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Issues: (i) Whether the ECIR and consequential proceedings under the Prevention of Money Laundering Act, 2002 were without jurisdiction so far as the petitioner was concerned and whether the arrest and detention were illegal; (ii) Whether the petitioner was entitled to interim bail under Article 226 of the Constitution of India; (iii) Whether the Court should direct a preliminary inquiry by the Director, CBI.
Issue (i): Whether the ECIR and consequential proceedings under the Prevention of Money Laundering Act, 2002 were without jurisdiction so far as the petitioner was concerned and whether the arrest and detention were illegal.
Analysis: The challenge to the ECIR was examined in light of the nature of an ECIR as an internal document of the Enforcement Directorate and the settled position that prosecution under the money-laundering law is triggered by the existence of proceeds of crime linked to a scheduled offence. The Court noted that the materials in the complaint disclosed the petitioner's involvement in the alleged bribe transaction and in activities connected with the scheduled offence. It held that a bribe giver can also fall within the sweep of Section 3 of the Prevention of Money Laundering Act, 2002, and that the petitioner's jurisdictional objection was not sustainable. The arrest and remand were also not shown to be illegal, especially when the remand order itself was not under challenge.
Conclusion: The jurisdictional challenge failed and the arrest and detention were not held to be illegal.
Issue (ii): Whether the petitioner was entitled to interim bail under Article 226 of the Constitution of India.
Analysis: The Court found that the petitioner was already in judicial custody pursuant to a remand order passed by the competent court and that an alternative statutory remedy for bail was available. In such circumstances, invocation of Article 226 for interim bail was not justified. The Court treated the extraordinary writ remedy as unavailable for obtaining bail in the facts of the case.
Conclusion: The prayer for interim bail was rejected.
Issue (iii): Whether the Court should direct a preliminary inquiry by the Director, CBI.
Analysis: On the materials placed, the Court considered that the allegations disclosed a need for an independent preliminary inquiry into the petitioner's conduct. It observed that while an accused has no say in the choice of investigating agency, constitutional courts may direct an inquiry where sufficient prima facie material exists. The Court therefore directed the Director, CBI to initiate a preliminary inquiry and complete it expeditiously.
Conclusion: The prayer for a preliminary inquiry by the Director, CBI was allowed.
Final Conclusion: The writ petition was unsuccessful on the challenge to the ECIR and on the prayer for interim bail, but succeeded to the limited extent of obtaining a direction for a preliminary inquiry by the Director, CBI.
Ratio Decidendi: A person who is shown on the materials to have knowingly participated in a transaction connected with proceeds of crime may be proceeded against under the money-laundering law, and a writ court will not ordinarily grant interim bail under Article 226 when the person is already in judicial custody pursuant to an unchallenged remand order and an alternative bail remedy exists.
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