2024 (4) TMI 629 - HC - Money Laundering

ED arrest under Section 19 PMLA legal when accused produced before Special Court within 24 hours

The HC dismissed the petition seeking release, finding no illegality in petitioner's arrest under PMLA. The court held that petitioner became an accused ... Seeking release of petitioner - illegality in the arrest of the petitioner or not - whether petitioner was not produced before the learned Special Court within 24 hours of his arrest as mandated in law? - HELD THAT:- It is Section 19 of the PMLA which gives power to the Investigating Officer to arrest an individual against whom material is collected as contemplated under Section 2(1)(na), after following the process contemplated under Section 50 of the PMLA. Thus, the petitioner became an accused only when he was arrested under Section 19 of the PMLA, after the authority on the basis of material in his possession had reason to believe that the petitioner was guilty of the offence. Thus, when the petitioner came to the ED office under a summons under Section 50 of the PMLA, the petitioner was not an accused. Thus, if the said time-line is considered the petitioner was produced well within 24 hours of his arrest before the Special Court. As far as producing the petitioner before the nearest Magistrate is concerned under Section 167 Cr.PC, the term ‘nearest Magistrate’ used in Section 167 has to be considered where it is not possible for the investigating agency to take the arrestee before the jurisdictional Magistrate within 24 hours - In a case, where the arrestee can safely be produced before the jurisdictional Magistrate within 24 hours, then, there is no necessity of taking him first before the nearest Magistrate and then before the jurisdictional Magistrate - there is no merit in the allegations that the petitioner was not produced within 24 hours before the jurisdictional Court and as such, the petitioner’s arrest cannot be termed as ‘illegal’. The petitioner was produced before the Special Court well within 24 hours and as such, there are no illegality in the arrest of the petitioner and as such, the petition being devoid of merit, is dismissed. From a perusal of Section 50, it is evident that summons are issued under Section 50(2) by the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to ‘any person’ whose attendance they consider necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. Section 50(3) of the PMLA provides that all such summoned persons shall be bound to attend in person or through an authorised officer - Thus, statements recorded under Section 50(2) of the PMLA are not statements recorded under Section 161 of the Cr. P.C; and infact, are treated as evidence. It is also pertinent to note, that the ED officers are not police officers, inasmuch as, the said proceeding before the officers is a judicial proceeding, as evident from Section 50(4). In the facts, it is not as if the petitioner, aged 64 years had not reported to the Office of the ED on 3 earlier occasions, post the summons issued under Section 50 of the PMLA. This was the 4th summons which was issued to the petitioner. On all the earlier occasions, his statements were recorded and as such, the petitioner could have well been summoned on some other day or even on the next day, instead of keeping him waiting post-midnight, despite his alleged consent. Consent is immaterial. Recording of statement, at unearthly hours, definitely results in deprivation of a person’s sleep, a basic human right of an individual. It is deemed appropriate to direct the ED to issue a circular/directions, as to the timings, for recording of statements, when summons under Section 50 of the PMLA are issued, having regard to what is observed - petition dismissed. Issues Involved:1. Legality of Arrest and Remand2. Violation of Article 22(2) of the Constitution of India3. Violation of the Right to Sleep under Article 21 of the Constitution of India4. Compliance with Section 167 Cr.P.C and Section 19 of PMLASummary:1. Legality of Arrest and Remand:The petitioner sought relief u/s Article 226 of the Constitution of India, challenging the legality of his arrest and remand by the Special PMLA Court, Mumbai. The petitioner argued that his arrest was illegal as he was not produced before the learned Special Court within 24 hours of his arrest, making the arrest and remand illegal.2. Violation of Article 22(2) of the Constitution of India:The petitioner contended that he was not produced before the nearest Magistrate within 24 hours of his arrest, violating Article 22(2) of the Constitution. The timeline provided by the petitioner indicated that he was taken into custody on 07.08.2023 at 10:30 a.m., but was only produced before the Special Judge, PMLA Court, Mumbai on 08.08.2023 at 5:00 p.m. The respondent-ED argued that the petitioner was produced within 24 hours of his formal arrest at 5:30 a.m. on 08.08.2023, and the travel time from Delhi to Mumbai should be excluded.3. Violation of the Right to Sleep under Article 21 of the Constitution of India:The petitioner claimed that his right to sleep, a fundamental right under Article 21 of the Constitution, was violated as he was interrogated throughout the night despite being medically unfit. The Court noted that the petitioner was kept overnight for recording his statement, which went on till 3:30 a.m., thereby depriving him of his right to sleep. The Court disapproved of this practice and emphasized that statements should be recorded during earthly hours to respect the basic human right to sleep.4. Compliance with Section 167 Cr.P.C and Section 19 of PMLA:The respondent-ED argued that the petitioner was not detained when he entered the ED office pursuant to summons u/s 50 of the PMLA and became an accused only upon his formal arrest u/s 19 of the PMLA. The Court agreed, stating that the petitioner was produced well within 24 hours of his arrest before the Special Court. The Court also clarified that the term 'nearest Magistrate' in Section 167 Cr.P.C applies when it is not possible to produce the arrestee before the jurisdictional Magistrate within 24 hours. In this case, the petitioner was safely produced before the jurisdictional Magistrate within the stipulated time.Conclusion:The Court held that the petitioner was produced before the Special Court well within 24 hours of his arrest and found no illegality in the arrest. The petition was dismissed. However, the Court directed the ED to issue a circular/directions regarding the timings for recording statements when summons u/s 50 of the PMLA are issued, ensuring respect for the right to sleep. The case was listed for compliance on 9th September 2024.