2024 (9) TMI 1420 - HC - Money Laundering

Person in judicial custody can be formally arrested for new case investigation under PMLA Section 19(3)

Jaffer Sadiq Versus The Assistant Director, Directorate of Enforcement, Chennai

The Madras HC dismissed a challenge to an arrest order alleging violation of Section 19(3) of the Prevention of Money Laundering Act, 2002. The court held ... Challenge to arrest order - violation of Section 19 (3) of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Section 65 of PMLA stipulates that “the provisions of the Code of Criminal Procedure, 1973 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”. PMLA being a special enactment will prevail over the general law and therefore, there are no hesitation in forming an opinion that the respondents have made arrest and thereafter, followed the procedures as contemplated under the provisions of PMLA and there are no infirmity as such. In view of the settled legal position of law, if a person is already in judicial custody in connection with another case, can be formally arrested in respect of investigation of the subsequent case. Therefore, the requirements of Section 19(3) of the provisions of PMLA is complied with and thus, there is no violation. The criminal original petition is devoid of merits and stands dismissed. Issues:Violation of Section 19 of the Prevention of Money Laundering Act, 2002 (PMLA) in relation to arrest order dated 26.06.2024.Analysis:The case involved a challenge to an arrest order dated 26.06.2024 passed by the Assistant Director in the Enforcement Directorate. The petitioner sought to quash the arrest order, alleging non-compliance with Section 19(3) of the PMLA. The petitioner argued that the arrest was made without following the mandatory requirements of Section 19 of the PMLA.The petitioner's counsel contended that the arrest order was in violation of Section 19(3) of the PMLA, which requires a person arrested under the Act to be produced before a Special Court or Magistrate within twenty-four hours, excluding the time necessary for the journey. The petitioner was not produced within 24 hours before the Special Court, rendering the arrest order null and void according to the petitioner.In response, the Special Public Prosecutor for the respondent argued that the arrest was made in accordance with Section 19(1) of the PMLA, as the petitioner was found guilty of an offense punishable under the Act. The respondent maintained that the petitioner was formally arrested on 26.06.2024 and was lodged in jail No.4, Tihar Jail, Delhi on the date of the arrest order.The judgment referred to the observations of the Supreme Court in the case of V.Senthil Balaji Vs. State regarding the interplay between Section 19 of the PMLA and Section 167 of the Code of Criminal Procedure. It emphasized the importance of complying with the safeguards provided under Section 19 of the PMLA and the role of the Magistrate in ensuring such compliance.The court also cited the provisions of Section 65 of the PMLA, which states that the Code of Criminal Procedure applies to proceedings under the Act. The court held that the arrest and subsequent procedures followed by the Enforcement Directorate were in accordance with the provisions of the PMLA, and there was no infirmity in the arrest.Furthermore, the judgment referenced a previous decision of the Madras High Court regarding the arrest of an accused already in judicial custody in connection with another case. The court clarified that if a person is already in judicial custody, they can be formally arrested in connection with a subsequent case without violating Section 19(3) of the PMLA.Ultimately, the court dismissed the criminal original petition, finding it devoid of merits and closed the connected miscellaneous petition.This detailed analysis of the judgment highlights the arguments presented by both parties, the legal provisions invoked, and the court's reasoning leading to the dismissal of the petition.