TaxTMI 
TaxTMI 
2021 (5) TMI 189
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....est Rules. 1.3. As a consequence thereof declare that the remand proceedings are void and set aside the remand order dated: 11.11.2020 (Annexure-H) including any orders pursuant thereto; in ECIR /BGZO/32/2020 before the Court of 34^th Additional City Civil & Sessions Judge & Special Judges for CB & PMLA Cases Bangalore. 1.4. Grant such other relief that this Hon'ble Court deems fit in the facts and circumstances of the cases. 2. Facts as per petition: 2.1. The Petitioner claims to be a respectable and law-abiding citizen. The Respondent had summoned the Petitioner to appear before him on 30/09/2020 in connection with an investigation under the PMLA. The Petitioner appeared before the Respondent and co-operated in the investigation proceedings. It was then that the Petitioner learnt that the Narcotics Control Bureau, Bengaluru ['NCB' for short] had registered a case under the Narcotic Drugs and Psychotropic Substances Act, 1985 ['NDPS Act' for short] against one Mr. Mohammed Anoop and others; when the respondent allegedly became aware of certain monetary transaction between the Petitioner and the said Mohammed Anoop. 2.2. The Respondent recorde....
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.... By an order dated 07/11/2020, the Special Court remanded the Petitioner to the custody of the Respondent until 11/11/2020. 2.7. On 11/11/2020, the Respondent filed an application for remand of the Petitioner for judicial custody. The Petitioner opposed such an application on the following grounds: 2.7.1. That the very arrest of the Petitioner is illegal as the mandatory safeguards under Section 19 PMLA were not followed at the time of the arrest. There was no written record of grounds of arrest at the time of arrest, and a copy of the grounds of arrest, if any, was not served on the Petitioner. 2.7.2. That in the light of the constitutional mandate under Article 21 and the safeguards contemplated under Section 19 PMLA, the words "inform him of the grounds of such arrest" cannot be an empty formality of a mere oral communication of the arrest or the grounds of arrest to the accused. 2.7.3. That if the arrest is not as per the procedure established by law, it becomes illegal; 2.7.4. That the illegality of the arrest strikes at the very root of the matter and renders the arrest void ab initio. In such circumstances, all the consequential p....
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....s possession and his associates, the applicant department invoked Sec. 19(1) PMLA and arrested the accused. 2.7.8. There is complete variance in the reason for the arrest of the Petitioner as stated in the Grounds of Arrest and as stated in the 4 Remand Applications. Therefore, the two reasons for exercising powers under Section 19 PMLA to arrest the Petitioner are (i) the apprehension that he would destroy/tamper with the evidence and (ii) to safeguard the proceeds of crime. Firstly, the entire evidence of the alleged proceeds of the crime was in the form of bank accounts and incorporation documents of certain companies. Moreover, the proceeds of the alleged crime were in cash and bank transactions already lying in the bank accounts, over which the Respondent has ample powers of attachment and seizure and had exercised it. In the remand application dated 02/11/2020, the Respondent had already stated that he had recovered the digital evidence from the Petitioner and Mohammed Anoop. Under Sections 5 and 17 PMLA, the Respondent has ample powers to attach, freeze and seize any accounts, assets and properties, and for exercising such powers, the arrest of the Petitioner was no....
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....ffence under the Act Moreover such conclusion should be recorded in writing, which is a further safeguard against arbitrary arrest. Finally, such a record in writing must be served on the accused. All these should be done at the time of the arrest. If any of the said procedures are not followed, it would result in an arrest without following due procedure and would fall foul of the constitutional mandate under Article 21. 2.15. Furnishing of a copy of the grounds of arrest to the detenue is one of the safeguards put in place by the parliament against arbitrary arrest as can be seen, from the Notes on Clauses. Accompanying the PML Bill, 1999, in which the Government clarified on how the proposed law ensures prevention of arbitrary arrests, as follows: "Clause 18 proposes to empower the Director, the Deputy Director, the Assistant Director or any other authorized officer to arrest a person if he has reason to believe that the person is guilty of an offence under the proposed legislation. Necessary safeguards such as furnishing the grounds of arrest and production before the Judicial Magistrate or a Metropolitan Magistrate within twenty-four hours are also sought to ....
