
No.2 of 2016 was filed against the Petitioner, and fifty-two other
accused, before the Special Court at Mumbai, alleging commission of
offence punishable under Section 3 r/w. Section 4 of PML Act with a
specific allegation that the Petitioner and his family members had
generated huge illicit funds, which were money laundered during the
period from 2006 to till date. The specific allegations against him, as
disclosed in the Criminal Complaint No.2 of 2016 dated 30 th March,
2016, filed against him, by the Assistant Director, Directorate of
Enforcement, Mumbai are to the effect that M/s.K.S. Chamankar
Enterprises secured R.T.O. development project from the
Maharashtra Government by misrepresentation and fraud and in
connivance with the Petitioner and other public servants. The
established norms were bypassed and the project of Maharashtra
Sadan was given to M/s.K.S. Chamankar on a platter in defiance of
rules and regulations prevalent in the matter. The project was
amounting to Rs.4,700 Crores (at the price, then, prevailing in the
year 2006). It was awarded to a contractor having hardly any
experience of undertaking such a huge project, or having any
resources to execute the same. The proceeds derived out of this
criminality were to be shared between the conspirators including
M/s.K.S. Chamankar Enterprises, their partners and their
associates, M/s. Prime Builders and Developers, their partners and
associates, namely, the Petitioner. It was also alleged that by
resorting to misrepresentation of facts and forgery and by accepting
the bribes and other pecuniary benefits, the Petitioner has misused
his official position as the PWD Minister. As a result, the State
Government of Maharashtra, has suffered loss to the tune of
Rs.840.16 Crores. Whereas, M/s.K.S. Chamankar Enterprises, its
partners, its partners, the Chamankar Family, M/s.Prime Builders
and Developers, its partners, Shailesh Mehta and Dhanpat Seth
have reaped an undue gain of Rs.840.16 Crores.
13. It was also alleged that the property worth Rs.17,35,80,400/-
is attached on 28/08/2015, property of Rs.71,70,60,050/- is
attached on 13/11/2015, property of Rs.24,96,46,213/- is attached
by order dated 22/12/2015 and property of Rs.17,82,55,010/- is
attached as per order dated 21/03/2016. These properties are
attached by the competent authority under the provisions of Section
5(1) of the Prevention of Money Laundering Act, 2002.
14. As per further allegations in the complaint, the proceeds of the
crime were then transferred to the accounts of the
Petitioner/entities from Mumbai against fraudulent and sham
transactions. It was also alleged that the Petitioner being the Ex-
PWD Minister in the State of Maharashtra, was the chief master-
mind of the entire scam. He had devised the entire methodology and
scheme of things to defraud the State Government by
conceptualizing and implementing a scheme, wherein, the
Maharashtra Sadan/R.T.O. project was awarded to M/s. K.S.
Chamankar Enterprises by misusing his official position. For that
purpose he accepted the bribe in the form of cash and laundered the
same into the purported business activities of his group. He was
thus, the chief conspirator, for generation of the proceeds of crime.
He has thus, directly and intentionally indulged himself in the
money laundering activities and thus, responsible for the
generation for proceeds of crime and its laundering and thereby
committed the offence punishable under Section 4 read with section
3 of the Prevention of Money Laundering Act, 2002 (for short, "PML
Act").
15. The Special Court, vide its order dated 27 th April 2016, took
cognizance of PML Complaint No.2 of 2016 by passing detail order
containing various reasons.
16. According to the Petitioner, as, during this period, his health
deteriorated, he moved Bail Application dated 3 rd May 2016 before
the Special Court, which came to be rejected by the order dated 13 th
May 2016. Petitioner, therefore, preferred Criminal Bail Application
No.1050 of 2016 in the said case on medical grounds before this
Court. The said Bail Application also came to be rejected by the
learned Single Judge of this Court vide his order dated 16 th June
2016. As a result, the Petitioner is still in the custody.
17. The Petitioner thereafter preferred Criminal Writ Petition
No.2744 of 2016 before this Court, seeking a Writ of Habeas Corpus,
amongst other Writs, while challenging the vires of Sections 45 and
49 of PML Act, or, for reading them down and seeking Writ of quo -
Warranto qua the Respondent No.2. In the said Writ Petition, on 27 th
September 2016, Respondent Nos.1 and 2 sought time to file reply
and the matter was adjourned to 27th September 2016. Meanwhile,
Petitioner came to know about the Judgment of Punjab and Haryana
High Court in the case of Gorav Kathuria Vs. Union of India and Ors.,
[Dated 11th May 2016 in Criminal Writ Petition No.595 of 2016] ,
wherein Section 45 of PML Act has been read down by the Division
Bench of Punjab and Haryana High Court and the Criminal Appeal
No.737 of 2016 preferred against the said order came to be
dismissed by the Hon'ble Supreme Court on 12th August 2016.
Petitioner, in such circumstances, sought to withdraw the earlier
Writ Petition, seeking liberty to file the instant Petition, restricting
his relief only to the extent of Writ of Habeas Corpus.
18. This relief is sought by the Petitioner, firstly, on the ground
that the requisite procedure for arrest of the Petitioner is not
followed in the case. It is submitted by learned Senior Counsel for
the Petitioner that in view of the amendment effected to Section 45
of PML Act by the Amendment Act of 2005, all the offences under
the PML Act are made non-cognizable. It is urged that in a case
where the offences are non-cognizable, the procedure required
under Section 155(2) of the Code needs to be followed. Unless the
cognizance of the offence is taken by the Magistrate or the Special
Court, the arrest of the Petitioner could not have been effected. It is
urged that, in the instant case, the Petitioner is arrested on 14 th
March 2016 on the basis of some Enforcement Case Information
Report, which was an internal document and not an FIR. The
complaint in the present case is filed on 30th March 2016 in the
Special Court and then, only on 27th April 2016, the Special Court
took cognizance of the offence. However, as much before that, the
Petitioner was arrested and that too in respect of a non-cognizable
offence, the very arrest of the Petitioner has become illegal and void
ab initio.
19. To substantiate the submission that offences under PML Act
are non-cognizable, learned Senior Counsel for the Petitioner has
relied upon the debates that took place in the Parliament when the
Amendment Act of 2005 was brought into force. It is urged that,
though the heading of Section 45 of PML Act still says that the
offences are "cognizable and non-bailable", the heading of the
Section cannot be the guiding criteria for interpretation of the
Section; because, as per the settled position of law, at times, the
headings can be misleading also. Here in the case, it is urged that, in
the backdrop of the debates that took place in the Parliament while
bringing the Amendment Act of 2005, it was specifically stated that
in order to make the offences under PML Act non-cognizable, the
amendment was introduced. It is, thus, submitted that when the
offence is non-cognizable, there is an embargo on the Special Court
also for taking cognizance of the offence, except upon a complaint in
writing made by the authorized officer. Here in the case, it is urged
that, as the complaint was filed much after the Petitioner was
arrested and produced for remand before the Special Court, his
arrest is illegal, being against the procedure established by law.
20. It is submitted by learned Senior Counsel for the Petitioner
that when the offence is non-cognizable, then, not only the
procedure required under Section 155(1) of the Code needs to be
followed, but the remaining provisions of the Code also come into
play. Here in the case, the provisions, which are required to be
followed by the concerned authorized officer while effecting the
arrest, as laid down in Chapter XII of the Code from Sections 154 to
173, are not at all complied with. It is submitted that these are the
mandatory procedural safeguards, which were required to be
followed by the Investigating Agency; whether the Investigating
Agency is the Enforcement Directorate or the Police Officer;
especially, when it pertains to the personal liberty of the Petitioner,
which is guaranteed under the various provisions of the
Constitution. It is urged that Section 65 of PML Act clearly mandates
application of provisions of the Code, in so far as they are not
inconsistent with the provisions of PML Act relating to arrest,
search and seizure, attachment, confiscation, investigation,
prosecution and all other proceedings.
21. In this respect, learned Senior Counsel for the Petitioner has
placed reliance on the Judgment of the Three-Judge Bench of the
Hon'ble Apex Court in the case of Om Prakash Vs. Union of India,
(2011) 14 SCC 1, to submit that the provisions of the Code; especially
Sections 154 to 173 of the Code, are applicable even in a case where
the power of arrest is exercised by the Excise Officer or Customs
Officer. It is urged that, in this Judgment, the Hon'ble Apex Court has
clearly held that, in respect of non-cognizable offence, a Police
Officer and in the said case, an Excise Officer will have no authority
to make an arrest without obtaining a warrant for the said purpose.
It is urged that Review Petition No.97-98 of 2013 filed by the Union
of India against the said decision, raising the question whether an
Excise Officer can arrest a person suspected of commission of
evading excise duty, without a warrant from the Magistrate, also
came to be rejected by the Hon'ble Supreme Court, vide order dated
13th August 2016, thereby clearly laying down that in case of non-
cognizable offence, even the other statutory authorities under the
Excise Act or Customs Act were also bound to follow the procedure
laid down in Section 155 of the Code. It is submitted that the law laid
down in this authority is squarely applicable to the Enforcement
Authorities under PML Act also and as such the mandatory
procedure not being followed in this case, the arrest of the Petitioner
becomes illegal.
22. Secondly, it is submitted that even if the offence u/s. 4 of the
PML Act, for which Petitioner is arrested, is held to be cognizable, in
that case also, further mandatory procedural safeguards provided in
the Code are not followed, which expect the Arresting Officer to give
the copy of the FIR to the arrested person, maintain and produce the
Case Diary of the investigation made so far, before the Court at the
time of seeking remand, so as to give sufficient opportunity to the
arrested person to challenge those grounds of arrest. It is submitted
that none of these safeguards were followed in the instant case, as
the FIR itself was not registered before arrest of the Petitioner.
According to learned Senior Counsel for the Petitioner, though there
was a specific direction in the Public Interest Litigation that after
lodging of the FIR, as per the procedure laid down by the Hon'ble
Supreme Court in the case of Lalita Kumari (supra), the
Enforcement Directorate and the Director, Anti-Corruption Bureau,
may proceed with investigation, no such direction was followed. It is
urged that as per the law laid down by the Apex Court in the case of
Lalita Kumari (supra), conducting an investigation into an offence
after registration of FIR under Section 154 of the Code is the
'procedure established by law' and, thus, is in conformity with
Article 21 of the Constitution. It is submitted that as no such FIR
was lodged in the instant case before arrest of the Petitioner, that
Constitutional safeguard for the protection of the citizen is violated
in the instant case, thereby making the Petitioner's arrest illegal.
23. Next, it is submitted by learned Senior Counsel for the
Petitioner that no such Case Diary, as was required to be maintained
under Section 172 of the Code, noting down the day-to-day progress
in the investigation, was maintained or produced before the Special
Court at the time of seeking remand of the Petitioner. By placing
reliance on the Judgment of the Division Bench of the Gujarat High
Court in the case of Rakesh Manekchand Kothari Vs. Union of India
& Ors., in Special Criminal Application (Habeas Corpus) No.4247 of
2015 dated 3rd August, 2015, it is submitted that in the said case
also, prima facie, it was held that, the offences under PML Act are
not cognizable and even if they are cognizable, the procedure
prescribed under Chapter XII of the Code is bound to be followed,
otherwise Article 21 of the Constitution would be violated.
Accordingly, in that case, the Petitioner was held entitled for
enlargement on bail under Section 45 of the PML Act. It is submitted
that the said order was challenged by the State before the Hon'ble
Supreme Court, but the Special Leave Petition (Crl.) No.9727 of
2015 was 'dismissed' by the Hon'ble Supreme Court, vide its order
dated 23rd November 2015.
24. The further ground on which the arrest is called as 'illegal'
pertains to non-following of the procedure, as laid down in PML Act
also, while effecting the arrest of the Petitioner. It is urged that
Section 19(1) of PML Act also contemplates giving 'grounds of
arrest' to the accused immediately and also to cite those 'grounds of
arrest' in the Arrest Warrant. However, in this case, the 'grounds of
arrest' are neither given to the Petitioner immediately, nor they are
mentioned in the Arrest Warrant. Thus, it is submitted that even the
provisions of PML Act, which are mandatory in nature, as affecting
and having bearing on the personal liberty of the citizen, also being
not followed in the instant case, the arrest of the Petitioner is illegal
and void. Reliance is also placed on the landmark decision of the
Hon'ble Supreme Court in the case of D.K. Basu Vs. State of West
Bengal, 1997 (1) SCC 416, to submit that various safeguards laid
down in the said decision, before effecting the arrest, are also not
followed in the instant case. Hence, as per the law laid down by the
Honble Supreme Court in the case of Madhu Limaye Vs. State of
Maharashtra, AIR 1969 SC 1014, it is submitted that the Writ of
Habeas Corpus is, definitely, maintainable, the arrest of the
Petitioner in the instant case being against the procedure
established by law.
25. The next thrust of the Petitioner, in the instant case, for
challenging his arrest as illegal and unauthorized, then pertains to
the competence and authority of Respondent No.2 to arrest him. It is
submitted that Section 19 of the PML Act contemplates that only an
officer authorized by the Central Government has power of arrest.
Here in the case, it is submitted that no notification is produced on
record to show that Respondent No.2 was authorized by the Central
Government to exercise the power of arrest. It is urged that as per
the Notification No. GSR 441(E) dated 1st July 2005, which has not
been rescinded till the date, the power of arrest has been conferred
by the Central Government exclusively upon the Director of
Enforcement holding office under the Foreign Exchange
Management Act, 1999. No such power under Section 19 of PML Act
is conferred on any other Director. Admittedly, Respondent No.2 is
not the Director but an Assistant Director and in the absence of any
notification, produced on record to show that he has been authorized
by the Central Government to exercise the power of arrest, the very
arrest of the Petitioner, effected by Respondent No.2, is ex-facie
illegal, void and unauthorized and hence liable to be set aside.
26. According to learned Senior Counsel for the Petitioner,
therefore, it is a fit case where the Writ of Habeas Corpus needs to be
issued for release of the Petitioner forthwith from such illegal and
unauthorized arrest.
27. The Petitioner has, in this context, in view of these alleged
manifest illegalities while effecting his arrest and granting remand,
sought an urgent ad-interim relief of his release on bail. It is
submitted that this relief is urgently necessary as the Petitioner is
suffering from coronary artery disease with sick sinus syndrome,
needing urgent medical attention. It is also urged that he is suffering
from severe arthritis and, therefore, swelling of large and small
joints, which has resulted into problem in defecation and not being
able to bend his hand for the purpose of eating. He is also suffering
from episodes of bradycardia and ischemia and has been
hospitalized many times since his arrest. He has asthama since long
time and is suffering from skin conditions. He needs close
monitoring and, therefore, it is submitted that he is entitled for the
urgent relief of ad-interim nature by issuance of Writ of Habeas
Corpus for his release from the custody. Hence, by way of prayer
clause 10(b), at this ad-interim stage, the release of the Petitioner is
sought on bail, on such terms and conditions, as this Court may
deem fit.
28. This Petition came to be resisted strongly by Respondent Nos.1
to 3, vide affidavit-in-reply of Respondent No.2 Shri. Umesh Kumar,
Assistant Director of Enforcement Directorate, Mumbai,
challenging, inter alia, the maintainability of the Petition itself. It is
submitted that, as the Petitioner is in Judicial Custody for
committing an offence punishable under Section 4 of the PML Act
and as the custody of the Petitioner has been duly authorized and
granted by the competent Special Court established under the PML
Act and from time to time, his remand being extended, his detention
in the judicial custody cannot, in any way, be called as illegal,
unauthorized or void ab initio, so as to challenge the same under
Article 226 of the Constitution and further to seek relief of habeas
corpus. It is urged that an alternate efficacious remedy is available
to the Petitioner to challenge his remand to the custody by filing
Criminal Revision Application or a Writ Petition under Article 227 of
the Constitution.
29. It is specifically denied by the Respondents that the offence
under Section 4 r/w. Section 3 of PML Act, for which the Petitioner is
arrested, is non-cognizable. The attention of the Court is invited to
the head-note of Section 45 of the PML Act, which reads as "offences
are cognizable and non-bailable". It is urged that this head-note
clearly suggests that the offences are cognizable and non-bailable. It
is submitted by learned Additional Solicitor General Shri Neeraj
Kaul that, in several of its Judgments, the Hon'ble Supreme Court
has been pleased to hold that the head-notes are to be read as part of
the Section and they cannot be segregated or separated from the
provisions. By pointing out to the contents of Section 45(1) of the
PML Act, it is submitted that the said section also clarifies that this
provision overrides the provisions of the Code and further de-bars
Police Officers from investigating into the offences under PML Act.
30.
It is urged that the amendment carried out to Section 45 of
PML Act in the year 2005, was only for the purpose of clearing the
conflict as to exercise of the power of arrest for the offences under
the PML Act, between the Police Officers and Enforcement
Directorate Authorities. It has no effect of making the offences under
PML Act as non-cognizable. It is submitted that, even having regard
to the punishment prescribed for the offence punishable under
Section 4 of the PML Act, which may extend upto seven years of
imprisonment, in view of the provisions of the Code also, the said
offence becomes cognizable and, therefore, the contention raised by
the Petitioner that this offence being non-cognizable, the Court could
not have taken cognizance without the complaint or FIR and the
Petitioner could not have been arrested without warrant is not at all
tenable.
31. It is further urged that the contention raised by the Petitioner,
in respect of non-compliance of provisions of Chapter XII of the
Code, is absolutely misconstrued. According to learned Additional
Solicitor General, PML Act is a complete Code in itself. Section 46
thereof makes it clear that intention of the Legislature was to make
provisions of the Code applicable, only for the procedure to be
followed before the Special Court. PML Act nowhere states that the
provisions of the Code will apply in its entirety to the provisions of
PML Act. According to learned Additional Solicitor General, Section
65 of the PML Act spells out clear intention of the Legislature to
maintain the independency of the Special Statute, thereby clarifying
that the provisions of the Code shall apply, only if they are not
inconsistent with the provisions of PML Act.
32. Here in the case, it is submitted that the provisions of the PML
Act lay down a complete procedure to be followed for the purpose of
effecting arrest. Section 19 of the PML Act gives certain powers to
the authorized officers to effect the arrest, when such officer has
reason to believe, on the basis of the material in its possession, that
any person has been guilty of an offence punishable under the said
Act. This Section does not contemplate lodging of FIR, before
effecting the arrest. It is submitted that, in view of Section 71 of PML
Act, Section 19 will have overriding effect on the provisions of
Chapter XII of the Code.
