PMLA arrest requires sustainable material; illegal mining and omitted schedule entry could not support detention or remand.

Arrest under the Prevention of Money Laundering Act was found unsustainable because the record did not show a reliable basis for reasons to believe, nor any continuing role of the person in the linked company or syndicate. The Court also held that illegal mining was not a scheduled offence, and the omitted Environment Protection Act entry could not be used to sustain PMLA proceedings on the asserted basis. As the arrest was unlawful, the subsequent judicial remand orders could not cure the defect and were quashed as consequentially unsustainable, with immediate release directed if the person was not required in any other case.

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Issues: (i) whether the arrest of the petitioner under the Prevention of Money Laundering Act, 2002 was vitiated for want of sustainable material, reasons to believe and compliance with the statutory requirements governing arrest; (ii) whether allegations founded on illegal mining and environmental violations could sustain proceedings under the Prevention of Money Laundering Act, 2002 when the relevant environmental offence entry had been omitted from the Schedule; and (iii) whether the consequential remand orders could survive once the arrest itself was found unlawful.

Issue (i): whether the arrest of the petitioner under the Prevention of Money Laundering Act, 2002 was vitiated for want of sustainable material, reasons to believe and compliance with the statutory requirements governing arrest.

Analysis: The material placed for arrest was found to rest substantially on alleged illegal mining and fabricated e-rawana bills, but the petitioner was not named in the principal FIRs and had ceased to be a director of the company sought to be linked with him. The Court found no material showing his continuing role as director or person in charge of that company, and also found no reliable basis to connect him with the alleged syndicate entity relied upon by the investigating agency. In these circumstances, the foundational requirements for arrest under the money-laundering law, including a sustainable basis for reasons to believe, were not made out on the record.

Conclusion: The arrest was held unsustainable in law.

Issue (ii): whether allegations founded on illegal mining and environmental violations could sustain proceedings under the Prevention of Money Laundering Act, 2002 when the relevant environmental offence entry had been omitted from the Schedule.

Analysis: The Court held that illegal mining by itself is not a scheduled offence under the money-laundering law. It further noted that the entry in the Schedule relating to offences under the Environment Protection Act, 1986 had been omitted by the later amendment brought into force through the notified commencement date. On that basis, the environmental violation theory could not support the petitioner's prosecution under the Prevention of Money Laundering Act, 2002 in the manner asserted by the enforcement agency.

Conclusion: The scheduled-offence basis for proceeding against the petitioner was rejected.

Issue (iii): whether the consequential remand orders could survive once the arrest itself was found unlawful.

Analysis: The Court applied the principle that where the foundational action is illegal, consequential acts do not validate it. Since the arrest and the grounds supporting it were found indefensible, the judicial remand orders passed thereafter could not cure the original defect or sanctify the detention.

Conclusion: The remand orders were quashed as consequentially unsustainable.

Final Conclusion: The petitioner was held entitled to relief, with the arrest, grounds of arrest and remand orders set aside and immediate release directed if not required in any other case.

Ratio Decidendi: Where the material does not disclose a sustainable basis for arrest under the money-laundering law and the alleged predicate foundation cannot be linked to a surviving scheduled offence, the arrest and all consequential remand orders are liable to be quashed.

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