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.... 2.19. On the above grounds the Petitioner seeks for allowing of the Writ Petition and for the impugned orders to be quashed. 3. In the objections filed by the Respondent it is stated that: 3.1. It is the case of the complainant that the information received by the Directorate of Enforcement (DTE) with reference to 13 different FIRs registered by various police stations of Bengaluru City and the FIR registered by the Narcotics Control Bureau for the offence under various provisions of the NDPS Act revealed deep-rooted drug trafficking network in Bengaluru City in an organized manner involving highly influential Indian Nationals & foreign nationals and also about the involvement of high profile individuals as part of the organized crime. 3.2. It is the case of the Complainant that the accused persons in the above said first information reports registered by different police stations in Bengaluru City and Narcotics Control Bureau had generated huge proceeds of crime and that the said proceeds of crime are being held by the said accused persons projecting the same as untainted money and property. 3.3. It is alleged that Mr. Mohammed Anoop, who is a d....
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....tion. Though the Petitioner appeared before the Directorate on 06.10.2020, the Petitioner was evasive and did not provide satisfactory replies to the queries raised by the Investigating Agency. The Petitioner was asked to appear again; however, the Petitioner did not appear before the investigating agency. Subsequently, the Petitioner appeared before the investigating agency on 29.10.2020. Even on the said date, the Petitioner did not cooperate with the investigation. As the Petitioner was evasive, and in order to effectively conduct an investigation into the aforesaid case and by then the involvement of the Petitioner for the offence of money laundering was prima-facie established, the Complainant Directorate arrested the accused/applicant and produced him before the Court with a request to grant his custody for custodial interrogation. 3.10. The Court having perused the entire case diary and all the original statements of the accused persons recorded under Sec. 50(3) of PMLA Act and being satisfied with the fact that the Complainant had made out a reason to believe that the accused/applicant has been guilty of the offence punishable under the PMLA Act, was pleased to gra....
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....gards the source of the huge deposits or any explanation whatsoever. 3.12.7. The huge difference between cash deposits in his bank accounts and the declared income as per his ITR's is tabulated below: Sl.No. Financial year Cash deposits (in Rs.) Declared Income as per ITR (in Rs.) 1 2012-13 5,106,000 672,339 2 2013-14 6,566,000 536,035 3 2014-15 5,355,000 535,957 4 2015-16 5,629,000 4,978,509 5 2016-17 11,899,000 2,538,802 6 2017-18 11,692,600 1,629,654 7 2018-19 5,489,000 1,320,637 Total 5,17,36,600 1,16,76,276 3.12.8. The claim of the applicant that the money transferred to Mohammed Anoop was sourced from the loan taken in his partnership firm M/s Old Coffee House's name from Punjab National bank, Trivandrum, which is purportedly against the mortgage of his mother-in-law's immovable property, is found to be untrue. On analysis of bank accounts, it is seen that the cash was deposited in the accounts of Petitioner just before the fund transfers to Mohammed Anoop. Further: 3.12.9. There is no interest payment by Shri. Mohammed Anoop on loan ta....
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....thers involved in the crime. 3.16. Petitioner also revealed that he was settled in Dubai from the year 2008 to 2013 and also enjoyed the status of NRI for the said period. During his stay in Dubai he was also involved in a bank fraud case. DTE is in the process of obtaining details of fraud and related documents from the Authorities concerned in UAE for the purpose of further investigation. 3.17. On 04.11.2020, search operations u/s 17(1) of the PMLA were conducted on the declared premises of M/ s Beecapital Forex Trading Pvt. Ltd, Bengaluru, and M/s Bcapital Financial Services Private Limited which are the companies where Petitioner is a Director. However, it was revealed as per the said search operation that no company by the aforementioned names ever existed on the said premises and the said companies having fake addresses were floated by Petitioner. The details of these companies have been obtained from MCA website. Further investigation is underway. 3.18. During the search operations, u/s 17(1) of the PMLA, conducted on the residential address of the accused herein, one IndusInd Bank debit card bearing the name of Shri Mohammed Anoop, who is a drug d....
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....ose his statement under Section 50(3) of PMLA. 3.20. Further, One Mr. Arun S., who is the partner of Petitioner in M/s. Old Coffee House Restaurant has deposited huge amount of cash as well as has made high-value credits in the bank accounts maintained by Petitioner. The statement of Mr. Arun S under Section 50(3) of PMLA is essential for ascertaining the reasons for such high-value credits in the bank account of Petitioner as the reply of Petitioner is not satisfactory in nature. Summons dated 09.11.2020 and 7.11.2020 under Section 50(2) of PMLA was issued to Shri. Arun.S. He is yet to appear. 3.21. The petitioner was arrested on 29.10.2020, and the Respondent herein has provided a copy of the arrest order, grounds of arrest to the Petitioner and also allowed him to inform his relatives as per the guidelines laid down by the Hon'ble Supreme court in case of D K Basu vs State of West Bengal 1997 (1) SCC 416. The copy of served documents has already been submitted to the sessions court. The respondent has followed all conditions laid down in section 19 of the PMLA Act for the arrest of the accused. This fact is also self-evident from the fact that the Petitioners' ....