33. Further, it is submitted that Chapter XII of the Code, which
consists of Sections 154 to 176, relating to arrest and investigation
of the offences, apply only to the Police Officers and the said
provisions are not applicable to the persons and authorities effecting
arrest under the other Acts. Respondent No.2, the Assistant
Director, is an officer under the Enforcement Directorate, appointed
as an authority, under Sections 48 and 19 of the PML Act, to effect
the arrest on the basis of the provisions contained in the PML Act;
especially Section 19 of the Act, and, therefore, having regard to
Section 71 of the PML Act, giving overriding effect to these
provisions, all the contentions raised by the Petitioner to challenge
his custody as illegal and unauthorized fell on the ground.
34. As to the ground raised by the Petitioner that Respondent
No.2, who was the then Assistant Director of Enforcement,
Directorate Department, was not authorized to effect the arrest, it is
submitted that, as Respondent No.2 was one of the authorities
appointed for the purpose of PML Act, it is clear that in view of
Sections 48 and 49 r/w. Section 19 of PML Act that he was the
'officer' appointed to exercise the power of arrest and, therefore, he
was competent and authorized to arrest the Petitioner. Therefore,
the challenge to Petitioner's arrest on this ground also fails.
35. Lastly, it is submitted that the arrest of the Petitioner is
effected, after following all the procedural safeguards and in
accordance with the provisions of PML Act. There is no violation of
any of the procedural safeguard. His arrest and custody is also
validated by the order of the competent Special Court and in such
situation, the Writ of Habeas Corpus cannot lie for his release. It is
also submitted that the Petitioner has made every attempt to get
himself released on bail, even on the medical grounds. However, as
all his attempts failed, he has sought this ingenious way of seeking
his release on Writ of Habeas Corpus, which also cannot be
maintainable.
36. As regards the ad-interim relief of bail sought by the Petitioner
on medical ground, it is submitted that the application for bail filed
by the Petitioner on the same ground is rejected, not only by the
Special Court, but also by this Court. Moreover, as per the order
passed by the Special Court, the Petitioner is being given treatment
not only at the J.J. Hospital of Government, but also, presently, he is
in private Bombay Hospital on his request. Therefore, there should
not be any grievance on that score. Moreover, it is submitted that,
such a plea cannot be considered in this Writ Petition when it is
already rejected on merits, after having regard to all the medical
papers produced and on their proper consideration by the Special
Court and this Court. In sum and substance, submission of learned
Additional Solicitor General is that this Petition is devoid of merits
and hence liable to be dismissed in limine, with costs, as it is
amounting to abuse of the process of law.
37. This petition is strongly resisted by the intervener also, at
whose instance the P.I.L. No.23 of 2014 was filed against the
Petitioner alleging multi-crore fraud. According to learned Counsel
for the intervener, this petition is clearly an abuse of the process of
law, as the Petitioner has resorted to it, having been unsuccessful in
his attempts to get bail, even on medical grounds. It is submitted by
him that this Court should exercise judicial restraint and not grant
such extra-ordinary relief of Habeas Corpus, which is sought to
circumvent the provisions of bail.
38. Having heard learned Senior Counsel for the Petitioner Shri
Choudhary, learned Additional Solicitor General Shri Neeraj Kaul for
Respondent Nos.1 to 3, and Shri Shinde, learned Public Prosecutor
for Respondent No.4-State and learned Counsel for intervener Shri
Shenoy at length, we are of the considered opinion that for
appreciating these rival submissions, one has to take recourse not
only to the various Judgments cited at Bar by both the parties, but
also to the provisions of PML Act, in detail, including the objects and
reasons, for the purpose of which this PML Act was brought on the
Statute Book.
39. However, before adverting to the provisions of PML Act, it
would be necessary to deal, firstly, with the maintainability of this
Petition, as challenged by learned Additional Solicitor General for
the Respondents.
Maintainability of Petition for Habeas Corpus
40. In this case, the Petitioner is seeking the relief of habeas
corpus on the ground that his arrest by Respondent No.2 and his
subsequent detention in the custody, as per the remand granted by
the Special Court, is illegal and void ab initio. Hence he is entitled for
his release; whereas, according to Respondents, the Petitioner was
arrested and taken into custody for committing an offence under
Section 4 r/w. Section 3 of PML Act and his custody has been duly
authorized and granted by the competent Special Court, established
under the PML Act. Therefore, he is under custody in consequence
of judicial orders of remands passed by the Special Court. As such,
his Writ of Habeas Corpus cannot be maintainable for the release;
especially when he can avail an alternate remedy of Revision
Application or a Writ Petition under Section 227 of the Constitution.
41. To substantiate this submission, learned Additional Solicitor
General has relied upon the Judgment of the Hon'ble Apex Court in
the case of Kanu Sanyal Vs. District Magistrate, Darjeeling & Ors.,
(1974) 4 SCC 141, wherein, the Writ Petition was filed under Article
32 of the Constitution by the Petitioner Kanu Sanyal, challenging
the legality of his detention in the Central Jail and praying for a Writ
of Habeas Corpus for setting him at liberty forthwith. The grounds
raised for challenging his arrest were three fold; namely, his
detention was in violation of Clause (1) of Article 22 of the
Constitution, as he was not informed of the grounds for his arrest.
Secondly, the Sub-Divisional Magistrate, Darjeeling, has no
jurisdiction to try the cases filed against him. Therefore, he could not
authorize detention of the Petitioner under Article 167 of the Code
for a term exceeding fifteen days in the whole. It was only the Sub-
Divisional Magistrate, Siliguri, who has jurisdiction to try the cases
and hence he alone can remand the Petitioner to custody after the
expiration of the initial period of fifteen days. Thirdly, it was
submitted that the officer-in-charge of the District Jail, Darjeeling
was bound to abstain from complying with the warrant for
production issued by the Special Judge, Vizakhapatnam, by reasons
of Section 6 of the Prisoners (Attendance in Courts) Act, 1955 and
the production of the Petitioner before the Special Judge,
Vizakhapatnam, pursuant to such warrant for production and his
detention in the Central Jail, Vizakhapatnam, were consequently
without the authority of law.
42. While considering these grounds, it was held by the Hon'ble
Apex Court that, so far as the first two grounds were concerned, as
they relate exclusively to the legality of the initial alleged detention
of the Petitioner in the District Jail, Darjeeling, it was not necessary
to decide them in view of well settled position that the earliest date
with reference to which the legality of the detention can be
challenged in a habeas corpus proceeding is a date of filing of the
application for habeas corpus and not any other date. As on the date
of filing of Habeas Corpus application, the detention of the Petitioner
Kanu Sanyal was in the District Jail at Vizakhapatnam, it was held
that legality of his earlier detention need not be considered. As
regards the third ground, it was held that the conditions laid down
were clearly satisfied and hence there was no question of granting
relief. While concluding, in last paragraph, it was categorically held
that,
"a Writ of Habeas Corpus cannot be granted when a
person is committed to jail custody by the
competent Court by an order, which, prima facie,
does not appear to be without jurisdiction or wholly
illegal." (emphasis supplied)
Accordingly, the Petitioner was held not entitled to a Writ of
Habeas Corpus to free him from detention.
43. Learned Additional Solicitor General has in this respect also
placed reliance on the judgment of the Hon'ble Apex Court in the
case of Ram Narayan Singh vs. The State of Delhi & ors., AIR 1953
SCC 277, to submit that in habeas corpus proceeding, the Court is to
have regard to the legality or otherwise of the detention at the time
of return and not with reference to the institution of the
proceedings. It is urged that in this judgment, in paragraph (4), it
was categorically held that "in a question of habeas corpus, when the
lawfulness or otherwise of the custody of the persons concerned is in
question, the Court is to have regard to the legality or otherwise of
the detention at the time of return and not with reference to the
institution of the proceedings". Accordingly, it was held that;
"the material date on the facts is the date when the
affidavit on behalf of the Government was filed
justifying the detention as a lawful one. If, on that
date, the detention is not illegal, which is authorised
by the Magistrate, vide his remand orders, then
there is no question of considering the petition for
habeas corpus."
(emphasis supplied)
44. Per contra, learned Senior Counsel appearing for the Petitioner
has relied upon the Three-Judge Bench decision of the Hon'ble
Supreme Court in the case of Madhu Limaye (supra), wherein
Madhu Limaye, the then Member of Lok Sabha, and several other
persons were arrested, on November 6 in the year 1968 at
Lakhisarai Railway Station, near Monghyr. On the same date,
Madhu Limaye had addressed a Petition in the form of a letter to the
Apex Court under Article 32 of the Constitution mentioning that he
along with his companions had been arrested, but had not been
communicated the reasons or the grounds of arrest. It was stated
that the arrested persons had been merely told that the arrest had
been made under sections, which were bailable. It was, therefore,
prayed that the Writ of Habeas Corpus be issued for restoring liberty
of the Petitioners therein, as their arrest and detention were illegal.
In this Petition, the Apex Court has at length, considered the various
facts and circumstances under which Madhu Limaye and others
were came to be arrested and kept in preventive detention under
Article 22 of the Constitution. In that context, reliance was placed
by the Hon'ble Apex Court on Article 22(1) of the Constitution and
observed that, "Article 22(1) of the Constitution embodies a rule
which has always been regarded as vital and fundamental right for
safeguarding personal liberty in all legal systems, where the rule of
law prevails. It 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, nor shall he be denied the right to
consult and be defended by a legal practitioner of his choice".
45. Considering that Madhu Limaye and others had made a
positive assertion in their Petition that they had not been informed
of the grounds of their arrest and the said assertion had remained
uncontroverted, having regard to the specific mandatory safeguard
laid down in clause (1) of Article 22 of the Constitution, in para
No.14, it was observed by the Hon'ble Apex Court that;
"14.Once it is shown that the arrests made by the police
officers 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. This the State has
failed to do. The remand orders are patently routine
and appear to have been made mechanically. All
that Mr. Chagla has said is that if the arrested
persons wanted to challenge their legality the High
Court should have been moved under appropriate
provisions of the Criminal Procedure Code. But it
must be remembered that Madhu Limaye and others
have, by moving this Court under Article 32 of the
Constitution, complained of detention or
confinement in jail without compliance with the
constitutional and legal provisions. If their detention
in custody could not continue after their arrest
because of the violation of Article 22 (1) of the
Constitution they were entitled to be released
forthwith. The orders of remand are not such as
would cure the constitutional infirmities. This
disposes of the third contention of Madhu Limaye."
(emphasis supplied)
46. Accordingly, the Apex Court was pleased to order the release
of Madhu Limaye and others on the ground of violation of the
provisions of Article 22(1) of the Constitution and Remand Order
not disclosing application of the mind by the Magistrate.
47. The bare perusal of these two Judgments; one in the case of
Kanu Sanyal (supra) and the other in the matter of Madhu Limaye
(supra), thus, make it clear that both the Judgments pertain to the
preventive detention of the Petitioners therein under the provisions
of Article 22 of the Constitution and not in respect of the arrest of a
person accused of an offence punishable under IPC or under any
other special law. Secondly, as per the Judgment in the case of Kanu
Sanyal (supra), only when the detention of the Petitioner on the date
of filing of the Writ Petition is illegal, it was held that the Writ of
Habeas Corpus can lie and it cannot be granted where a person is
committed to Jail custody by a competent Court by an order, which,
prima facie, does not appear to be without jurisdiction or wholly
illegal. Even the Judgment in the case of Madhu Limaye (supra) also
makes it clear that it has to be shown that the arrest made by the
Police Officer was illegal and further it has to be established that, at
the stage of remand, the Magistrate directs detention in the custody
without applying his mind to all the relevant matters. As held in the
said authority, if the orders of remand are passed by the Magistrate
without application of mind and they are patently routine and
appear to have been made mechanically, then only, such orders of
remand would not cure the Constitutional infirmities in effecting
arrest.
48. Thus, the necessary inference that can be drawn from the law
laid down in both these authorities is that, in the first place,
Petitioner has to show that his arrest is patently and manifestly
illegal and null, being without jurisdiction. The Petitioner has to then
further show that the Magistrate or the Special Court in this case,
which has granted his remand, has not applied its mind to all the
relevant matters and the remand orders are either patently routine
or appear to have been made mechanically. Only when these
essential two conditions are satisfied, the Petition for Habeas Corpus
can lie, otherwise, as held in the above-said authority of Kanu
Sanyal (supra), if the person is committed to Jail custody by a
competent Court by an order, which, prima facie, does not appear to
be without jurisdiction or wholly illegal, such Writ of Habeas Corpus
can neither be asked for, nor can be granted.
49. This legal position has been further clarified and reaffirmed by
the Hon'ble Apex Court in the recent decision of Manubhai R.P. Vs.
State of Gujarat and Ors., (2013) 1 SCC 314. In this case, the
complaint was lodged against the appellant-accused for the offences
punishable under Sections 467, 468, 409 and 114 of IPC. He filed an
application under Section 482 of the Code, challenging the
registration of FIR and further investigation. On 16 th July 2012, the
accused was arrested and produced before the Judicial Magistrate,
First Class (JMFC) at 4:00 p.m. on 17 th July 2012. The JMFC
granted remand to custody of the appellant-accused upto 2:00 p.m.
on 19th July 2012. On the same day, i.e. 17th July 2012, the High
Court passed an interim order staying further proceedings in
respect of the investigation. The interim order passed by the High
Court was brought to the notice of an investigating agency on 18 th
July 2012. On 19th July 2012, an application was filed seeking bail by
the appellant on the ground that the High Court had stayed further
investigation and sought the release of the appellant-accused. The
JMFC rejected the bail application holding that the High Court order
was regarding stay on investigation. The appellant-accused
unsuccessfully approached the Sessions Court. Then the appellant-
accused filed a Habeas Corpus Petition under Article 226 of the
Constitution before the High Court. It was rejected as the High Court
did not find any infirmity in the remand order of the applicant-
accused passed by the JMFC. The appellant, therefore, approached
the Hon'ble Apex Court challenging the order of the High Court.
50. In this Appeal, while considering the object of the Writ of
Habeas Corpus, it was held by the Hon'ble Apex Court that;
"The Writ of Habeas Corpus was devised for
production of an individual in case of illegal
restraint or confinement. It is, no doubt, of the
highest constitutional importance to provide a swift
and expedient remedy by determining the
Petitioner's right to freedom and to protect the
individual's liberty against arbitrary action of the
executive or by private person. Its main objective is
to release persons illegally detained or confined."
(emphasis supplied)
51. Having stated about the significance of the Writ of Habeas
Corpus as a weapon for protection of individual liberty through
judicial process, the Hon'ble Apex Court refered to its earlier
decisions in which the Apex Court has expressed its views
pertaining to the legality of the order of detention; especially that
ensuing from the order of the Court when an accused is produced in
custody before a Magistrate after arrest. The Apex Court then also
noted the opinion expressed in earlier cases relating to the relevant
stage of delineation for the purpose of adjudicating the legality of the
order of detention. Then the Hon'ble Apex Court referred to its
earlier decision in Col. B. Ramachandra Rao Vs. State of Orissa,
(1972) 3 SCC 256, wherein it was opined that,
"a Writ of Habeas Corpus is not granted where a
person is committed to jail custody by a competent
Court by an order, which, prima facie, does not
appear to be without jurisdiction or wholly illegal".
(emphasis supplied)
52. Thereafter, in paragraph No.18, the Hon'ble Apex Court
considered its Judgment in Madhu Limaye (supra). In paragraph
No.19, the Hon'ble Apex Court has considered, in detail, the above
referred Judgment in the case of Kanu Sanyal (supra) and,
ultimately, in paragraph No.21, the Hon'ble Apex Court quoted with
approval the principle laid down in the case of Kanu Sanyal (supra)
that,
"any infirmity in the detention of the Petitioner at
the initial stage cannot invalidate the subsequent
detention and the same has to be judged on its own
merits." (emphasis supplied)
53. In paragraph No.22, the Hon'ble Apex Court also referred to
the decision of the Constitution Bench in the case of Sanjay Dutt Vs.
State, (1994) 5 SCC 410, wherein it was opined, in paragraph No.48,
that;
"48. ...... It is settled by Constitution Bench decisions that
a petition seeking the Writ of Habeas Corpus on the
ground of absence of a valid order of remand or
detention of the accused, has to be dismissed, if on
the date of return of the rule, the custody or
detention is on the basis of a valid order."
(emphasis supplied)
54. Ultimately, while concluding, in paragraph No.31, the Hon'ble
Apex Court was pleased to observe as follows :-
"It is well-accepted principle that a Writ of Habeas
Corpus is not to be entertained when a person is
committed to judicial custody or police custody by the
competent court by an order which prima facie does
not appear to be without jurisdiction or passed in an
absolutely mechanical manner or wholly illegal. As
has been stated in B. Ramachandra Rao and Kanu
Sanyal, the court is required to scrutinize the legality
or otherwise of the order of detention which has been
passed. Unless the court is satisfied that a person has
been committed to jail custody by virtue of an order
that suffers from the vice of lack of jurisdiction or
absolute illegality, a writ of habeas corpus cannot be
granted. It is opposite to note that the investigation,
as has been dealt with in various authorities of this
Court, is neither an inquiry nor trial. It is within the
exclusive domain of the police to investigate and is
independent of any control by the Magistrate. The
sphere of activity is clear cut and well demarcated.
Thus, viewed, we do not perceive any error in the
order passed by the High Court refusing to grant a
writ of habeas corpus as the detention by virtue of the
judicial order passed by the Magistrate remanding
the accused to custody is valid in law."
(emphasis supplied)
55. Accordingly, the Hon'ble Supreme Court in the said case was
pleased to uphold the order of the High Court rejecting the relief of
Habeas Corpus holding that the order of remand of the appellant,
which was a judicial act, having been passed by the learned
Magistrate, after considering allegations in the FIR and not in a
routine or mechanical manner, such order does not suffer from any
infirmity so as to invoke the Writ of Habeas Corpus.
56. Thus, as rightly submitted by the learned Additional Solicitor
General, the law on this point is fairly well settled to the effect that,
for invoking extra-ordinary jurisdiction of the High Court to seek the
Writ of Habeas Corpus, the Petitioner has not only to show that his
arrest is ex-facie illegal, but he has further to show that the remand
orders passed by the Magistrate are without application of mind,
patently routine and passed completely mechanically.
