Legality of arrests under PMLA: scope of judicial review limited; challenges to ECIR additions and alleged ignored material rejected.

Legality of arrests under the PMLA was examined by assessing whether the authorised officer considered contemporaneous material in possession, exculpatory evidence, and subsequent additions to the ECIR when recording reasons to believe; the court analysed Wednesbury reasonableness and the compliance with PMLA procedural safeguards for arrest and held that disputes over factual relevance and investigation scope were beyond merits review, that no procedural breach vitiated the arrest process, and consequently the petitions challenging the arrests were dismissed.

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Issues: Whether the arrests of the petitioners under Section 19(1) of the Prevention of Money Laundering Act, 2002 were illegal for want of requisite 'material in possession' and non-consideration of exculpatory material; and whether the procedure prescribed by Section 19(2) PMLA was violated.

Analysis: The petitioners were accused of offences under Sections 3 and 4 PMLA arising from alleged diversion of funds and the ECIR was registered on 09.08.2021. The arrest on 21.07.2025 was challenged on grounds that the foundational FIRs were not live, exculpatory material (including cancellation reports and interim stay) was ignored, addendum to ECIR could not retrospectively validate the arrest, and the mandatory forwarding of 'material in possession' to the Adjudicating Authority under Section 19(2) PMLA was not complied with. The scope of judicial review over an arrest under Section 19(1) PMLA is limited and does not permit a merits re-evaluation of the material unless findings are unsupported by any evidence or are perverse. The classification of ECIR as an internal document was relevant to whether addition of FIRs after arrest vitiated the arrest. On the facts, the existence of registered FIRs and investigated material, including matters later added to ECIR, supplied a rational nexus to the recorded reasons to believe. The similarity between 'grounds of arrest' and 'reasons to believe' did not, by itself, demonstrate non-application of mind. Documentary evidence was placed before the Adjudicating Authority and acknowledged, addressing the procedural requirement of Section 19(2).

Conclusion: The arrests and subsequent remand orders were lawful and the petitions challenging them are dismissed; the petitioners' contentions regarding absence of material, retrospective addition to ECIR, identical wording of arrest documents, and failure to comply with Section 19(2) PMLA do not invalidate the arrest.

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