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....e on the part of the respondent-Investigating Officer to serve a written copy of the grounds of arrest is violative of the mandatory procedural requirement under Section 19 PMLA. 4.3. The requirement to inform the Accused of the grounds of arrest must not be given a mere textual interpretation. A cross-statute study of arrest provisions would reflect that the legislature has been consistent in the use of the words 'inform' and not used the word 'communicate', the meaning and construction to be placed on the word 'inform' ought to vary according to the particular arresting standard that is found to be used. In the context of a 'suspicion' standard or even a 'commission' standard, mere oral intimation may suffice, but the 'guilt' standard which offers the highest degree of protection from arrest must influence this Court to read the text purposively, obliging the investigating officer to communicate the grounds of arrest in writing. 4.4. The respondent, Investigating Officer, was therefore obliged to communicate the grounds of arrest by serving a copy of the grounds of arrest on the Petitioner 4.5. In this regard he refers to the Notes on Clauses appended to the PML Bill 199....
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....r. in W.P.(CRL) 363/2018 & Crl.M.A. 2151/2018 dated 19.02.2018 more particularly paragraphs 46 to 50 thereof which are reproduced hereunder for easy reference: 46. The power of arrest specified in Section 19 of the PMLA undoubtedly displaces the corresponding powers of arrest vested in a police officer under the Cr PC. Section 19 PMLA requires certain conditionalities to be fulfilled prior to the arrest. In particular the reasons to believe have to be recorded in writing in the file. The second aspect of Section 19 of PMLA is the communication of the grounds of arrest. Although Section 19 uses the word 'inform' in the context in which it appears a mere communication of the grounds would, in the considered view of the Court, not suffice. Merely reading out the grounds of arrest to the detenu would defeat the very object of requiring the reasons to believe to be recorded in writing and communicated to the detenu. As explained the Constitution Bench of the Supreme Court in C.B. Gautam (supra), in the context of the IT Act, the obligation to record reasons and convey the same to the party concerned operates as a deterrent against possible arbitrary action by the quasi-ju....
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....ma facie renders the arrest of the Petitioner illegal. Added to this is the failure to follow the detailed guidelines pertaining to arrest as laid down in D.K. Basu v. State of West Bengal (supra) which as clarified by the Supreme Court in para 37 (SCC) of the said decision applies with equal force to "other governmental agencies" which expressly included the DOE. 4.11.2. The Judgment of the Delhi High Court in the case of Neeraj Singal vs Union Of India And Ors. In W.P.(CRL) 2453/2018 dated 29.08.2018, more particularly paragraphs 25 and 26 thereof which are reproduced hereunder for easy reference: 25. Rule 4 of the SFIO Arrest Rules which mandates that the person arrested should be served with a copy of the arrest order which contains the grounds of arrest comports with the constitutional mandate as well as the law as explained in D K Basu v. Union of India (1997) 1 SCC 416. 26. In the present case, the grounds of arrest, even according to the SFIO, were only "explained" to the Petitioner. Nowhere is it noted that he was attempted to be served with the grounds of arrest and he refused to receive the grounds. It is only said that he refused to sign the arrest ....
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....er. It shall never be based upon the ipse dixit of the police officer, for example, in case the police officer considers the arrest necessary to prevent such person from committing any further offence or for proper investigation of the case or for preventing an accused from tampering with evidence or making inducement, etc. the police officer shall furnish to the Magistrate the facts, the reasons and materials on the basis of which the police officer had reached its conclusion. Those shall be perused by the Magistrate while authorising the detention and only after recording his satisfaction in writing that the Magistrate will authorise the detention of the accused. 8.4. In fine, when a suspect is arrested and produced before a Magistrate for authorising detention, the Magistrate has to address the question whether specific reasons have been recorded for arrest and if so, prima facie those reasons are relevant, and secondly, a reasonable conclusion could at all be reached by the police officer that one or the other conditions stated above are attracted. To this limited extent the Magistrate will make judicial scrutiny. 4.11.4. State of Punjab v. Davinder Pal Singh Bhulla....