57. Now, in this case, admittedly, the Petitioner is arrested on 14 th
March 2016, for the offence punishable under Section 4 r/w. Section
3 of PML Act. On 15th March 2016, the Petitioner was produced
before the Special Court at Mumbai, established under the PML Act,
and the Special Court had, vide its detailed order running into four
pages, which is produced in the paper-book by the Petitioner at page
Nos.172 to 175 (Exhibit "Q"), remanded the Petitioner to the custody
of Enforcement Director till 17th March 2016.
58. May it be noted that the competency of the Special Court to
remand the Petitioner, which is established under the provisions of
PML Act, is not at all challenged. Thereafter also, from time to time,
the said Special Court has extended the remand of the Petitioner to
the judicial custody on 17th and 31st March 2016 by passing detail
orders, giving all the reasons.
59. The perusal of the initial order of 15th March 2016, when the
Petitioner was produced before the Special Court for the first time,
on his arrest on 14th March 2016, clearly reveals that the Petitioner
was produced by the Assistant Director, Enforcement Directorate
and the grounds for his arrest and production were brought to the
notice of the Special Court. It its order, the Special Court has
considered in detail the report submitted by Respondent No.2 for
seeking remand of the Petitioner, which report is also produced in
this Petition at Exhibit "P", from page Nos.166 to 171 of the paper-
book. It was pointed out to the Special Court and the Special Court
has stated in its order that, as per the order passed by this Court on
18th December 2014 in Public Interest Litigation No.23 of 2014, SIT
comprising of Director General, A.C.B., Mumbai, and Director,
Enforcement Directorate, was constituted to conduct the enquiry
with regard to the allegations made against the Petitioner, who was
the then Minister in the Government of Maharashtra and his
relatives. In pursuance thereof, FIR No.32 of 2015 was registered
against the Petitioner on 8th June 2015 and FIR No.35 of 2015 was
registered against the Petitioner on 11th June 2015. The remand
orders gives the details as to how these offences came to be registered
against the Petitioner and others. It also gives details as to how
during investigation of those offences, the ingredients of the offences
under Sections 3 and 4 of PML Act were revealed. The remand order
passed by the Special Court clearly states that, in view of the
allegations made in the FIRs and also the material revealed during
the investigation, it was transpired that M/s. Parvesh Constructions
Private Limited and M/s. Armstrong Energy Private Limited, the
Firms owned and controlled by the Petitioner, were sold to dubious
Entities, against cash, at unrealistic high premium of Rs.9,900/- per
share. In this way, the funds to the tune of Rs.75 to 50 crores
respectively were channeled by this method. The evidence collected
in the investigation also revealed generation of huge illicit funds and
its laundering by the Petitioner, his family members and his
associates. The remand order also records the prima facie
satisfaction of the Special Court to the effect that, "the evidence
collected and money trail available so far in respect of offence of
money-laundering, there are reasons to believe that the accused
before the court is guilty of the offence of money-laundering." The
remand order, on the basis of submissions made by learned Senior
Counsel for CBI and Petitioner, also records the reasons as to why
remand of accused in the custody of Enforcement Directorate was
necessary till 17th March 2016.
60. Having regard to the detailed Remand Report, in which
various materials transpired in the course of investigation, was
stated, saying that the proceeds of the crime to the tune of Rs.750
Crores were yet to be identified and for that purpose, the custodial
interrogation of the Petitioner was necessary to unearth the process
of generation of illicit funds and for the purpose of the corroboration
and confrontation of the Petitioner with the others involved in the
case, the custodial interrogation of the Petitioner was necessary. It
was further stated in the remand order that the Petitioner, having
played a very crucial role in generation and subsequent monitoring
of huge amounts of money and being prima facie guilty of the offence
of money-laundering, as defined under Section 3 and punishable
under Section 4 of PML Act, and further having regard that he being
an influential person and may influence the other witnesses or
tamper the evidence, if allowed to remain at large, his detention was
necessary.
61. The Special Court has, thus, remanded the Petitioner to the
custody of Enforcement Directorate till 17th March 2016. The order
passed by the Special Court, in this way, gives detailed reasons as to
how there was sufficient material creating a reasonable belief about
the commission of the offence and the custodial interrogation being
necessary for the same. The Remand Order also shows that not only
the learned Public Prosecutor for the Respondents was heard, but
even learned Senior Counsel for the Petitioner was also heard at
length. It was also taken note of that the Petitioner has not
complained in the Petition or orally of ill-treatment, in any way, at
the hands of the Enforcement Directorate and, hence, after
considering the reasons cited in the Remand Report and being fully
satisfied that further custodial interrogation of the Petitioner was
really necessary, the Special Court has remanded the Petitioner to
the custody of Enforcement Directorate till 17th March 2016.
62. Thus, perusal of the Remand Report and the Remand Order
passed thereon by the Special Court, clearly makes it necessary to
hold that, in the present case, at the stage of remand, the Special
Court has directed detention of the Petitioner first in the custody of
the Enforcement Directorate for two days and thereafter in judicial
custody, after applying its mind to all the relevant matters. Not only
the first remand order dated 15th March 2016, but even the
subsequent remand orders dated 17th and 31st March 2016 also make
it clear that they are not routine, far remain "patently routine" or
passed "mechanically", but they have been passed after proper
application of mind and having arrived at reasonable belief and
conclusion that the arrest of the Petitioner was necessary and his
further detention was also necessary, having regard to the sufficient
material collected against him, pointing to the siphoning of funds of
more than Rs.770 Crores. Therefore, the remand orders are not such
as held in the matter of Madhu Limaye (supra) by the Hon'ble Apex
Court, which could not cure Constitutional infirmities, if any, that
one can see in the arrest of the Petitioner. Conversely, if at all there
were any Constitutional infirmities in the arrest of the Petitioner,
then, they stand fully cured by the remand orders passed by the
Special Court.
63. Therefore, as held in above referred authorities, for the sake of
arguments, even assuming that the arrest of the Petitioner was
illegal, once it is established that, at the stage of remand of the
Petitioner, the Special Court has directed detention of the Petitioner
after applying its mind to all the relevant factors, the orders of
remand having thus cured the alleged Constitutional infirmities and
such orders, prima facie, being not passed without jurisdiction or
wholly illegal, then, as per the law laid down in the above cited
authorities, the Writ for Habeas Corpus itself is not maintainable.
64. It is also pertinent to note that whatever grievances raised by
the Petitioner in this Petition to challenge his arrest as illegal on the
count of his arrest being not effected by the officer authorized under
the PML Act; or he being not produced within twenty-four hours
before the Court; or being not supplied with the grounds of arrest; or
the offence being non-cognizable he could not have been arrested
without permission of the Court, none of these contentions, as can be
seen from the remand order of the Special Court, appear to have
been raised before the Special Court, either at the time of first
remand on 15th March 2016 or thereafter from time to time when he
was remanded. He had not even raised the ground that he was called
at the office of the Enforcement Directorate at 10:30 hours and was
detained illegally. He had also not contended that his arrest was
wrongly shown at 22:05 hours to further show his production before
the Special Court within twenty-four hours. Though the Special
Court has specifically stated the timing of his production as "4:30
p.m." and asked him whether he has any complaint of ill-treatment,
it was noted that "there was no such complaint of ill-treatment or
illegal detention". This was also submitted by his learned Senior
Counsel also, who was representing him before the Special Court.
65. Therefore, now it is too late in a date for the Petitioner to
contend, in this Petition, that the learned Special Court has not
applied its mind to these contentions and remanded him
mechanically to the judicial custody. If really there was such illegal
detention of the Petitioner or he was not given the grounds of arrest
or was wrongly arrested by an officer, who had no authority to do so,
then, the Petitioner, who was ably represented by his learned Senior
Counsel, would not have failed to raise these grounds before the
Special Court. The fact that those grounds were not raised before the
Special Court either at the time of first remand or thereafter from
time to time or in the two Bail Applications; one filed before the
Special Court and another before this Court, and after the lapse of
more than six months, when he is raising these contentions for the
first time to challenge his custody on the count that it is illegal for
non-compliance of mandatory requirements, then, it goes without
saying that this Petition for Habeas Corpus can hardly be
maintainable on the ground that his arrest itself was illegal and,
therefore, the remand order was also illegal.
66. It is pertinent to note that in the case of Madhu Limaye
(supra), on which much reliance is placed by learned Senior Counsel
for the Petitioner, on the very day on which Madhu Limaye and
others were arrested, they had addressed a Petition in the form of a
letter to the Hon'ble Supreme Court, under Article 32 of the
Constitution, mentioning that they had been arrested but not been
communicated the reasons or the grounds for the arrest and in view
thereof, the cognizance of their Petition seeking the Writ of Habeas
Corpus was taken; particularly when the said assertion had
remained uncontroverted in the 'Return' filed by the State. The
perusal of paragraph No.10 of the order passed by the Hon'ble
Supreme Court in the said matter reveals that the authorities
wanted to invoke all kinds of provisions, like Sections 151, 107 and
117 of the Code, apart from Section 188 of IPC, and since no arrest
could be effected for an offence under Section 188 of IPC by the
Police Officers without proper orders, it was held that "these officers
may have been naturally reluctant to comply with the mandatory
requirements of Article 22(1) of the Constitution, by giving
necessary information and that was the reason why the reasons of
arrest were not told to Madhu Limaye and others". In that backdrop,
it was held that this infirmity being not cured in view of the routine
remand orders passed by the Magistrate mechanically, without
applying his mind to all the relevant matters, the Petition for Habeas
Corpus would lie.
67. As against it, in the present case, the Remand Report and the
order of remand passed by the Special Court clearly state which
offence is made out against the Petitioner and on the basis of which
material. As stated above, all the Remand Reports are in detail, so
also the remand orders, in which the Special Court has applied its
mind to all the relevant matters. Therefore, in no way, it can be said
that the impugned order of remand, which validated custody of the
Petitioner on his alleged illegal arrest, suffers from any illegality.
Once it is held to be so, then it follows that on this very ground itself,
Petition for Habeas Corpus is bound to fail. On this very ground
itself, this Petition is liable to be dismissed in limine at the threshold
itself.
68. This is also for the reason that, the Hon'ble Apex Court has
refused to issue such Writ of Habeas Corpus, even when it found that
the Remand Order was passed by the Magistrate mechanically,
without any application of mind, in a cavalier manner, betraying
insensitivity.
69. The case in point is that of Saurabh Kumar through his father
vs. Jailor, Koneila Jail & anr., (2014) 13 SCC 436, which is relied by
learned Additional Solicitor General. In this case also, the writ of
habeas corpus was sought by the petitioner alleging his detention to
be illegal. It was contended by the Petitioner that he was
unnecessarily and illegally detained by the police. When the matter
came up before the Hon'ble Apex Court, the Hon'ble Apex Court took
note of the two counter affidavits filed by the Respondents, which
showed that the petitioner was an accused in a Criminal Case which
was registered for the offences punishable under Sections 147, 147,
149, 323, 427, 504, 379 and 386 of IPC and under Section 27 of the
Arms Act and after such registration he was arrested and produced
before the Additional Chief Judicial Magistrate and thereafter he
was taken in judicial custody. It was however, contended by learned
Senior Counsel for the Petitioner that direction be given to the jailor
to produce the Remand Report of the Petitioner that itself would
show the illegal detention.
70. After hearing the arguments advanced by both the parties, the
Hon'ble Apex Court in paragraph (13) of its judgment was pleased to
hold as follows;
"13. It is clear from the said narration of facts that
the petitioner is in judicial custody by virtue of an
order passed by the Judicial Magistrate. The same is
further ensured from the Original Record which this
Court has, by order dated 9th April, 2014, called for
from the
ig Court of Additional Chief Judicial
Magistrate, Dalsingsarai, District Samastipur, Bihar.
Hence, the contention of the learned counsel for the
petitioner that there was illegal detention without
any case is incorrect. Therefore, the relief sought for
by the petitioner cannot be granted. Even though
there are several other issues raised in the Writ
Petition, in view of the facts narrated above, there is
no need for us to go into those issues. However, the
petitioner is at liberty to make an application for his
release in Criminal Case No. 129/13 pending before
the Court of the learned Addl. Chief Judicial
Magistrate, Dalsingsarai."
(emphasis supplied)
71. Accordingly, it was held that the Petitioner cannot be entitled
to the relief of the habeas corpus, which he was seeking, making it
clear that the petitioner is at liberty to avail the remedies as
available to him, in accordance with law.
72. In his supplementary judgment, Hon'ble the Chief Justice of
India had also in paragraph (21) held that two things are evident
from the record as follows;
"21. Firstly, the accused is involved in a criminal
case for which he has been arrested and produced
before the Magistrate and remanded to judicial
custody;
Secondly, the petitioner does not appear to
have made any application for grant of bail, even
when the remaining accused persons alleged to be
absconding and remain to be served. The net result is
that the petitioner continues to languish in jail."
73. In paragraph (22), the Hon'ble the Chief Justice of India was
further pleased to hold that;
"22. The only question with which we are concerned
within the above backdrop is whether the petitioner
can be said to be in the unlawful custody. Our answer
to that question is in the negative. The record which
we have carefully perused shows that the petitioner
is an accused facing prosecution for offences,
cognizance whereof has already been taken by the
competent Court. He is presently in custody
pursuant to the order of remand made by the said
Court. A writ of Habeas Corpus is, in the
circumstances, totally mis-placed. Having said that,
we are of the view that the petitioner could and
indeed ought to have filed an application for grant of
bail which prayer could be allowed by the Court
below, having regard to the nature of the offences
allegedly committed by the petitioner and the
attendant circumstances. The petitioner has for
whatever reasons chosen not to do so. He, instead,
has been advised to file the present petition in this
Court which is no substitute for his enlargement
from custody."
74. The last paragraph (23) of this judgment is very significant
and it puts a complete quietus to the entire controversy. It has been
categorically observed in this paragraph as follows;
"23. We are also of the view that the Magistrate has
acted rather mechanically in remanding the accused
petitioner herein to judicial custody without so much
as making sure that the remaining accused persons
are quickly served with the process of the Court
and/or produced before the Court for an early
disposal of the matter. The Magistrate appears to
have taken the process in a cavalier fashion that
betrays his insensitivity towards denial of personal
liberty of a citizen who is languishing in jail because
the police have taken no action for the apprehension
and production of the other accused persons. This
kind of apathy is regrettable to say the least. We also
find it difficult to accept the contention that the other
accused persons who all belong to one family have
absconded. The nature of the offences alleged to have
been committed is also not so serious as to probablise
the version of the respondent that the accused have
indeed absconded. Suffice it to say that the petitioner
is free to make an application for the grant of bail to
the Court concerned who shall consider the same no
sooner the same is filed and pass appropriate orders
thereon expeditiously."
ig (emphasis supplied)
75. Thus, it is clear that, even after finding that the Magistrate has
acted rather mechanically in remanding the petitioner/accused to
the judicial custody, and has taken the process in a cavalier fashion,
that betrayed his insensitivity towards denial of personal liberty of a
citizen, the Hon'ble Apex Court did not thought it fit to issue the writ
of habeas corpus. It is also significant to note that the Hon'ble Apex
Court has expressed its regrets towards the kind of apathy shown by
the Magistrate but even then the Hon'ble Apex Court did not issue
the writ of habeas corpus. It is also pertinent to note that though the
Hon'ble Apex Court opined that the nature of offences alleged to
have been committed by the Petitioner/accused is not so serious, so
as to probabilise the version of the Respondent that accused has
indeed absconded, despite that, the Hon'ble Apex Court refused to
grant the relief of writ of habeas corpus and observed that the
Petitioner was free to make an application for grant of bail to the
Court concerned who shall consider the same and pass an
appropriate order thereon expeditiously.
76. Thus, the legal position as laid down in this authority makes it
abundantly clear that even in respect of an illegal order of remand,
which was passed mechanically in a cavalier fashion also, the
remedy of writ of habeas corpus was not found to be appropriate
remedy, but the only remedy which Hon'ble Apex Court considered
appropriate was that of filing the application for bail.
77. Here in the instant case, as observed hereinabove, the order
passed by the Special Court of remanding the accused initially for
two days to the custody of Enforcement Directorate and thereafter
to the judicial custody clearly reflects the application of mind.
Elaborate reasons are given, while passing the orders of remand. In
such situation, there does not arise any question of this Court
invoking the extra ordinary remedy of writ jurisdiction, that too of
habeas corpus. Such relief can be asked only when the person is in
illegal detention, without the order of the Court. Once the person is
produced before the Magistrate and the order of remand is passed by
the Magistrate, that too after application of mind, as in the present
case, then the only remedy available to such person is that of an
application for his release on bail and not at all the writ of habeas
corpus. In the present case, having regard to the entire facts that the
Petitioner was arrested for the offence which is not only serious but
grave one. He was within 24 hours produced before the Special
Court. He has not at all raised any grievance, at that time, that his
arrest was not made following due procedure by law or not by
Competent Authority. For more than eight months, he did not utter a
single word challenging his arrest or detention. He sought the bail on
medical grounds to the Special Court and this Court and only when
his application(s) for bail came to be rejected by both the Courts,
now he is seeking the writ of habeas corpus, that too raising some
grounds. Needless to state that this Court is expected to exercise
some judicial restraint from passing any such order of releasing him
on bail, when the appropriate remedy of applying for the regular bail
or even bail on medical ground, if there is any change in
circumstance, still being available to him.
Interim Relief for Bail
78. Once it is held to be so, then, as regards the interim relief
claimed by the Petitioner for his release on bail on the medical
ground, also cannot be granted. We say so, not only because the
Petition for Habeas Corpus is not maintainable, but, we say so,
because already the Petitioner has, on this very medical ground,
applied for his release on regular bail, under Section 439 of the Code.
It is a matter of record that his application for bail filed before the
Special Court on 3rd May 2016 on the medical ground came to be
rejected by the Special Court vide its detail order on 13 th May 2016,
after considering all the contentions raised therein and being
satisfied that the Petitioner is given proper medical treatment,
which may be necessary. The copy of the said order is produced at
Exhibit "AA", page Nos.352 to 362, of the paper-book. In the said
application, it was brought to the notice of the Special Court by the
Respondents that the Petitioner was already taken to the J.J.
Hospital for his medical ailment and there necessary tests were
advised, for which he was taken to the private Bombay Hospital. The
detailed order of the Special Court reveals that, after considering
each and every aspect of the matter, Petitioner's application for bail
came to be rejected.
