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of <h1>Revision application upheld despite interlocutory order; prima facie money laundering involvement; arrest compliant with PMLA.</h1> <h3>Directorate of Enforcement Versus The State of Maharashtra And Another</h3> Directorate of Enforcement Versus The State of Maharashtra And Another - TMI Issues Involved:1. Maintainability of the revision application against an interlocutory order.2. Nexus and involvement of the respondent in the offence of money laundering.3. Compliance with Section 19 of the Prevention of Money Laundering Act (PMLA) regarding the arrest of the respondent.4. Necessity of custodial interrogation for further investigation.Issue-wise Analysis:1. Maintainability of the Revision Application:The primary objection raised by the respondent's counsel was the maintainability of the revision application, arguing that it was an interlocutory order and thus not revisable under Section 397(2) of the Cr.P.C. The applicant's counsel countered this by citing judgments, including 'Madhu Limaye Vs. State of Maharashtra' and 'Amar Nath Vs. State of Haryana,' which clarified that certain orders, although interlocutory, can be considered final for specific purposes and thus revisable. The court concluded that the order refusing police custody becomes final since the State cannot reapply for police custody, making the revision application maintainable.2. Nexus and Involvement in Money Laundering:The court examined the statements recorded under Section 50 of the PMLA from various individuals, including the complainant, Amar Panghal, Niraj Bijalani, and the respondent. These statements revealed that significant funds were diverted from Tops Group to personal accounts and used for personal expenses. The respondent was implicated in a profit-sharing arrangement involving substantial cash payments, which were part of the proceeds of crime. The court found prima facie evidence of the respondent's involvement in money laundering, necessitating further investigation.3. Compliance with Section 19 of the PMLA:The respondent's counsel argued that the arrest was illegal due to non-compliance with Section 19 of the PMLA, which requires the reasons for the arrest to be recorded in writing. The court examined the arrest order and found endorsements indicating that the respondent was informed of the grounds of arrest and had acknowledged this. The court held that oral communication of the grounds of arrest constitutes substantial compliance with Section 19, dismissing the respondent's grievance.4. Necessity of Custodial Interrogation:The applicant's counsel argued that the complexity and enormity of the case required custodial interrogation to unearth the details of the crime, including the involvement of public servants and the end use of the proceeds of crime. The court agreed that the nature of the economic offence, involving deep-rooted conspiracies and significant public funds, necessitated a different approach. The court criticized the Holiday Judge for a casual approach and emphasized the need for a thorough investigation, which could be achieved only through custodial interrogation.Conclusion:The court quashed the impugned order of the Holiday Court and directed the Special Judge to reconsider the applicant's request for the respondent's detention in custody. The court emphasized the importance of balancing individual liberty with the necessity of a thorough and fair investigation in cases of economic offences. The Special Judge was instructed to pass an appropriate order on the same day, ensuring the investigation's integrity and comprehensiveness.
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