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Issues: (i) Whether the second habeas corpus petition was maintainable in view of the earlier proceedings and the Supreme Court's orders. (ii) Whether the petitioner's arrest and continued custody under the Prevention of Money Laundering Act, 2002 were vitiated for non-compliance with the procedural safeguards under the Code of Criminal Procedure, 1973 and Article 21 of the Constitution of India. (iii) Whether the statements recorded under the Prevention of Money Laundering Act, 2002 could sustain the petitioner's custody, particularly where such statements were recorded after arrest.
Issue (i): Whether the second habeas corpus petition was maintainable in view of the earlier proceedings and the Supreme Court's orders.
Analysis: The earlier petition had been dismissed, but the Supreme Court permitted withdrawal of a special leave petition with liberty that the withdrawal would not affect any pending or future petition. The Court also obtained a clarification from the Supreme Court directing it to decide the pending habeas corpus petition on merits. In habeas corpus matters, constructive res judicata does not operate in the same manner as in civil proceedings where fresh grounds are raised.
Conclusion: The petition was held maintainable and was considered on merits.
Issue (ii): Whether the petitioner's arrest and continued custody under the Prevention of Money Laundering Act, 2002 were vitiated for non-compliance with the procedural safeguards under the Code of Criminal Procedure, 1973 and Article 21 of the Constitution of India.
Analysis: The Court held that, whether the offence under the Prevention of Money Laundering Act, 2002 was treated as cognizable or non-cognizable, the relevant procedure under the Code of Criminal Procedure, 1973 had to be followed in the absence of any inconsistent provision. If the offence was cognizable, compliance with sections 154, 157, 167(1) and 172 was necessary; if non-cognizable, section 155 and the connected procedural safeguards had to be followed. The Court found prima facie that the investigation had not been commenced or progressed in accordance with the procedure established by law and that the arrest and continued custody were in violation of Article 21 of the Constitution of India. It further observed that the rigours of section 45 of the Prevention of Money Laundering Act, 2002 could not override constitutional protection where a violation of Article 21 was made out.
Conclusion: The Court found prima facie illegality in the arrest and continued custody and held that the petitioner was entitled to interim relief.
Issue (iii): Whether the statements recorded under the Prevention of Money Laundering Act, 2002 could sustain the petitioner's custody, particularly where such statements were recorded after arrest.
Analysis: The Court considered that statements recorded after arrest were hit by Article 20(3) of the Constitution of India and were not admissible in evidence. It noted that there was no direct or circumstantial material, apart from such statements, connecting the petitioner with the alleged offence, and no recovery or discovery was shown at his instance.
Conclusion: The statements recorded after arrest were held not to furnish a valid basis for continued custody.
Final Conclusion: The petition succeeded to the extent of securing the petitioner's interim release pending final decision, and the Court declined the request to stay the order of release.
Ratio Decidendi: Constitutional protection under Article 21 requires compliance with the applicable criminal procedure, and statements recorded after arrest cannot be used to justify continued custody where they are hit by Article 20(3).
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