79. Petitioner has then preferred Criminal Bail Application before
this Court bearing Bail Application No.1050 of 2016. This application
was also considered and heard by the learned Single Judge of this
Court in detail and vide its order dated 16 th June 2016, rejected the
same on the count that the medical problems of the Petitioner are
adequately and more than sufficiently attended to by the concerned
Doctors in the J.J. Hospital and private Bombay Hospital.
80.
Thus, it is clear that, so far as the urgent relief, which the
Petitioner is seeking, of his release on medical ground, the Special
Court and this Court having considered the same and rejected the
same and no further change in the circumstances being brought to
our notice so as to reconsider the said prayer; especially, when it is
sought in the Writ of Habeas Corpus, Petitioner cannot be entitled to
such interim relief. As rightly submitted by learned Additional
Solicitor General, the Petitioner is having adequate alternate remedy
to redress his grievance, if any, either by approaching the Hon'ble
Apex Court against the order of the learned Single Judge of this
Court, or, even by filing fresh Bail Application on that ground.
Therefore, no case is made out even for grant of ad-interim relief of
his release on bail also.
Grounds of challenge to Arrest
81. However, as we have heard learned Senior Counsel for the
Petitioner and learned Additional Solicitor General for Respondent
Nos.1 to 3 on the merits of the Petition also, considering that this
Petition pertains to the personal liberty of the Petitioner, which is
sacrosanct under the Constitution of India and which should not be
affected in any way, without following the due process of law, we
deem it appropriate to proceed further for dealing with various
contentions raised in the Petition challenging alleged illegalities in
the Petitioner's arrest.
82. The first ground on which the arrest is challenged by the
Petitioner is that the offence punishable under Section 4 read with
Section 3 of PML Act is a non-cognizable one and, hence, without
permission of the competent Court, as required under Section
155(1) of the Code, the arrest could not have been effected. The
second ground pertains to his arrest, being not effected by the
Officer, duly authorized by the Central Government and, thirdly, the
procedural safeguards for the arrest, as laid down under the PML
Act and also under the Code, being not followed in the case.
Provisions of PML Act
83. Now, in order to consider and appreciate various contentions
raised on these three grounds, it would be necessary to first
consider, in detail, the provisions of PML Act, along with its object
and reasons and the purpose for which the said Act was brought on
the Statute Book.
84. It needs to be stated that the PML Act was enacted on 17 th
January 2003 to prevent the offences of money-laundering and to
provide for confiscation of property derived from, or involved in,
money-laundering and for matters connected therewith or incidental
thereto. In the 'Statement of Objects and Reasons' of the Act, it was
specifically stated that;
"It is being realized, world over, that money-
laundering poses a serious threat not only to the
financial systems of countries, but also to their
integrity and sovereignty".
85. The 'Statement of Objects and Reasons' further elaborates
some of the initiatives taken by the international community to
obviate such threat. One of those measures are stated to be "the
Political Declaration and Global Programme of Action, adopted by
United Nations General Assembly by its Resolution dated 23 rd
February 1999, inter alia, calling upon the member States to
develop mechanism to prevent financial institutions from being used
for laundering of drug related money and enactment of Legislation
to prevent such laundering." It was further stated that India is a
signatory to this declaration.
86. In paragraph No.2 of the 'Statement of Objects and Reasons', it
is stated that;
"In view of an urgent need for the enactment of a
comprehensive legislation, inter alia, for preventing
money- laundering and connected activities,
confiscation of proceeds of crime, setting up of
agencies and mechanisms for co-ordinating
measures for combating money-laundering etc., the
Prevention of Money Laundering Bill, 1998 was
introduced in the Lok Sabha on 4th August 1998."
87. In paragraph No.3 of the 'Statement of Objects and Reasons', it
was stated that though the conditions for enlargement on bail for the
offences punishable under the said Act are stringent, "considering
the recommendation of the Standing Committee, the Central
Government has proposed to relax the conditions prescribed for
grant of bail in respect of the person, who is below sixteen years of
age and or woman or sick or infirm". It is a matter of record that,
though the Act was enacted in the year 2003 itself, the Presidential
Notification for enforcement of the Act was not issued till the year
2005 and by way of Amendment Act No.20 of 2005, some
amendments were introduced in the Act, before it came to be
enforced, to remove the difficulties arisen in implementation of the
Act. The relevant amendment for the purpose of this Petition
pertains to omission of clause (a) of sub-section (1) of Section 45 of
the Prevention of Money-Laundering Act, 2002, which provided
that, "every offence punishable under the PML Act shall be
cognizable". The PML Act was subsequently amended again in the
year 2009 to expand the scope of the Act by adding certain offences
in Part 'A' and Part 'B' of the Schedule to the Act; to make provisions
for the "offences with cross border implications" and to add new Part
'C' in the Schedule of this Act for such offences; to ensure that the
Investigating Agency can attach any property, and to empower the
Enforcement Directorate to search the premises immediately after
the offence is registered etc.
88. As recently as in the year 2013, taking note of the fact that the
problem of money-laundering has become a global menace and it has
no longer restricted to the geopolitical boundaries of any country
and also considering the fact that India has become member of the
Financial Action Task Force, an Asia Pacific Group on Money-
Laundering, thereby evidencing its commitment to the effective
implementation and enforcement of internationally accepted
standards against money-laundering and the financing of terrorism,
the necessity was felt. To bring the Legislation of India relating to
Anti-Money-Laundering at par with the international standards and
to obviate some of the deficiencies in the Act that had been
experienced by the implementing agency, the Act was amended with
effect from 15th February 2013.
89. The Amendment Act, 2013, was intended also to enlarge the
definition of "Offence of Money-Laundering" to include therein the
activities, like, concealment, acquisition, possession and use of
proceeds of crime as criminal activities and remove existing limit of
Rs.5,00,000/- of fine under the Act. The Act was also amended to
make provision for attachment and confiscation of the proceeds of
crime even if there is no conviction, so long as it is proved that the
offence of money-laundering has taken place and property in
question is involved in money-laundering.
90. The Act was also amended for putting all the offences listed in
Parts 'A' and 'B' of the Schedule into Part 'A' of the Schedule, instead
of keeping them in two Parts, so that the provision of monetary
threshold does not apply to the offences.
91. Thus, as can be seen from the Legislative Intent, the
amendment in PML Act was carried out in order to make its
provisions more stricter and to enlarge the definition of "Money-
Laundering".
92. In this backdrop, if the provisions of PML Act are considered, it
can be seen that Section 2 of the PML Act contains the 'Definitions'
and the relevant definition for the purpose of this petition. The
definition of "Investigation", as given in sub-clause (na) of Section 2
of PML Act, is relevant, which reads as follows :-
"'Investigation includes, all the proceedings under this
Act conducted by the Director or by an authority
authorized by the Central Government under this Act for
the collection of evidence".
93. The definition of "money laundering", as given in sub-section
(p) thereof, assigns to it the same meaning as given in Section 3.
Section (3) of the PML Act defines the "offence of money-
laundering" as under:-
"Section 3 - Offence of Money-Laundering -
Whosoever directly or indirectly attempts to indulge
or knowingly assists or knowingly is a party or is
actually involved in any process or activity connected
with the proceeds of crime, including its concealment,
possession, acquisition or use and projecting or
claiming it as untainted property, shall be guilty of
offence of money-laundering."
94.
Chapter II, Section 4 of the PML Act provides for punishment
for money-laundering as follows;
"Whoever commits the offence of money-
laundering, shall be punishable with rigorous
imprisonment for a term which shall not be less
than three years, but which may extend to seven
years and shall also be liable to fine.
Provided that where the proceeds of crime involved
in money-laundering relates to any offence
specified under paragraph 2 of Part A of the
Schedule, the provisions of this section shall have
effect as if for the words "which may extend to
seven years", the words, "which may extend to ten
years" had been substituted."
95. Chapter III of the PML Act provides for "Attachment,
Adjudication and Confiscation of the Property, involved in Money-
Laundering", to which we are not presently concerned. Similarly,
Chapter IV of the PML Act, which deals with the "Obligations of
Banking Companies, Financial Institutions and Intermediaries", is
also not relevant for the purpose of this Petition.
96. Chapter V of the PML Act deals with the "summons, searches
and seizures etc." In this Chapter, Section 19 is of relevance, as it
deals with "power to arrest". It reads as follows :-
"Section 19 - Power to arrest -
(1) If the Director, Deputy Director, Assistant
Director or any other officer authorized in this
behalf by the Central Government by general or
special order, has on the basis of material in his
possession, reason to believe (that 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
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 of arrest to the Magistrate's
Court."
97. Section 22 of the PML Act deals with "presumption as to
records or property in certain cases" ; whereas, Section 24 of the
PML Act deals with "burden of proof". Both these provisions are of
some relevance and they read as follows :-
"Section 22 - Presumption as to Records or
Property in certain cases -
(1) Where any records or property are or is found in
the possession or control of any person in the
cause of a survey or a search, [or where any
record or property is produced by any person or
has been resumed or seized from the custody or
control of any person or has been frozen under
this Act or under any other law for the time being
in force,] it shall be presumed that-
(i) such records or property belong or belongs
to such person;
(ii) the contents of such records are true; and
(iii) the signature and every other part of such
records which purport to be in the
handwriting of any particular person or
which may reasonably be assumed to have
been signed by, or to be in the handwriting
of, any particular person, are in that
person's handwriting, and in the case of a
record, stamped, executed or attested, that
it was executed or attested by the person by
whom it purports to have been so stamped,
executed or attested.
(2) Where any records have been received from any
place outside India, duly authenticated by such
authority or person and in such manner as may
be prescribed, in the course of proceedings under
this Act, the Special Court, the Appellate
Tribunal or the Adjudicating Authority, as the
case may be, shall-
(a) presume, that the signature and every other
part of such record which purports to be in
the handwriting of any particular person or
which the Court may reasonable assume to
have been signed by, or to be in the
handwriting of, any particular person, is in
that person's handwriting; and in the case of
a record executed or attested, that it was
executed or attested by the person by whom
it purports to have been so executed or
attested;
(b) admit the document in evidence,
notwithstanding that it is not duly stamped,
if such document is otherwise admissible in
evidence.
Section 24 - Burden of Proof -
In any proceeding relating to proceeds of crime under
this Act -
(a) in the case of a person charged with the offence of
money-laundering under section 3, the Authority
or Court shall, unless the contrary is proved,
presume that such proceeds of crime are
involved in money-laundering; and
(b) in the case of any other person the Authority or
Court, may presume that such proceeds of crime
are involved in money-laundering."
98. Chapter VI contains provisions relating to "Appellate Tribunal"
and for the purpose of this Petition, the said provisions being not
relevant, not recited in detail. For our purposes, Chapter VII of PML
Act, which deals with "Establishment of Special Courts for Trial of
the Offence Punishable under Section 4 this Act" and Section 45
therein is of relevance, which reads as follows :-
"Section 45 - Offences to be cognizable and non-
bailable -
(1) Notwithstanding anything contained in the Code
of Criminal Procedure, 1973 (2 of 1974), no
person accused of an offence punishable for a
term of imprisonment of more than three years
under Part A of the Schedule shall be released
on bail or on his own bond unless-
(i) the Public Prosecutor has been given an
ig opportunity to oppose the application for
such release; and
(ii) where the Public Prosecutor opposes the
application, the Court is satisfied that
there are reasonable grounds for
believing that he is not guilty of such
offence and that he is not likely to commit
any offence while on bail:
Provided that a person, who is under the age of
sixteen years or is a woman or is sick or infirm,
may be released on bail, if the Special Court so
directs:
Provided further that the Special Court shall not
take cognizance of any offence punishable under
section 4 except upon a complaint in writing
made by-
(i) the Director; or
(ii) any officer of the Central Government or
State Government authorized in writing
in this behalf by the Central Government
by a general or a special order made in
this behalf by that Government.
(1-A) Notwithstanding anything contained in the Code
of Criminal Procedure, 1973 (2 of 1974), or any
other provision of this Act, no police officer shall
investigate into an offence under this Act unless
specifically authorized, by the Central
Government by a general or special order, and,
subject to such conditions as may be prescribed;
(2) The limitation on granting of bail specified in
[***] of sub-section (1) is in addition to the
limitations under the Code of Criminal
Procedure, 1973 (2 of 1974) or any other law for
the time being in force on granting of bail."
99. Chapter VIII of the PML Act deals with the "Authorities
established under the Act" and Sections 48 and 49 of the said
Chapter are of relevance and they are as follows :-
"Section 48 - Authorities under the Act -
There shall be the following classes of authorities for
the purposes of this Act, namely:-
(a) Director or Additional Director or Joint Director,
(b) Deputy Director,
(c) Assistant Director, and
(d) Such other class of officers as may be appointed
for the purposes of this Act.
Section 49 - Appointment and powers of
authorities and other officers -
(1) The Central Government may appoint such
persons as it thinks fit to be authorities for the
purposes of this Act.
(2) Without prejudice to the provisions of sub-section
(1), the Central Government may authorize the
Director or an Additional Director or a joint
Director or a Deputy Director or an Assistant
Director appointed under that sub-section to
appoint other authorities below the rank of an
Assistant Director.
(3) Subject to such conditions and limitations as the
Central Government may impose, an authority
may exercise the powers and discharge the duties
conferred or imposed on it under this Act."
100. Then comes Chapter IX of the PML Act, which deals with
"Reciprocal Arrangement for Assistance in Certain Matters and
Procedure for Attachment and Confiscation of Property" , which is
strictly speaking not relevant for the purpose of this Petition.
101. Chapter X of the PML Act, deals with "Miscellaneous
Provisions"; out of which, Section 65 of the Act, pertaining to
application of provisions of the Code, is of much relevance and it
reads as follows :-
"Section 65 - Code of criminal Procedure, 1973 to
apply -
The provisions of the Code of Criminal Procedure, 1973
(2 of 1974) shall apply, in so far as they are not
inconsistent with the provisions of this Act, to arrest,
search and seizure, attachment, confiscation,
investigation, prosecution and all other proceedings
under this Act."
102. Section 71 from the said Chapter, which gives "Overriding
Effect" to the provisions of PML Act is also of much relevance and it
reads as follows :-
"Section 71 - Act to have overriding effect -
The provisions of this Act shall have effect
notwithstanding anything inconsistent therewith
contained in any other law for the time being in force."
103. In addition to these provisions, the Legislature has also framed
various Rules, from time to time, laying down the procedure for
implementation of the provisions of PML Act. The relevant Rules for
the purpose of this Petition are pertaining to the "Prevention of
Money-Laundering Rules". In these Rules, the definition of
"Material" is of significance and it reads as under :-
"'Material' means any information or material in the
possession of the Director or Deputy Director or
Assistant Director or any authorized officer, as the case
may be, on the basis of which he has recorded reasons
under sub-section (1) of section 19 of the Act."
104. In these Rules itself, the definition of "Arresting Officer" is
given in Rule 2(c), which reads as follows :-
"'Arresting Officer' means the Director, Deputy Director,
Assistant Director or any other officer, authorized in
this behalf by the Central Government by general or
special order to exercise the power to arrest any person
under sub-section (1) of Section 19 of the Act."
105. Thus, the entire scheme of the PML Act makes it patently clear
that this Act is a complete Code in itself, thereby indicating that
Legislature intended that the procedure laid down here in is to be
followed in respect of the offences punishable under this Act. Section
71 of the Act makes it further clear by giving overriding effect to the
provisions of this Act vis-a-vis. the provisions of the Code or any
other Act. Thus, the provisions of the Code can be looked into only
and only when the provisions of this Act are silent as to the
particular aspects, such as 'arrest' etc. and provided that they are
not inconsistent with the provisions of this Act.
Offences under PML Act whether non-cognizable ?
106. In the light of these provisions of PML Act, the very first
contention raised by learned Senior Counsel for the Petitioner needs
to be considered, which pertains to the question whether the
offences under the PML Act are cognizable or non-cognizable.
Learned Additional Solicitor General for Respondent Nos.1 to 3 has
in this respect relied upon the head-note of Section 45 of the PML
Act, which states that the "offences are cognizable and non-bailable";
whereas, learned Senior Counsel for the Petitioner has relied upon
the amendment carried out to Section 45 of PML Act, in the year
2005 omitting clause (a) of sub-section (1) of Section 45, which
provided that, "every offence punishable under the PML Act shall be
cognizable". According to learned Senior Counsel for the Petitioner,
in view of this amendment, omitting clause (a) of sub-section (1) of
Section 45 of PML Act, the offences under the Act no more remain
cognizable. It is also urged that the head-note of the Sections is often
misleading and cannot be a guiding principle for interpreting the
provisions of the Act. To substantiate this submission, learned
Senior Counsel for the petitioner has relied upon the decision of the
Hon'ble Apex Court in Guntaiah vs. Hambamma, (2005) 6 SCC 228,
wherein, the Hon'ble Apex Court has relied upon following
observations of a Privy Council Judgment in Chandler vs. D.P.P. (All
ER pp. 145 I-146 A-B)-
"In my view, sidenotes cannot be used as an aid to
construction. They are mere catchwords and I have
never heard... that an amendment to alter a sidenote
could be proposed in either House... So sidenotes
cannot be said to be enacted in the same sense as the
long title or any part of the body of the Act."
107. Learned Senior Counsel for the Petitioner has then further
relied upon the decision of the Hon'ble Supreme Court in the case of
Union of India vs. National Federation of the Blind & ors., (2013) 10
SCC 772, wherein, the Hon'ble Apex Court found that the heading or
marginal note would not play any crucial role in interpretation,
while observing that;
"45. It is clear that when the provision is plainly
worded and unambiguous, it has to be interpreted in
such a way that the court must avoid the danger of a
prior determination of the meaning of a provision
based on their own preconceived notions of
ideological structure or scheme into which the
provision to be interpreted is somehow fitted. While
interpreting the provisions, the court only interprets
the law and cannot legislate it. It is the function of the
legislature to amend, modify or repeal it, if deemed
necessary.
46. The heading of a section or marginal note may be
relied upon to clear any doubt or ambiguity in the
interpretation of the provision and to discern the
legislative intent. However, when the section is clear
and unambiguous, there is no need to traverse
beyond those words, hence, the headings or marginal
notes cannot control the meaning of the body of the
section. Therefore, the contention of Respondent 1
herein that the heading of Section 33 of the Act is
"Reservation of posts" will not play a crucial role,
when the section is clear and unambiguous."
ig (emphasis supplied)
108. As against it, learned Additional Solicitor General has placed
reliance on the decision of the Hon'ble Apex Court in the case of
Eastern Coalfields Ltd. vs. Sanjay Transport Agency and anr.,
(2009) 7 SCC 345, wherein, while dealing with the interpretation of
the provisions of Section 2(1)(b) and Section 11(6) of Arbitration
and Conciliation Act, 1996, the Hon'ble Apex Court was pleased to
observe in paragraph (6) as follows;
"It is well settled rule of interpretation that the
section heading or marginal note can be relied upon
to clear any doubt or ambiguity in the interpretation
of any provision and to discern the legislative intent.
The section heading constitutes an important part of
the Act itself, and may be read not only as explaining
the provisions of the section, but it also affords a
better key to the constructions of the provisions of
the section which follows than might be afforded
by a mere preamble."
(emphasis supplied)
109. Therefore, as held in both these decisions, head-note is
important to clear any doubt or ambiguity in the interpretation of
the provision and to discern the legislative intent. Further as held
therein, the Section-heading constitutes on important part of the Act
itself, as it not only explains the provisions of the section but it also
affords key to the construction of the provision. Here in the case, it
is pertinent to note that the Legislature has, though deleted Clause
(a) of Sub-Section (1) of Section 45 of PML Act, it has not changed
the heading, thereby giving clear indication that Legislature did not
intend to make the offence "non-cognizable" but only wanted to clear
the conflict between the powers of arrest as regards police and the
authorities established under the Act.
110. This intent of the legislature can be definitely gathered from
the object and reasons, in the light of the Parliamentary debates,
when the particular legislation was introduced and passed. The law
is fairly well settled to that effect.
111. Learned Senior Counsel for the Petitioner has also produced
on record the copies of the transcripts of the 'Debates' that took
place in the Parliament when this Amendment Act No.20 of 2005
was introduced. In our considered opinion, it would be necessary to
reproduce the relevant portion under which the "Bill to Amend the
PML Act" was introduced by the then Minister of Finance. In
paragraph No.2 of his statement, the then Minister of Finance has
stated that;
"Under the existing provisions in Section 45 of the
Act, every offence is cognizable. If an offence is
cognizable, then any police officer in India can arrest
an offender without warrant. At the same time,
under Section 19 of the Act, only a Director or a
Deputy Director or an Assistant Director or any
other officer authorized, may arrest an offender.
Clearly, there was a conflict between these two
provisions. Under Section 45(1)(b) of the Act, the
Special Court shall not take cognizance of any offence
punishable under Section 4, except upon a complaint
made in writing by the Director or any other officer
authorized by the Central Government. So, what
would happen to an arrest made by any police officer
in the case of a cognizable offence? Which is the
Court that will try the offence? Clearly, there were
inconsistencies in these provisions. They have now
been removed. We have now enabled only the
Director or an officer authorized by him to
investigate offences. Of course, we would, by rule, set
up a threshold; and, below that threshold, we would
allow State police officers also to take action."
(emphasis supplied)
112. Thus, bare perusal of the statement made by the then Finance
Minister, while introducing this amendment in Section 45(1) of the
Act, makes it clear that, as it was apprehended that if the offence is
cognizable, then any Police Officer in India can arrest an offender
without warrant; whereas, Section 19 of the PML Act authorizes
only certain authorities, like Director or a Deputy Director or an
Assistant Director or any other officer authorized, to arrest an
offender, there was a conflict between the two provisions and in view
thereof, it was felt that it was necessary to remove such conflict.
This necessity was also felt on the ground, that under Section 45(1)
(b) of the PML Act, the Special Court can take cognizance of an
offence punishable under Section 4 thereof, only upon a complaint
made in writing by the Director or any other officer authorized by
the Central Government. Hence, it was apprehended as to "what
would happen to an arrest made by the Police Officer in the case of a
cognizable offence?; which is the Court that will try such offence?"
Hence, in view of this clear inconsistency, it was thought fit to
enable, only a Director or an officer authorized by him to investigate
into the offences and, therefore, the provision in sub-clause (a) of
Section 1 of Section 45 making the offence cognizable, was sought to
be omitted.
113. Therefore, this statement, which was made by the then
Finance Minster in the Parliament, while introducing the
Amendment of 2005 to the Act, on which much reliance is placed by
learned Senior Counsel for the Petitioner, makes it clear that the
intention to delete the provision making the offence cognizable was
only to ensure that there should not be any conflict between the
power of the Police Officer, who can arrest, in cognizable offence,
without warrant and the authority established under Section 19 of
the PML Act, who can arrest on conditions being satisfied, as laid
down therein.
114. Thus, it necessarily follows that the intention of the
Legislature in deleting sub-clause (a) of sub-section (1) of Section 45
of the PML Act was not, in any way, to make it "non-cognizable" as
such, irrespective of the provisions of the Code, which make the
offence punishable above the imprisonment of three years as
cognizable offence, but to ensure that, as a specific authority is
authorized to arrest the person accused under the PML Act, Police
Officer should not arrest the person accused under the provisions of
this Act.
115. That appears to be the reason why the heading of Section 45
was not changed. If the legislature really intended to make the
offence non-cognizable, there was no difficulty for legislature to
amend the heading of Section 45. The very fact that the legislature
has neither amended the heading nor made any positive statement
or assertion that the offences are non-cognizable makes it necessary
to infer that the legislature did not intended to do so.
116. At this stage, it may be also relevant, to refer to the definition
of "cognizable offence" and "non-cognizable offence", as laid down in
Section 2(l) of the Code, which reads as follows :-
"Section 2(c) - Cognizable Offence -
"Cognizable Offence" means an offence for which, and
"cognizable case" means a case in which, a police
officer may, in accordance with the First Schedule or
under any other law for the time being in force, arrest
without warrant."
"Section 2(l) - Non-cognizable Offence -
"Non-Cognizable Offence" means an offence for which,
and "non-cognizable case" means a case in which, a
police officer has no authority to arrest without
warrant."
117. In view of this definition of "cognizable offence", it is clear that
if the offence falls under the First Schedule of the Code or under any
other law for the time being in force, the Police Officer may arrest
without warrant. The 'First Schedule' of the Code specifically
provides classification of the offences, which are "cognizable" or
"non-cognizable"; bailable or non-bailable and triable by which Court
according to the punishment, which is provided for the said offences.
Under Part II of the First Schedule, "Classification of Offences against
Other Laws" provides that, "offences punishable with imprisonment
for more than three years or upwards would be cognizable and non-
bailable".
118. In the instant case, the offence under Section 4 r/w. Section 3
of the PML Act, as reproduced above, is punishable with
imprisonment for more than three years and which may extend upto
seven years or even upto ten years, as the case may be. Therefore, in
view of Part II of the First Schedule of the Code, the said offence
becomes cognizable. Therefore, merely because sub-clause (a) of sub-
section (1) of Section 45 of the PML Act is omitted / deleted, in view
of the Amendment Act of 2005, the offence cannot automatically
become non-cognizable. In the first place, the said clause was deleted
merely with an intention to ensure that there should be no conflict in
the power of arrest exercised by the Police Officers and the
authorities authorized under the PML Act. The deletion of the clause
(a) was, therefore, only with that specific intention and not to state
that all the offences under the Act have to be treated now as "non-
cognizable". The, Legislature, by way of amendment, had not
prescribed in positive terms that on account of deletion of clause (a)
of sub-section (1) of Section 45, now all the offences under the PML
Act have become non-cognizable. There is no positive assertion to
that effect, even after the amendment was introduced. Hence it has
tobe held that, even if one ignores the heading of Section 45, then as
it follows that in the absence of any positive assertion of making the
offence cognizable, the PML Act is silent about it.
119. As a result, when the Special Act like PML Act, dealing with
the offences stated therein, is silent about the cognizability or non-
cognizability of those offences, the provisions of the Code will
prevail, in view of Section 65 of the PML Act, which provides that
the provisions of the Code shall apply, in so far, as they are not
inconsistent with the provisions of the PML Act, in respect of arrest,
search, seizure, attachment, confiscation, investigation, prosecution
and all other proceedings under this Act. Section 4 and 5 of Code
also provide that;
"4. Trial of offences under the Indian Penal Code
and other laws-
(1) All offences under the Indian Penal Code (45
of 1860) shall be investigated, inquired into,
tried, and otherwise dealt with according to
the provisions hereinafter contained.
(2) All offences under any other law shall be
investigated, inquired into, tried, and
otherwise dealt with according to the same
provisions, but subject to any enactment for
the time being in force regulating the
manner or place of investigating, inquiring
into, trying or otherwise dealing with such
offences.
5. Saving -
Nothing contained in this Code shall, in the
absence of a specific provision to the
contrary, affect any special or local law for
the time being in force, or any special
jurisdiction or power conferred, or any
special form of procedure prescribed, by any
other law for the time being in force."
120. Therefore, accepting that sub-clause (a) of sub-section (1) of
Section 45 of PML Act is deleted and as a result, now the provisions
of PML Act are silent as to whether the offence is cognizable or non-
cognizable, the recourse has to be taken to the provisions of Section
65 of the PML Act and Section 4(2) and 5 of the Code to hold that, in
view of Part II of 'First Schedule' of the Code, the offence under this
Act being punishable with imprisonment for more than three years
and extending upto seven years, the offence has become cognizable.
121. As a matter of fact, in our considered opinion, there is also no
need to enter into this aspect whether the offences under this Act
are cognizable or non-cognizable, because Section 19 of the PML Act
is very much clear. The said provision clearly confers power on the
authorized officer to arrest any person, if the authority has reason
to believe, on the basis of the material in its possession, that a
person has been guilty of an offence punishable under the said Act.
Thus, it is clear that, the moment, the authority under the Act
arrives at such reason to believe on the basis of the material in its
possession that a person has been guilty of an offence under the Act,
such authority can arrest the person. In other words, the 'power of
arrest' under Section 19 of PML Act does not depend upon whether
the offence is cognizable or non-cognizable. This power of arrest u/s.
19 is, not in any way circumscribed or qualified, depending upon the
nature of the offence or the punishment prescribed therefor or its
cognizibility or non-cognizibility. Section 19, lays down conversely,
in clinching and un-flinching words that the only three conditions
which are necessary for the arrest of the person for the offence
under the provisions of this Act, firstly, the reason to believe on the
part of the authorized officer that any person has been guilty of the
offence punishable under this Act and second condition is that such
reason is on the basis of the material in his possession and the third
condition is that reason for such belief is recorded in writing. This
section nowhere contemplates or states that, only when the offence
is cognizable, such officer can effect the arrest. Even the
Amendment Act of 2005, which deletes clause (a) of sub-section (1)
of Section 45, nowhere states that in view of this deletion of clause
(a), the power of arrest, to be exercised under Section 19, is no more
available unless the offence is cognizable and such a power will not
be available now, as the offence is being made non-cognizable.
122. Even the statement made in the Parliament by the then
Finance Minister does not restrict power of arrest of the authorized
authority under Section 19 of the PML Act depending upon
cognizability or non-cognizability or depending upon punishment
prescribed for the offence. On the contrary, the amendment was
sought to be introduced only to confirm the power of Authorised
Officer of arrest and to ensure that the Police Officer does not
exercise that power. With that intention only, it was found necessary
to delete clause (a) of sub-section (1) of Section 45 of the PML Act,
which was making the offence cognizable and in which case, the
Police Officer would have exercised that power. Therefore, in our
opinion, even the Amendment Act of 2005, nowhere restricts the
power of arrest of the authorized authority conferred under Section
19 of the PML Act, irrespective of the question whether the offence is
cognizable or non-cognizable.
123. It is obviate that if the intention of the Legislature was to
restrict such power of arrest of even the authorized officer in respect
of the offence punishable under this Act, there was no difficulty for
the Legislature to do so when the Amendment Act of 2005 was
introduced; even before the Act of 2002 was notified. The very fact
that the Legislature has not done so and has also not intended to do
so, as can be seen from the statement made by the then Minister of
Finance in the Parliament, makes it necessary to infer that
Legislature did not intend to curb the power of arrest, which was
given to the authority under Section 19 of the PML Act; whether
such offence was cognizable or non-cognizable. In such situation, in
our considered opinion, this argument relating to whether the
offence under the PML Act is cognizable or non-cognizable becomes
merely of an academic interest.
Compliance with provisions of the Code of Criminal Procedure
124. In our considered view, for the same reason the question,
'whether the arresting authority was required to follow the
procedure laid down in Section 155(1) of the Code', becomes
redundant.
125. Section 155(1) of the Code falls in Chapter XII of the Code,
which pertains to the "information given to the Police and their
powers to investigate". Section 154 of the Code deals with
"information in cognizable offences", where Police are required to
register the offence when any information relating to commission of
cognizable offence is given orally or in writing; whereas, Section 155
of the Code deals with "Information Relating to Non-Cognizable
Offence". As per Section 155(1) of the Code, whenever the
information as to non-cognizable offence is given, then, the Police
Officer cannot investigate into the same without the order of the
Magistrate, having power to try such case or commit such case for
trial. Much emphasis is led by learned Senior Counsel for the
Petitioner on the provisions of Section 155(1) of the Code to submit
that, if the offence is non-cognizable, then, even the authorities
under the PML Act could not have carried out investigation and
arrested the Petitioner without the order of the Magistrate.
126. As a corollary thereto, it is also argued that, even if the
offences under PML Act are held to be cognizable, then, in view of
the decision of the Apex Court in the case of Lalita Kumari (supra),
whenever information related to cognizable offence is given, the
Police is bound to register the offence and follow the procedure laid
down in the said Chapter. Hence, the moment such information of
the cognizable offence was received, FIR should have been registered
first and then only the Petitioner could have been arrested. In the
instant case, it is submitted that on the date of arrest of the
Petitioner, neither the FIR was registered, nor its copy was sent to
the Magistrate or the Special Court, nor any permission was
obtained from the Special Court for arrest of the Petitioner. Hence,
according to learned Senior Counsel for the Petitioner, on this count
also, the arrest of the Petitioner is required to be held as illegal.
127. In our considered opinion, however, the reliance placed by
learned Senior Counsel for the Petitioner, on the provisions
contained in Sections 154 to 173 in Chapter XII of the Code, is also
misplaced. These provisions in the Code are clearly made to be
applicable to the Police Officers, when they receive any information
relating to cognizable and non-cognizable offences. The very title of
Chapter XII of the Code states that "Police and Their Powers to
Investigate", thereby meaning that this Chapter concerns to the
restrictions on the powers of Police in respect of the information
received by them about commission of cognizable or non-cognizable
offence and, depending thereon, arrest of the concerned accused.
The provisions of this Chapter of the Code can be applied to the
offences punishable under the provisions of PML Act, only if the
provisions in PML Act are silent as regards the investigation and
arrest of person, who has been found to be guilty of committing the
offences punishable under the PML Act.
128. This is for the reason that of the PML Act gives overriding
effect to the provisions of PML Act. Section 71 of the PML Act clearly
lays down that, "the provisions of this Act shall have effect,
notwithstanding anything inconsistent therewith contained in any
other law for the time being in force". Section 65 of PML Act further
makes the position clear by stating that, "the provisions of the Code
shall apply, only if they are not inconsistent with the provisions of
PML Act, even as regards arrest, search and seizure, attachment,
confiscation, investigation, prosecution and all other proceedings
under the PML Act".
129. Therefore, if PML Act contains certain provisions relating to
arrest, then, the PML Act being a complete Code in itself and also
being a special law enacted with a particular object, in view of
Section 5 of the Code, the provisions of PML Act will prevail and will
have overriding effect on the provisions of the Code. The provisions
of the Code will apply, only if they are not inconsistent with the
provisions of PML Act.
130. Now the definition of the term 'investigation' as given in
Section 2 (na) of the PML Act includes all the proceedings under the
Act conducted by the Director by an Authority Authorised by the
Central Government under this Act for the collection of evidence.
Thus, investigation under this Act does not given any role to the
Police. It is to be conducted by the Authorities under the Act. Hence
as far as investigation is concerned, there is no scope for importing
the provisions of the Code, which apply to the Police Officers. Section
19 of the PML Act exclusively and specifically deals with the "power
to arrest" of the Authorised Officers for the offences punishable
under the PML Act. Therefore, when there are specific provisions
dealing with the investigation and power to arrest under the PML
Act itself, the provisions of the Code will not have any application.
131. At the costs of repetition also, it has to be stated that Section
19 of the PML Act does not contemplate either registration of FIR, on
receipt of information relating to cognizable offence or of obtaining
permission of the Magistrate in case of non-cognizable offence before
taking cognizance or before effecting arrest of the accused in respect
of any offence punishable under this Act. The only conditions, which
are laid down under Section 19 of PML Act, pertain to the reasonable
belief of the authority, which is on the basis of the material in its
possession. As a result, when there are no such restrictions on the
"power to arrest", as laid down under Section 19 of PML Act, it
cannot be accepted that the officer authorized to arrest under the
PML Act was, in addition to the procedure laid down in PML Act,
expected to follow the procedure laid down in the Code also, of
registering FIR or seeking permission of the Court in respect of non-
cognizable offence for arrest of the accused under this Act. If those
provisions of Chapter XII of the Code are to be read even in respect
of these offences, then, it follows that Section 19 of PML Act would be
rendered nugatory and that cannot be the intention of the
Legislature. The Court cannot make any special provision in the Act
as nugatory or infructuous by giving the interpretation which is not
warranted by the Legislature. As a matter of fact, the endeavour of
the Court should always be to ensure that the provisions enacted by
the Legislature are not rendered nugatory in any way.
132. It is pertinent to note that Section 19 of PML Act, which does
not contemplate the compliance with the procedure required to be
followed by the Police Officer under Chapter XII of the Code, is not
challenged in this Petition, as being ultra vires. In the absence of
such challenge raised and in view of the clear provision laid down in
Section 19 of PML Act, it cannot be accepted that the officer
authorized under the PML Act should have followed the procedure
laid down in Chapter XII of the Code, which is meant for Police
Officers, to be followed in respect of the informations received by
them.
133. Section 19(1) of the PML Act, at the cost of repetition, it has to
be stated that, does not contemplate lodging of complaint before
effecting arrest. It only contemplates the reason to believe, which
should be on the basis of material in possession. Here in the case,
there was ample material in possession of the arresting authority, on
the basis of which there was reason to believe that the Petitioner has
been guilty of an offence punishable under Section 4 read with
Section 3 of the PML Act. It is not controverted that after the arrest,
the copy of the order, along with the material in possession, was
forwarded to the executing authority in a sealed envelope and, as
stated above, it is also not disputed that immediately on the next
day, the Petitioner was produced before the Special Court.
134. In the instant case, what is pertinent to note is that the Rules
framed under PML Act, in detail, lay down the procedure to be
followed when the arrest is to be effected under Section 19 of the
PML Act. Those Rules are called as "The Prevention of Money-
Laundering (the Forms, Search and Seizure [or Freezing] and the
Manner of Forwarding the Reasons and Material to the Adjudicating
Authority, Impounding and Custody of Records and the Period of
Retention) Rules, 2005."
135. It is not disputed that the summons issued to the Petitioner
was as per Form 'V' as given in Rule 11. The Petitioner has also not
challenged any of the Rules or the Sections of PML Act and neither
any challenge has been made to the vires of PML Act, that it is
violative of any procedure established by law and that it is also
violative of the fundamental rights guaranteed under the
Constitution. Whatever challenge was raised to the provisions of
Sections 19 and 45 of PML Act in the earlier Petition has been given
up in this Petition and, therefore, when the procedure, as laid down
in these Rules, has been not disputed to be valid and there is no
challenge to the said Rules, then, there remains hardly any
substance in the grievance raised by the Petitioner that his
fundamental rights have been violated. The arrest order, as
prescribed in 'Form III' under Rule 6, and the manner of forwarding
the copy of the order of arrest and material to the adjudicating
authority as laid down in the Rules is complied with in this case.
136. Once it is held that the Act itself provides for a complete
procedure to be followed whenever the arrest is to be effected and
such procedure being followed in the instant case, it can hardly be
accepted that the arrest or detention of the Petitioner is, in any way,
illegal or without jurisdiction, so as to invoke the extra-ordinary writ
remedy and that too of a habeas corpus; especially when the writ of
habeas corpus is to lie whenever there is reason to believe that the
person is in illegal detention; whereas, in the instant case, the
Petitioner is arrested and detained for commission of specific
offences. His detention is also validated by the order passed by the
Special Court and as such, his detention cannot be called as illegal,
far remain null and void, so as, for the Constitutional Court to
exercise its extra-ordinary powers under writ jurisdiction;
especially, when the Petitioner has already approached the
competent Special Court and this Court also, for his release on bail
and the said relief having been rejected with valid reasons by both
the Courts.
137. As regards the reliance placed by learned Senior Counsel for
the Petitioner on the landmark decision of the Hon'ble Apex Court in
the case of Lalita Kumari (supra), it is also pertinent to note that the
important issue, which was raised for consideration in the said
decision, was, "whether a Police Officer is bound to register an FIR
upon receiving any information relating to commission of a
cognizable offence under Section 154 of Cr.P.C. or the Police Officer
has the power to conduct a preliminary inquiry in order to test the
veracity of such information before registering the same?"
Therefore, it is apparent that the issue raised before the
Constitutional Bench of the Hon'ble Apex Court in this Judgment
was totally different, which pertained to the bounden duty of the
Police Officer of registration of the FIR on receipt of the information
of cognizable offence and in that context, in paragraph No.120 of its
Judgment, it was laid down by the Hon'ble Supreme Court that, "the
registration of FIR is mandatory under Section 154 of the Code, if
information discloses commission of cognizable offence and no
preliminary inquiry is permissible in such situation". This decision
nowhere deals with the powers of the authorities established under
Section 19 of PML Act or the procedure, which is laid down in PML
Act, in respect of arrest of the accused person.
138. As to the reliance placed by learned Senior Counsel for the
Petitioner on the Judgment of Om Prakash (supra), again the issue
raised before the Hon'ble Apex Court in the said Judgment was
totally different. As can be seen from the opening paragraph of the
said Judgment, the issue raised before the Apex Court was relating
to the provisions of the Customs Act, 1962 and the provisions of
Central Excise Act, 1944. The common question in these two sets of
matters was, as stated by the Hon'ble Apex Court, ' since all the
offences under the Central Excise Act, 1944 and the Customs Act,
1962 are non-cognizable, are such offences bailable?'
139. In that context, it was found that the provisions of both these
Acts in that regard were in pari materia to each other and provisions
of both the Acts provided that certain offences therein were non-
cognizable. While dealing with the contentions raised before it, the
Hon'ble Apex Court has considered relevant provision of Section 9-
A(1) of the Central Excise Act, 1944, which reads as follows :-
"9A.Certain Offences to be Non-Cognizable.-
(1) Notwithstanding anything contained in the
Code of Criminal Procedure, 1898 (5 of 1898),
offences under Section 9 shall be deemed to be
non-cognizable within the meaning of that
Code."
140. In view thereof, it was held that, this " non-obstanti clause",
with which the Section begins, in very categorical terms, makes it
clear that "notwithstanding anything" contained in the Code,
offences under Section 9 of Central Excise Act, 1944 would be
deemed to be non-cognizable within the meaning of the Code. As
against it, in the case of PML Act there is no such section containing
positive assertion that the offences under the Act are non-
cognizable, notwithstanding anything contained in the Code. There
is also no judicial pronouncement to that effect from the Hon'ble
Apex Court. As pointed out by learned Senior Counsel for the
Petitioner that issue is pending for consideration before the Hon'ble
Apex Court.
141. The Hon'ble Apex Court has in this judgment of Omprakash
(supra), then also dealt with Sections 13, 18, 19, 20 and 21 of the
said Central Excise Act, 1944, which read follows :-
"13. Power to Arrest -
(1) Any Central Excise Officer not below the
rank of Inspector of Central Excise may,
with the prior approval of the Commissioner
of Central Excise may, arrest any person
whom he has reason to believe to be liable to
punishment under this Act or the Rules
made thereunder."
18. Searches and Arrests How to be Made -
All searches made under this Act or any Rule
made thereunder and all arrests made under this
Act shall be carried out in accordance with the
provisions of the Code of Criminal Procedure,
1973 (2 of 1974), relating respectively to
searches and arrests made under that Code."
(emphasis supplied)
19. Disposal of Persons Arrested -
Every person arrested under this Act shall be
forwarded without delay to the nearest Central
Excise Officer empowered to send persons so
arrested to a Magistrate, or, if there is no such
Central Excise Officer within a reasonable
distance, to the officer-in-charge of the nearest
police station."
"20.Procedure to be followed by officer-in-charge
of police station.-
The officer-in-charge of a police station to whom
any person is forwarded under Section 19 shall
either admit him to bail to appear before the
Magistrate having jurisdiction, or in default of bail
forward him in custody to such Magistrate."
"21. Inquiry how to be made by Central Excise
Officers against arrested persons forwarded to
them under Section 19. -
(1) When any person is forwarded under
Section 19 to a Central Excise Officer
empowered to send persons so arrested to a
Magistrate, the Central Excise Officer shall
proceed to inquire into the charge against
him.
(2) For this purpose the Central Excise Officer
may exercise the same powers and shall be
subject to the same provisions as the officer-
in-charge of a police station may exercise
and is subject to under the Code of Criminal
Procedure, 1898 (5 of 1898), when
investigating a cognizable case:
Provided that -
(a) if the Central Excise Officer is of
opinion that there is sufficient
evidence or reasonable ground of
suspicion against the accused person,
he shall either admit him to bail to
appear before a Magistrate having
jurisdiction in the case, or forward
him in custody to such Magistrate;
(b) if it appears to the Central Excise
Officer that there is no sufficient
evidence or reasonable ground of
suspicion against the accused person,
he shall release the accused person on
his executing a bond, with or without
sureties as the Central Excise Officer
may direct, to appear, if and when so
required, before the Magistrate having
ig jurisdiction, and shall make a full
report of all the particulars of the case
to his official superior."
142. In the light of all these relevant provisions of Section 9A
making the offences non-cognizable, notwithstanding anything
contained in the Code and Section 18 making it mandatory, as use of
the word "shall" denote, that all the arrests made under those Act's
shall be carried out in accordance with the provisions of the Code
and Section 19 of the said Act providing that the person arrested
shall be forwarded to the Officer-in-Charge of nearest Police Station,
it was held by the Hon'ble Apex Court that; as all the searches and
arrests made under the said Act has to be carried out in accordance
with the provisions of the Code, the provision of Section 155 of the
Code, which deals with information relating to non-cognizable
offences also becomes applicable and hence it was held that in
respect of the information relating to non-cognizable offences, in
view of Section 155(1) of the Code, investigation cannot be
commenced or a person cannot be arrested without a warrant for
such arrest. In the light thereof, the provisions of Section 41 of the
Code, wherein the Police Officer cannot arrest without an order from
the Magistrate and without a warrant, were dealt with. In this
context, it was held, in paragraph No.41, that, "in respect of a non-
cognizable offence, a Police Officer and, in the instant case, an Excise
Officer, will have no authority to make arrest without obtaining a
warrant for the said purpose. The same provision is contained in
Section 41 of the Code, which specifies that, when a Police Officer
may arrest without an order from a Magistrate and without a
warrant, having regard to the specific provisions of Section 18 of the
Central Excise Act, 1944, which mandated that all arrests made
under the said Act shall be carried out in accordance with the
provisions of the Code."
143. It thus needs to be emphasized that in view of Section 9A of
the Central Excise Act making all the offences under the said Act as
non-cognizable and in view of Section 18 of the said Act positively
making the provisions of the Code relating to arrest being made
applicable to arrest under the said Act, it was held in the case of Om
Prakash (supra) that Excise Officer has to follow those provisions.
There are no such pari materia provisions in PML Act. The PML Act
does not make the offences there under 'non-cognizable',
notwithstanding anything contained in the Criminal Procedure Code,
nor PML Act provides that all the arrests under the Act are to be
made in accordance with the provisions of the Code. Conversely in
PML Act, there is separate Section 19 relating to arrest and Section
71 giving overriding effect to the provisions of PML Act above the
provisions of the Code or any other law.
144. According to learned Senior Counsel for the Petitioner, in the
case of Om Prakash (supra), the argument advanced by learned
Additional Solicitor General therein, that as the authorities under
the Customs Act, 1962 and Central Excise Act, 1944 do not derive
their powers from the Code, but under the Special Statutes, such as
Central Excise Act and Customs Act, hence they are not bound by
the provisions of the Code, was rejected. The Review Petition
preferred against the said Judgment also came to be rejected. Hence,
according to him, the provisions in the Code relating to arrest of
accused in case of non-bailable offence are applicable not only to
Police Officers, but to the authorities established under other Acts
also, like, Customs Act, 1962, Central Excise Act, 1944 and in this
Petition, the authorities under PML Act also. According to him, in
this case, as these provisions of the Code were not followed in
effecting the arrest of the Petitioner, arrest of the Petitioner is
illegal.
145. However, in our considered opinion, this line of argument is
misconceived as in the PML Act, there is no such provision, like
Section 18 of the Central Excise Act, 1944, laying down that arrest
under PML Act shall be carried out in accordance with the
provisions of the Code. The conspicuous absence of such provision
like Section 18 of the Central Excise Act, 1944 in PML Act, is a very
relevant aspect for deciding the issue, 'whether the authorities
under the PML Act, like the authorities under the Customs Act,
1962 and Central Excise Act, 1944, are also bound by the provisions
of the Code relating to arrest and investigation?'
146. In our considered opinion, therefore, once it is held that such
provision like Section 18 of the Central Excise Act, 1944, is not
appearing and is conspicuous by its absence in PML Act, then, one
has to go by the provisions of the PML Act only, as Section 71 thereof
is giving overriding effect to the said provisions. Section 19 of the
PML Act, as stated above, does not contemplate at all the procedure,
as laid down in Sections 18 to 21 of the Central Excise Act, 1944. The
only two conditions contemplated under Section 19 of PML Act,
being the reasonable belief, based on the material in possession of
the authorized officer, on the satisfaction of which the authorized
officer can arrest. In such situation, importing the provisions of the
Central Excise Act, 1944 or Customs Act, 1962 in PML Act, would be
reading something which is not there in the Statute itself. Such
interpretation, therefore, cannot be accepted. In our considered
opinion, therefore, this Judgment in the case of Om Prakash (supra)
cannot be of any avail to the Petitioner, as, in the first place, it deals
with the question, "whether the offences under the Customs Act,
1962 and Central Excise Act, 1944, are bailable or not?" , and,
secondly, the provisions of Customs Act, 1962 and Central Excise
Act, 1944, are totally different from the provisions of PML Act, as
the objects and reasons for bringing these Statutes are also different.
147. Even the emphasis placed by learned Senior Counsel for the
Petitioner on the Judgment of the Hon'ble Apex Court in the case of
Directorate of Enforcement Vs. Deepak Mahajan & Anr., (1994) 3
SCC 440, is also misplaced as the salient and indeed substantial
question, which involved for determination, in the said Appeal was
formulated as follows :-
"Whether a Magistrate before whom a person
arrested under sub-section (1) of Section 35 of the
Foreign Exchange Regulation Act of 1973 which is in
pari materia with sub-section (1) of Section 104 of
the Customs Act of 1962, is produced under sub-
section (2) of Section 35 of the Foreign Exchange
Regulation Act, has jurisdiction to authorize
detention of that person under Section 167(2) of the
Code of Criminal Procedure?"
148. Therefore, it is apparent that in the said decision, the
provisions of sub-section (1) of Section 35 of Foreign Exchange
Regulation Act, 1973, (for short, "FEMA"), which were pari materia,
with sub-section (1) of Section 104 of the Customs Act, 1962 were
for consideration before the Apex Court. Hence, in the light of the
provisions of Section 167(2) of the Code, while deciding the said
question, it was held that, even in respect of the person arrested
under the FEMA or Customs Act, the provisions of Section 167(2) of
the Code are having mandatory application. Thus, this decision does
not pertain to the 'power of arrest', but to the provisions of Section
167 of the Code, which pertain to the custodial detention. It is also
pertinent to note that provisions of the Code were resorted to in this
judgment in the aid of implementation of the provisions of the
Customs Act and not to create hindrance in implementation of the
said Act. It would be necessary in this respect to refer to the
observations made by the Hon'ble Apex Court in paragraph No.23 of
the said Judgment. It was observed that;
"23. Keeping in view the cardinal principle of law that
every law is designed to further the ends of justice
but not to frustrate on the mere technicalities, we
shall deal with all those challenges in the
background of the principles of statutory
interpretations and of the purpose and the spirit of
the concerned Acts as gathered from their
intendment." (emphasis supplied)
149. Therefore, in our considered opinion, as this Judgment also
lays down that the provisions of law are to be interpreted to further
the ends of justice and not to be frustrated on the mere
technicalities, the provisions of PML Act are also required to be
interpreted with that objective in view and not allowed to be
frustrated by mere technicalities. Hence, when Section 19 of PML
Act gives wide powers to the authorized officer to arrest an accused
person, who is found to be guilty of having committed an offence
punishable under the said Act, said provision cannot be rendered
nugatory by importing the technicalities, so as to frustrate the object
of Legislature. Hence, this decision of the Hon'ble Apex Court also
cannot be of any help to the Petitioner, having regard to the fact that
Section 19 of PML Act gives the wide powers of arrest to the
authorized officer and the vires of the said provisions are not
challenged.
150. Learned Senior Counsel for the Petitioner, has then placed
reliance on the observations of the Hon'ble Apex Court in paragraph
60, in the case of, State of Haryana and ors. vs. Bhajanlal and ors.,
1992 Supp.(1) SCC 335, which read as follows;
"60. The sum and substance of the above
deliberation results in a conclusion that the
investigation of an offence is the field exclusively
reserved for the police officers whose powers in that
field are unfettered so long as the power to
investigate into the cognizable offences is
legitimately exercised in strict compliance with the
provisions falling under Chapter XII of the Code and
the courts are not justified in obliterating the track of
investigation when the investigating agencies are
well within their legal bounds as aforementioned.
Indeed, a noticeable feature of the scheme under
Chapter XIV of the Code is that a Magistrate is kept
in the picture at all stages of the police investigation
but he is not authorised to interfere with the actual
investigation or to direct the police how that
investigation is to be conducted. But if a police officer
transgresses the circumscribed limits and
improperly and illegally exercises his investigatory
powers in breach of any statutory provision causing
serious prejudice to the personal liberty and also
property of a citizen, then the court on being
approached by the person aggrieved for the redress
of any grievance, has to consider the nature and
extent of the breach and pass appropriate orders as
may be called for without leaving the citizens to the
mercy of police echelons since human dignity is a
dear value of our Constitution. It needs no emphasis
that no one can demand absolute immunity even if
he is wrong and claim unquestionable right and
unlimited powers exercisable up to unfathomable
cosmos. Any recognition of such power will be
tantamount to recognition of 'Divine Power' which no
authority on earth can enjoy."
151. There can hardly be any dispute or two opinions about the
legal proposition laid down in this authority that that the police
should exercise the investigatory powers by following statutory
provisions so as to not cause any serious prejudice to the personal
liberty and also property of a citizen. However, in the instant case,
the perusal of the remand orders does not reflect that there was
breach of any statutory provisions, so as to cause any serious
prejudice to the liberty of the Petitioner.
152. In this respect, reliance placed by learned Senior Counsel for
the Petitioner on the decision of Punjab and Haryana High Court, in
the case of Gorav Kathuria vs. Union of India and ors. In Criminal
W.P.No.595 of 2016 is also misplaced. The reason for the same is that
the said decision pertains to the petition which has challenged the
vires of firstly, Section 2(y)(ii) of PML Act as amended vide Section
45(ii) of the Finance Act, 2015, enhancing the monetary threshold
for the offences specified under Part B of the Schedule from the total
value involved in such offences from 'Rs.30 Lakhs or more' to 'Rs.
One Crore or more', and secondly the insertion of Section 132 of
Customs Act, 1962 in Part-B of the Schedule in PML Act, vide
Section 151 of the said Finance Act, 2015. The Petitioner, in that
case was an Advocate and was desirous of instituting Criminal Case
alleging duty evasion in import of Heavy Melting Scrap classifiable
under Customs Tariff Heading 7204 4900 at ICD Ludhiana and
laundering by the offender of the proceeds of crime so generated. It
was his contention that these amendments were unconstitutional
and ultra vires, unless read down so as to make them constitutional,
stringent and harmonious with the objects of PML Act.
153. While deciding these contentions raised before it by the
Petitioner, it was held by the Division Bench of Punjab and Haryana
High Court that the Petitioner is a third party and not the authority
established under the provisions of PML Act. The Division Bench
then considered the effect of the omission in Section 45(1) of words
"every offence punishable under this Act shall be cognizable" and
further considered whether Section 45(1) puts an embargo on grant
of bail in such offences. Thus, the judgment in case of Gorav
Kathuria (supra), necessarily pertains to the provisions relating to
the grant of Regular Bail under Section 45 of the PML Act.
Moreover, as stated in paragraph (13) of the judgment, this decision
pertains to the issue as to whether the Petitioner who was a third
party can file a composite private complaint to seek an order for
investigating the alleged schedule offence punishable under the
Customs Act, 1962 and also the offence under PML Act. This
judgment, therefore, though considers the decisions of the Hon'ble
Apex Court in the cases of Om Prakash vs. Union of India, (2011) 14
SCC 1 and Directorate of Enforcement vs. Deepak Mahajan, (1994)
3 SCC 440, it was particularly in the light of the issues raised before
it. In such situation, in our considered opinion, this judgment can be
of no avail to the Petitioner.
154. In the present case, in the first place, the Petitioner is not
seeking Regular Bail under Section 45 of PML Act but he is seeking
the relief of habeas corpus. Therefore, this decision in Gorav
Kathuria (supra), which deals with Section 45 of the PML Act
pertaining to regular bail, is of absolutely no help to the Petitioner.
Even accepting that the SLP preferred against the said judgment by
the Petitioner therein, challenging it on the count that he was
refused locus-standi to file such private complaint, was dismissed by
the Hon'ble Apex Court in Criminal Appeal No.737 of 2016 vide its
order dated 12th August, 2016, despite the Certificate granted by the
Punjab and Haryana High Court, in our considered opinion, as this
judgment and the issues raised therein were totally different and the
provisions of PML Act and other Acts were considered in the light of
the issues raised therein, this judgment cannot be of much help for
the purpose of deciding the issues raised in this petition, in which,
the Petitioner is claiming his release under the writ of habeas corpus
and not under regular bail under Section 45 of PML Act.
155. Even as regards the decision of Gautam Kundu vs. Manoj
Kumar, Criminal Appeal No.1706 of 2015, which is also considered in
the case of Gorav Kathuria (supra), in our considered opinion the
said judgment also pertains to the challenge raised by the Appellant
therein to the rejection of his application for bail under Section 439
of the CrPC and therefore, may not be of much help, as it also deals
with the provisions relating to Regular Bail and not the release on
count that arrest is illegal and therefore, the writ of habeas corpus.
However, what is relevant to know is that, in this judgment of
Gautam Kundu (Supra) the Hon'ble Apex Court has considered the
various objects and reasons of the PML Act, the presumption raised
in Section 24, of the Act casting burden of proof on the accused and
the rigors which the Petitioner has to overcome to get the relief of
bail under the said Act. In doing so, the Hon'ble Apex Court has
referred to its earlier decisions in Y.S. Jagan Mohan Reddy vs.
Central Bureau of Investigation, (2013) 7 SCC 439 and Union of
India vs. Hassan Ali Khan, (2011) 10 SCC 235, making it very clear
that offence under Section 4 of PML Act is of a serious nature, and
the burden of proof is shifted on the accused person to prove that the
monies were not the proceeds of crime and were not, therefore
tainted. In such situation, the Petitioner cannot by way of this Writ
of Habeas Corpus, side track or bye-pass these stringent provisions
of Regular Bail, to get his release.
156. Learned Senior Counsel for the Petitioner has, then also,
placed reliance on the Judgment of the Division Bench of Gujarat
High Court in the case of Rakesh Manekchand Kothari Vs. Union of
India & Ors., dated 3rd August 2015, in Special Criminal Application
(Habeas Corpus) No.4247 of 2015, wherein, on the basis of the
similar contentions, as raised in this Petition, the Division Bench of
Gujarat High Court was pleased to grant the relief of release of the
Petitioner therein. It is submitted that Special Leave to Appeal (Cri.)
No.9727 of 2015 preferred by the Union of India against the said
decision is already dismissed by the Apex Court vide its order dated
23rd November 2015. However, in our considered opinion, as this
Judgment is merely an order of interim nature and does not decide
the dispute involved therein finally, it has neither the persuasive
value, far remain the binding effect. In paragraph No.31 of the
judgment, Division Bench itself has stated that "we prima facie
agree with some of the arguments advanced by Mr.Vikram
Chaudhary, learned Advocate for the Petitioner". In view thereof,
regard was given to the peculiar facts of that case, which showed
that fraud has been committed by some of the accused, however, the
complaint did not show any material evidence, direct or
circumstantial against the Petitioner. It was found that "so far as the
Petitioner therein was concerned, there was no recovery or
discovery from or at the instance of the Petitioner. Barring
statements, there was no prima facie material evidence against the
Petitioner of any money laundering, despite the fact that he was in
custody for the last about 11 months". It was also noticed that "the
uncle of the Petitioner, who was alleged to have much higher role
and stated to be the main accused was on bail. Not only that, out of
89 accused persons and entities, all were on bail, except eight or
nine including the Petitioner". Hence, it was held that, "if about 80
out of 89 accused are ordered to join investigation under protection
of Court order, the Petitioner who had already undergone about 11
months is entitled to interim relief as prayed". Needless to state that
the facts of the present case are totally different, as in this case the
Petitioner, who is the then Ex-Minister in the State of Maharashtra
is alleged to be the master-mind and the kingpin in the money-
laundering of multi-crore. Therefore, the factors which weighed with
the Division Bench of Gujrat High Court in allowing the release of the
Petitioner in that case being totally different, the said decision needs
to be differentiated.
157. Similarly, the reliance placed by learned Senior Counsel for the
Petitioner on the order of Delhi High Court in the case of
Gurucharan Singh Vs. Union of India, in Criminal Writ Petition
No.307 of 2016, dated 27th April 2016, wherein also, similar
contentions raised by learned Senior Counsel for the Petitioner were
accepted at the interim stage; while admitting the Petition; and
granting interim relief, cannot be of much avail, as the observations
made therein are of a "prima facie nature" and not concluded or
decided finally. In paragraph No.43 of the judgment therefore, it was
specifically clarified that any opinion expressed at this stage is
primarily for the purposes of considering the prayers for the grant of
bail.
158. In this respect, learned Additional Solicitor General has rightly
placed reliance on the decision of the Punjab and Haryana High
Court in the case of Karam Singh and ors. vs. Union of India and
ors., CWP No.3317 of 2015, decided on 22 nd December, 2015, where
in, the Division Bench has considered the binding element of an
interim order in paragraph (21) of the judgment as follows;
"An interim order which does not finally and
conclusively decide an issue cannot be a precedent.
Any reasons assigned in support of such non-final
interim order containing prima facie findings, are
only tentative. Any interim directions issued on the
basis of such prima facie findings are temporary
arrangements to preserve the status quo till the
matter is finally decided, to ensure that the matter
does not become either infructuous or a fait accompli
before the final hearing."
159. It was
further held in this authority that whatever
observations are made in the interim order, being made on tentative
reasons, it is not possible to read such tentative reasons as final
conclusions.
160. In this petition, before the Division Bench of Punjab and
Haryana High Court, similar contentions were raised by the
Petitioner, challenging the summons issued to the Petitioner,
therein, by the Officers of Enforcement Directorate under Section
50(2) and (3) of the PML Act, on the ground that the offences are
non-cognizable in nature and in absence of any prior sanction/order
of Magistrate, the investigation being conducted by the said
authorities, is not justified. The Division Bench of the Punjab and
Haryana High Court was pleased to reject these contentions and
dismissed the petition by its final order. Hence this judgment being a
final authoritative pronouncement can be of more help. In this
Judgment of Division Bench of the Punjab and Haryana High Court,
after considering all the relevant case laws, which are cited by
learned Senior Counsel for the Petitioner in this case also, Division
Bench found no substance or reason to hold that offences under
PML Act are non-cognizable and the Authorities under the PML Act
have to follow the procedure laid down in the Code in respect of the
arrest under Section 19 of the Act.
161. In this judgment, the judgments of the Hon'ble Apex Court in
the case of Om Prakash and another vs. Union of India (supra),
Directorate of Enforcement vs. Deepak Mahajan (supra), Lalita
Kumari vs. Goverment of Utter Pradesh (supra) were considered in
detail and it was held the right to investigate under the Act is very
much part of the scheme of the Act. Hence the argument that the
offence is non cognizable as defined under Section 2(1) of CrPC
cannot be accepted. It was further held that if the argument raised
by learned Senior Counsel for the Petitioner was to be accepted, then
Section 19 which pertains to the Power of Arrest would be rendered
a dead letter on the statute book, if the offence under Section 3 is to
be treated as non-cognizable. We find the reasons given in the
Judgment of the Division Bench of Punjab and Haryana High Court
in this decision more in tune with the reasoning given by us, on the
analysis of the provisions of this Act vis-a-vis the provisions of the
other Acts and the Code.
162. As a result, we do not find any substance in the first ground
raised by learned Senior Counsel for the Petitioner challenging his
arrest as illegal.
Section 19 - Authority Competent to Arrest
163. Coming to the next grievance raised by the Petitioner that
Respondent No.2, the then Assistant Director of Enforcement
Department, who has effected his arrest, was not having the
authority to do so. It is submitted that as per Section 19 of the PML
Act, the power to arrest is conferred only on the Director, Deputy
Director, Assistant Director or any other officer authorized in this
behalf by the Central Government by general or special order. Here
in the case, it is submitted that no such notification is produced on
record to show that Respondent No.2 was authorized by the Central
Government to effect the arrest. It is urged that in the absence of
such notification, the arrest of the Petitioner, as effected by
Respondent No.2 is, ex-facie, illegal. It is submitted that Section
49(1) of the PML Act authorizes Central Government to appoint
such persons, as it thinks fit, be the authorities for the purpose of
this Act. As per Section 49(2) of PML Act, without prejudice to the
provisions of sub-section (1) thereof, the Central Government may
authorize the Director or Additional Director or Joint Director or a
Deputy Director or an Assistant Director, appointed under that sub-
section, to appoint other authorities below the rank of an Assistant
Director. It is urged that the relevant provision is sub-section (3) of
Section 49 of PML Act, which provides that, "subject to such
conditions and limitations, as the Central Government may impose,
an authority may exercise the powers and discharge the duties
conferred and imposed on it under this Act".
164. It is submitted that the only notification, which is issued by the
Central Government so far, is dated 1 st July 2005 and it confers
exclusive powers on the Director of Enforcement under FEMA,
holding office immediately before the said date. The relevant
notification is produced by the Petitioner at Exhibit-F, page No.129 of
the paper-book. It can be reproduced as follows;
The Gazette of India
Notification
New Delhi, the 1 st July, 2005
G.S.R.411(E).-In exercise of the powers conferred by
sub-section (1) of section 49 of the Prevention of
Money-Laundering Act, 2002 (15 of 2003), the Central
Government hereby appoints, with effect from the 1st
day of July, 2005, the Director of Enforcement holding
office immediately before the said date under the
Foreign Exchange Management Act, 1999 (42 of 1999),
as the Director to exercise the exclusive powers
conferred under section 5, section 8, section 16, section
17, section 18, section 19, section 20, section 21, sub-
section (1) of section 26, section 45, section 50, section
57, section 60, section 62 and section 63 of the said Act
and the said Director shall also concurrently exercise
powers conferred by sub-section (3), sub-section (4)
and sub-section (5) of section 26, section, 39, section,
40, section 41, section 42, section 48, section 49,
section 66 and section 69 of the aforesaid Act.
[Notification No.6/2005/F.No.6/2/2005-E.S.]
165. It is urged that in view of this notification "exclusive power" is
conferred on the Director of FEMA. No other notification is produced
conferring powers of arrest on Assistant Director. As such,
Respondent No.2, being Assistant Director, had no authority to effect
the arrest.
166. However, in our considered opinion, this submission also
cannot be accepted for the simple reason that the perusal of the said
notification, reveals that 'exclusive powers' conferred on Director
FEMA were not to the exclusion of other authorities established
under the Act. It is significant to note that under Section 19(1), the
authorities, which can exercise the power of arrest are clearly laid
down and they include "Assistant Director". Section 48 further
clarifies who are the authorities established under the Act and it also
includes the "Assistant Director". Therefore, their powers are not in
any way curtailed by the said circular but only for the proper
assignment by way of internal management this circular was issued,
considering that there were two Directors working in Enforcement
Directorate. Hence their powers and area of jurisdiction in respect of
implementation of the Act were divided. It was not issued in any way
to exclude the power of authorities established under the Act. It is
pertinent to note that this Notification is issued under Section under
Section 49(1) and not under Section 49(3) to impose any limitations
on the powers of the Authorities established under the Act. This
aspect is already considered in detail by the learned Single Judge of
this Court in the case of Sayed Mohamed Masood Vs. Dr.
Shanmugham, Directorate of Enforcement and Anr., in Criminal Bail
Application No.71 of 2013, dated 4th February 2013, wherein the
similar issue was raised relating to the power of arrest by the
Assistant Director. After considering the provisions of the Act, it was
rightly held by the learned Single Judge of this Court that "this
exclusive power conferred on the director of FEMA is not to the
exclusion of other authorities, which are specified in Section 19 of
the PML Act itself. The Director may be given exclusive powers, but
not to the exclusion of other authorities".
167. In this judgment the provisions of Section 48 of the PML Act,
which defines "Authorities under the Act" and Section 49 of the PML
Act, which deal with "Appointment and Powers of Authorities under
the Act" are elaborately dealt with. The provisions of Section 50 of
the PML Act, which deals with the "Powers of Authorities Regarding
Summons, Production of Documents and to Give Evidence etc." and
Section 51 relating to "Jurisdiction of Authorities", r/w. Section 52,
about the "Powers of the Central Government to Issue Directions" ,
are also considered and thereafter it was held that the Ministry of
Finance has appointed the Enforcement Director, as appointed
under sub-section (2) of Section 36 of FEMA, as 'Assistant Director'
for the purpose of PML Act and such order is issued in exercise of
powers conferred under sub-section (1) of Section 49 of PML Act.
168. In our considered view also having regard to the above
notification which is in force and subsequent notifications issued on
the same lines by the Ministry of Finance, Department of Revenue,
Central Government, and having regard to the definition of
"Assistant Director", as contained in Section 2(1)(c) of PML Act,
means "the Assistant Director appointed under sub-section (1) of
Section 49 of PML Act", it cannot be said that the Assistant Director
of Enforcement Department is incompetent to arrest the Petitioner
in exercise of the powers under Section 19(1) of the PML Act.
169. As rightly held in the above-said decision, sub-section (2) of
Section 49 of PML Act will come into play only when Director,
Deputy Director or Assistant Director, as the case may be, would like
to appoint any other officer for the purpose of exercising the powers
and for discharge of duties conferred or imposed under FEMA.
However, that does not preclude the Ministry of Finance,
Department of Revenue, to issue order appointing Assistant Director
under FEMA to function under the PML Act.
170. In the present case, however, learned Senior Counsel for the
Petitioner has placed much reliance on sub-section (3) of Section 49
of PML Act, to submit that this sub-section was not considered in the
above-said two decisions and as per this Section, "subject to such
conditions and limitations, as the Central Government may impose,
an authority may exercise the powers and discharge the duties
conferred or imposed on it under this Act". It is urged that in view of
this sub-section, the Central Government is having full authority to
impose such conditions and limitations, as it may deem fit, relating
to the exercise of powers and duties conferred or imposed under this
Act on the said authority. It is submitted that, accordingly, in view of
the powers conferred by sub-section (1) r/w. clause (a) and clause
(p) of sub-section (2) of Section 73 of PML Act, the Central
Government had made rules relating to "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 and its Period of Retention) Rules, 2005" .
The said Rules define, in Section 2(1)(c), the expression "Arresting
Officer" as follows :-
"2(1)(c). "Arresting Officer" means the Director, Deputy
Director, Assistant Director or any other
officer, authorized in this behalf by the Central
Government by general or special order to
exercise the power to arrest any person under
sub-section (1) of section 19 of the Act."
171. It is submitted that the use of the 'comma' after the words
"Director", "Deputy Director", "Assistant Director" or "any other
officer" and subsequent words after the 'comma', "as authorized in
this behalf by the Central Government", make it clear that such a
Director, Deputy Director, Assistant Director or any other officer are
also required to be authorized in this behalf by the Central
Government. According to learned Senior Counsel for the Petitioner,
no such authorization is issued in the instant case. It is submitted
that this aspect being not properly considered in above said
judgment, it needs to be considered in this case.
172. However, perusal of the decision of the learned Judge of this
Court, [Coram : R.C. Chavan, J. in Criminal Bail Application No.71 of
2013 decided on 04.02.2013], clearly reveals that this aspect was
definitely considered in paragraph Nos.13 and 14 of the said
Judgment, which read as under :-
"13. I have considered these arguments. First the rules
which have been relied on have been framed in
exercise of powers under clauses (a) and (p) of
Sub-section (2) of Section 73 of the Act. These
clauses (a) and (p) of Section 73(2) read as under:
"73(2) (a) the form in which records referred to
in this act may be maintained;
(p) the manner in which the order and
the material referred to in sub section (2)
of Section 19 shall be maintained.
14. The rules were, thus, framed in order to prescribe
forms in which records were to be maintained and
the manner in which order and material referred to
in Sub-section (2) of section 19 was to be
maintained. The term "Arresting Officer" was
defined for the purpose of those rules only.
Inserting in clause (c) in sub Rule (1) of Rule (2) of
those Rules, a subsequent comma, (,) after the
words, "or any other officer", may be an error of the
draftsman. In any case it is not necessary to go into
that question since definition is only for the
purpose of rules which have been framed for the
restricted purpose of clauses (a) & (p) of sub-
section (2) of section 73 of the Act. Therefore,
definition of "arresting officer" in these rules
cannot be held to control the provisions of Section
19 of the Act or to require that the Central
Government has to issue notification under those
rules for authorising an officer to effect arrest. The
definition would have to be read in conformity with
the provisions of Section 19 of the Act and the most
appropriate interpretation may be that as far as
Directors, Deputy Directors, or Assistant Directors
are concerned, no authorization of the Central
Government is required, and while any other
officer could also be authorized by the Central
Government, if such other officer has to be
authorized, a notification by the Central
Government would be required. Thus, there is no
substance in the contention that the Assistant
Director who effected arrest lacked the authority to
arrest. Therefore, there is no violation of any
procedural safeguards which the applicant had and
he cannot be said to have suffered by any eclipse of
his
rights by not following the
established by law in effecting his arrest."
procedure
173. Needless to state that, the Rules framed under the PML Act,
which are under "Delegated Powers" cannot override the provisions
of PML Act and, therefore, the use of 'comma' in the definition of the
expression "Arresting Officer" in Rule 2(1)(c) cannot be held to
control the provisions of Section 19 of PML Act, to require that, the
Central Government has to issue notification under those Rules for
authorizing the officer to effect the arrest. The law is well settled
that the definition given in the Rules has to be read in conformity
with the provisions of Section 19 of PML Act and hence appropriate
interpretation would be, as far as Directors, Deputy Directors and
Assistant Directors are concerned, no such authorization of the
Central Government is required; whereas, in respect of other
officers, such authorization may be necessary.
174. As to non-consideration of sub-section 3 of Section 49 of PML
Act in the above two authorities, even bare perusal of sub-section 3
of Section 49 of PML Act makes it clear that the authority may
exercise the powers and discharge duties conferred or imposed on it
under this Act, subject to such conditions and limitations, as the
Central Government may impose. Therefore, only if some conditions
and limitations are imposed by Central Government, the power of
arrest, which is already vested in these authorities can be restricted.
In the instant case, not a single notification issued u/s.49 (3) of the
Act is produced to show that any conditions and limitations have
been imposed by the Central Government on the authorities
established under the PML Act in exercise of their powers and
discharge of duties conferred or imposed on it under this Act. In our
considered view, therefore, the Assistant Director, being an
authority established under PML Act, Section 48(C) thereof, sans
any notification issued by the Central Government u/s.49(3) of the
Act imposing any conditions or limitations on his powers, the
Assistant Director is to be held as 'competent' to exercise its powers
under Section 19(1) of PML Act.
175. Even otherwise, as stated above, there are notifications, which
are produced on record, clearly stating that the Assistant Director
under FEMA is having the authority to arrest a person accused of
any offence under Section 19(1) of the PML Act.
176. The relevant notification dated 13th September 2005 bearing
SO No.1275(E) reads as follows :-
ig The Gazette of India
Order, New Delhi, 13 th September, 2005
"S.O. 1275(E.)- In exercise of the powers conferred
by Sub-section (1) of Section 49 of the Prevention of
Money-laundering Act, 2002 (15 of 2003), the
Central Government hereby appoints, with effect
from the 1st day of July, 2005, the Assistant Director
holding office immediately before the said date under
the Foreign Exchange Management Act, 1999 (42 of
1999), as the Assistant Director for the purpose of
the Prevention of Money-laundering Act, 2002."
177. This notification, thus, clearly provides that in view of the
powers conferred under sub-section (1) of Section 49 of PML Act,
the Central Government has appointed the Assistant Director
holding office immediately before the said date under FEMA as the
'Assistant Director for the purpose of Prevention of Money
Laundering Act'. Therefore, it cannot be accepted that Assistant
Director, FEMA, had no authority to act under the provisions of PML
Act.
178. In this respect, one can also place reliance on the Circular
Order (TECH) No.3 of 2011 produced by the Respondents, which
confers powers of arrest on the Assistant Director under the PML
Act. Thus, it can hardly be accepted that Respondent No.2 herein,
who is an Assistant Director, had no power to arrest the Petitioner.
Non-compliance with mandatory
Constitutional safeguards and provisions of PML Act
179. This brings us to the next issue relating to the compliance of
proper procedure prescribed under the Act for effecting arrest.
Though learned Senior Counsel counsel for the Petitioner has placed
much reliance on Article 22 of the Constitution, which lays down
certain safeguards for effecting arrest, the only relevant clauses of
Article 22 of the Constitution for the purpose of deciding this
Petition are clauses (1) and (2). So far as clause No.(3) is concerned,
it makes it clear that clause Nos.(1) and (2) of Article 22 of the
Constitution do not apply to any person, who, for the time being, is
an enemy alien or to any person, who is arrested or detained under
any law providing for preventive detention. Subsequent clauses,
namely, (4), (5), (6) and (7) deal with the arrest of the person under
preventive detention. As regards clause Nos.(1) and (2) of Article 22
of the Constitution, they lay down the following safeguards :-
"(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.
(2) Every person who is arrested and detained in custody
shall be produced before the nearest magistrate
within a period of twenty-four hours of such arrest
excluding the time necessary for the journey from the
place of arrest to the court of the magistrate and no
such person shall be detained in custody beyond the
said period without the authority of a magistrate."
180. Thus, first safeguard expects the person arrested to be
informed of the grounds for such arrest and his right to consult and
to be defended by a legal practitioner of his choice shall not be
denied. In the instant case, the Arrest Order produced at page
No.165 goes to show that such grounds of arrest were informed to
the Petitioner. In acknowledgment thereof the Petiitioner has signed
on the Arrest Order.
181. As regards the second safeguard, it expects such person
arrested to be produced before the nearest Magistrate within a
period of twenty-four hours of such arrest, excluding the time
necessary for journey from place of arrest to the Court of
Magistrate. In the instant case, admittedly, the Petitioner was
produced before the Magistrate on the next day. Though he contends
that he was called at the office of the Enforcement Directorate at
10:30 hours itself and since then he was detained there, though his
arrest shown at 22.05 hours, and he was produced before the
Magistrate on the next day at 16:30 hours, there is nothing on
record to show that immediately on reporting to the Enforcement
Department's office, Petitioner was arrested or detained. The mere
fact that inquiry was being made with him and hence he could not
leave the office or was not allowed to leave the office of Enforcement
Department, does not amount to his arrest or detention. Moreover,
the period of taking him from the place of his arrest to the Special
Court needs to be excluded and, therefore, it cannot be accepted that
there was breach of the safeguard laid down in clause No.(2) of
Article 22 of the Constitution.
182. Further, it is pertinent to note that Section 19 also contains
the same safeguards, like the arrested person being produced before
the Magistrate within twenty-four hours, excluding the time
necessary for journey from the place of arrest to the Magistrate's
Court. The said safeguard and provision is apparently complied in
this case and there is no violation of it in any way.
183. Much emphasis is placed by the learned Senior Counsel for the
Petitioner on Sub Section (1) of Section 19 of the Act. It is submitted
that the grounds of arrest are not only to be recorded but they are
also required to be informed to the person arrested, immediately. It
is urged that, the use of the word "shall" in Sub-Section (1) of
Section 19 makes it clear that such grounds are to be provided to the
arrested person at the time of arrest or immediately after the
arrest. Reliance is also placed on the Rules framed under the Money-
Laundering Act, 2002, particularly, the Prevention of Money-
Laundering (the Forms and the Manner of Forwarding a Copy of
Order of Arrest of a Person alongwith the Material to the
Adjudicating Authority and its Period of Retention) Rules, 2005. It is
submitted that as per Rule 6, it is provided that the Arresting
Officer, while exercising powers under Sub-Section (1) of Section 19
of the Act shall, sign the Arrest Order in Form III appended to these
rules. The Form III, read as follows;
FORM III
(See rule 6)
ARREST ORDER
Whereas, I........................................, Director/Deputy
Director/Assistant Director/Officer authorised in this behalf
by the Central Government, have reason to believe
that.........................................................resident of.....................
(name of the person arrested)
has been guilty of an offence punishable under the
provisions of the Prevention of Money-Laundering Act,
2002 (15 of 2003).
Now, therefore, in exercise of the powers conferred on
me under sub-section (1) of section 19 of the Prevention of
Money-Laundering Act, 2002 (15 of 2003), I hereby arrest
the said..........................................................................................
(name of the person arrested)
at.............hours on.....................and he has been informed of
the grounds for such arrest.
Dated at................on this...............day of.............two
thousand...................
Arresting Officer
(Signature with seal)
To
............................................
............................................
(Name and complete address of the person arrested).
184. Reliance is also placed on the definition of the word 'order' as
given in Rule 2(h) of these Rules, to submit that the 'order' means
the "order of arrest of a person and includes the grounds for such
arrest under sub-section (1) of section 19 of the Act".
185. It is submitted that, in the instant case, the Order of Arrest of
the Petitioner, as issued by Respondent No.2 and which is produced
in the paper-book at page No.165 does not disclose the grounds of
arrest, though it was mandatory, in view of the definition of the word
'order'. It is urged that, hence there is breach of a mandatory
provision and therefore, such Arrest Order has resulted into
illegality.
186. In our considered opinion, in order to appreciate this
submission, the Arrest Order of the Petitioner needs to be
considered and it can be reproduced as follows;
F.No.ECIR/07/MZO/2015 Dated : 14th March, 2016
ARREST ORDER
Whereas, I Sanjay V. Kinjawadekar, Assistant
Director, Directorate of Enforcement, Mumbai, have reason
to believe that Shri Chhagan Chandrakant Bhujbal, resident
of 8th floor, Solitaire, Convent Avenue Road, S.V. Road,
Santacruz West, Mumbai, has been guilty of an offence
punishable under the provisions of Prevention of Money
Laundering Act, 2002 (15 of 2003).
Now, therefore, in exercise of the powers conferred on
me under sub-section (1) of section 19 of the Prevention of
Money Laundering Act, 2002 (15 of 2003), I hereby arrest
the said Shri Chhagan Chandrakant Bhujbal at 22.00 hours
on 14.03.2016 and he has been informed of the grounds for
such arrest. (emphasis supplied)
Dated at Mumbai on this 14th day of March Two
Thousand Sixteen.
Arresting Officer
Sd/-
(Sanjay V. Kinjawadekar)
Assistant Directorate
Directorate of Enforcement, Mumbai
To
Shri Chhagan Chandrakant Bhujbal,
8th floor, Solitaire,
Convent Avenue Road,
S.V. Road, Santacruz West, Mumbai.
187. Thus, perusal of the Arrest Order makes it clear that it is in the
exact Form No.III, as given in the Rules referred above and
therefore, at this stage it cannot be said that there was non-
compliance of any mandatory procedural safeguard.
188. The perusal of the Arrest Order also reveals that the Petitioner
has been informed of the grounds for such arrest. The Arrest Order
bears the signature of the Petitioner in acknowledgment of having
received the same on the same night at about 22.05 hours.
Therefore, unless something contrary is produced on record, it has
to be presumed and held that the Petitioner was informed of the
grounds of arrest and in acknowledgment thereof he has signed on
the Arrest Order. If, no such grounds were communicated to him,
then, it is clear that he would have made endorsement to the effect
that, he has not received the grounds of arrest. After-all the
Petitioner is not some illiterate person but an educated person, in
the sense that he was the Minister in the earlier State Government
and that too for several years.
189. As regards the Petitioner's grievance that the grounds of
arrest were not communicated to him in writing, this grievance also
cannot be accepted to hold the breach of any statutory safeguard,
because neither Section 19(1) nor the definition of the word 'order'
as given in Sub-Clause (h) of Rule 2, provides that the grounds for
such arrest are to be provided in writing to the person arrested. It
indicates that oral communication of the grounds of arrest is not
only a substantial but proper compliance of the provision.
190. The provision of Section 19(1) also does not state that the
grounds of arrest are to be informed to the person arrested,
immediately. The use of the word in the said provision "as soon as
may be", makes it clear that grounds of arrest are not to be to be
supplied at the time of arrest itself or immediately on arrest, but as
soon as may be. If it was the intention of the Legislature that in the
Arrest Order itself the grounds of arrest should be stated, that too in
writing, the Legislature would have made strict provision to that
effect by using the word 'immediately' or 'at the time of arrest'. The
fact that Legislature has not done so but used the words 'as soon as
may be', thereby indicating that there is no statutory requirement of
grounds of arrest to be communicated in writing and that too at the
time of arrest or immediately after the arrest. The use of the words
'as soon as may be' implies that such grounds of arrest should be
communicated at the earliest.
191. Here, in the case it is not disputed that the detailed grounds of
arrest were furnished in the Remand Report filed before the Special
Court, immediately within 24 hours, when the Petitioner was
produced before the Special Court. On the basis of the said Remand
Report containing the grounds of arrest, the Special Court has
passed detailed order, justifying the arrest and granting two days
remand to the custody of Enforcement Directorate.
192. It is significant to note that at the stage when the Petitioner
was produced before the Special Court, immediately on the next
date, the Petitioner has not raised any grievance before the Special
Court that he has not been communicated or informed the grounds
of arrest. If it was really the fact that he was not communicated the
grounds of arrest, as stated in the Arrest Order, which bears his
signature, it goes without saying that the Petitioner, who was ably
represented by his Senior Counsel at the time of his first remand and
even for subsequent remands, would not have failed to raise this
grievance, especially when the Special Court has even taken care to
ask the Petitioner, whether he has any complaint. Thus, the
Petitioner was given ample opportunity to raise the grievance, if he
was really not informed of the grounds of his arrest.
193. It is also significant to note that the Petitioner has not raised
this grievance about the grounds of arrest being not informed to him
at the time of his arrest, not only when he was first produced for
remand before the Magistrate but even thereafter also from time to
time when he was remanded to Judicial Custody after the expiry of
every 15 days. He has also not raised this grievance in his bail
application(s) filed before the Special Court and this Court. If, now
after the rejection of those bail applications and after the lapse of
more that eight months, he is raising this grievance, then it is
obvious that it is clearly an after thought, to advance his case for
writ of habeas corpus.
194. Even assuming and accepting that such grounds of arrest were
required to be informed to him in writing and immediately at the
time of arrest, there is substantial compliance of this statutory
safeguard as such grounds were informed to him in the Arrest Order
itself and again on the next day as can be seen from the Remand
Report and Remand Order. These grounds were also informed to him
in the complaint, which was lodged within 15 days on 30th March,
2016. Therefore, there is more than substantial compliance of the
provisions.
195. Apart from that, even if the provisions are held to be not
complied in strict sense, mere non-compliance thereof will not make
the arrest of the Petitioner as wholly illegal, null and void, unless he
shows that any prejudice was caused to him for non-compliance of
the said safeguard in strict sense. No such prejudice is even
whispered. It is pertinent to note that even at the time of his
remand, he has not raised the grievance about it, showing any
prejudice in his defence or in his representation in the applications
for bail. He has pursued all his remedies and even the earlier Writ
Petition, knowing fully well what the case of the Respondents is
against him. Therefore, simpliciter "non-compliance of some
safeguards in the provisions does not and cannot make arrest of the
Petitioner as patently illegal, null and void, so as to invoke the extra-
ordinary writ jurisdiction of this Court for issuance of Habeas
Corpus.
196. It is needless to state that the offence alleged against the
Petitioner is of money-laundering. The report submitted to the
Special Court, on the basis of which the Special Court has taken
cognizance vide its order dated 27th April 2016, reveals that M/s.
K.S. Chamankar Enterprises secured RTO Development Project
amounting to Rs.4,700/- Crores from the Maharashtra Government
by misrepresentation and fraud and in connivance with the public
servants and the Petitioner, who was the then PWD Minister of
Maharashtra State. As a result, the State Government has suffered
loss to the tune of Rs.840.16 Crores; whereas, the Petitioner and the
others have reaped undue gain of the said amount. The Special Court
has observed the reasons why it found that cognizance needs to be
taken of the offence, having regard to the specific allegation not only
in respect of generation of the proceeds of crime, but also in its
laundering and thereafter issued the process. Thus, there was
sufficient material before the arresting authority for the reason to
believe that the Petitioner is guilty of the offence punishable under
Section 3 r/w. Section 4 of the PML Act. If for such a serious offence
in view of this prima facie material, Respondent No.2 had reason to
believe that the Petitioner is guilty of the offence of money-
laundering and hence Respondent No.2 arrests the Petitioner and
the Special Court remands him to Custody, then neither the arrest
nor the detention of the Petitioner can be called as illegal to issue
Writ of Habeas Corpus.
197. As observed by the Apex Court in the case of Y.S. Jagan Mohan
Reddy Vs. Central Bureau of Investigation, (2013) 7 SCC 439 , the
economic offences, having deep rooted conspiracy and involving
huge loss of public funds, need to be viewed seriously and considered
as grave offences affecting the economy of the country as a whole
and thereby posing serious threat to the financial health of the
country.
198. In the case of Union of India Vs. Hasan Ali Khan, (2011) 10
SCC 235, the Hon'ble Apex Court was further pleased to hold that,
'what will be the burden of proof when attempt is made to project the
proceeds of crime as untainted money?' It was held that, the
allegations may not ultimately be established, but having been made
the burden of proof that the monies were not the proceeds of crime
and were not, therefore, tainted, shifts on the accused persons under
Section 24 of PML Act.
199. In view thereof, having regard to the gravity of the offence, the
very object of the PML Act would be frustrated, if the Petitioner
projects some loophole or infirmity in the implementation of the
provisions of the PML Act, in order to get his release from detention,
that too by invoking such extra-ordinary remedy, circumventing the
very specific provisions of bail, as laid down under Section 45 of the
PML Act. After all, the provisions of PML Act or any Statute are to be
interpreted in order to advance the substantial cause of justice and
not to curtail the same in any way or to create an hindrance in
achieving the said cause. If the provisions of PML Act are to be
interpreted, therefore, in the proper perspective, then, we do not
find that there was any such lacunae, infirmity or, much less,
illegality in the arrest and detention of the Petitioner, for this Court
to invoke its extra-ordinary jurisdiction for release of the Petitioner.
200. Thus, none of the contention raised by the Petitioner to
challenge his arrest as illegal holds merit. As a result, the Petitioner
has failed to show that his arrest is wholly illegal, null and void and
further failed to show that the Special Court has passed the Remand
Order mechanically without application of mind, his petition for
Habeas Corpus cannot be maintainable. Hence, we do not find this is
a fit case either to admit, much less, to grant the relief, as prayed for.
Writ Petition, therefore, stands dismissed. Rule discharged. Civil
Application also stands disposed of.
[DR. SHALINI PHANSALKAR-JOSHI, J.] [RANJIT MORE, J.]