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....a warrant, arrest any person who has been concerned in an offence punishable under this Act or against whom a reasonable suspicion exists of his having been so concerned". 4.16. Similar is the situation under Section 64 of the Indian Forest Act, 1927 which reads as under: 64. Power to arrest without warrant.- (1) Any Forest-officer or Police-officer may, without orders from a Magistrate and without a warrant, arrest any person against whom a reasonable suspicion exists of his having been concerned in any forest-offence punishable with imprisonment for one month or upwards. (2) Every officer making an arrest under this section shall, without unnecessary delay and subject to the provisions of this Act as to release on bond, take or send the person arrested before the Magistrate having jurisdiction in the case, or to the officer in charge of the nearest police station. (3) Nothing in this section shall be deemed to authorize such arrest for any act which is an offence under Chapter IV unless such act has been prohibited under clause (c) of section 30. Suspicion standard: 4.17. Reasonable suspicion that the accused has committed the offence ....
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....rd: 4.18. "Reason to believe that accused has committed the offence". Section 104 of the Customs Act 1962 which is reproduced hereunder for easy reference: 104. Power to arrest.- (1) If an officer of customs empowered in this behalf by general or special order of the [Principal Commissioner of Customs or Commissioner of Customs] has reason to believe that any person in India or within the Indian customs waters has committed an offence punishable under section 132 or section 133 or section 135 or section 135A or section 136, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.] (2) Every person arrested under sub-section (1) shall, without unnecessary delay, be taken to magistrate. (3) Where an officer of customs has arrested any person under sub-section (1), he shall, for the purpose of the releasing such person on bail or otherwise, have the same power and be subject to the same provisions as the officer-in-charge of a police station has and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898). (4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 ....
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....ing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station. Guilt standard: 4.20. "Reason to believe that accused is guilty of an offence"- Under Section 212(8) of the Companies Act, 2013 which is reproduced hereunder: 212. Investigation into affairs of Company by Serious Fraud Investigation Office: (8) If the Director, Additional Director or Assistant Director of Serious Fraud Investigation Office authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of any offence punishable under sections referred to in sub-section (6), he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. Rule 4. The Director, Additional Director or Assistant Director, while exercising powers under sub-section (8) of section 212of the Act, shall sign the arrest order together with personal search memo in the Form appended to these rules and shall serve it on the ....
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.... applies, the person could be arrested on the basis of Investigating officer having arrived at a reasonable suspicion; while granting bail, the Court would consider whether there are reasonable grounds to believe that the arrestee has committed the offence or not. 4.25. In terms of PMLA, the power to arrest would only be exercised where the Investigating officer comes to a conclusion that the person to be arrested is guilty, under Section 45 of PMLA, while granting bail the Court would have to consider whether the arrestee/detenue is not guilty of the offence, only then the detenue would be enlarged on bail. 4.26. In this regard, it is contended that the standard required to be ascertained on the basis of the statute permitting the arrest is a crucial factor for the purpose of arresting a person. If the said standard is not met, in that event, the powers under that particular statute to arrest a person cannot be exercised. 4.27. The standard of arrest, as also standard of granting bail, would go hand in hand and are antithetical to each other. By incorporating the guilt standard under Section 19, the legislature has specifically intended to limit the width of the power to ....
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....ami of the petitioner, cash deposits made in the account of the alleged driver of the petitioner, etc. 4.32. As regards all of these allegations, Shri Aravind Kamath, Learned Senior Counsel submits that the Investigating Officer did not call upon the petitioner to explain or furnish an explanation as regards these allegations thereby depriving the petitioner of answering them so as to avoid arrest. If it all he had been provided with an opportunity to reply to the allegations, he would have replied in such a manner as to convince the Investigating officer that there was no need for the arrest of the petitioner. 4.33. There is no basis to contend that the amount deposited in either the account of the petitioner or in the name of the company or in the Company of Mohammed Anoop are proceeds of crime, viz., drug trafficking. Merely on a suspicion that the said amounts are such proceeds of crime, no arrest could have been made of the petitioner. 4.34. It was required of the Investigating officer to have by a detailed order record the guilt of the petitioner as regards the offences alleged against the petitioner. The transaction between the petitioner and Mohammed Anoop is throu....
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.... is for the accused to be informed of the grounds of his arrest as soon as may be and not providing of copies of the grounds of arrest. In this regard, he relies upon the Strouds dictionary which are reproduced hereunder: Stroud's Judicial Dictionary of words and Phrases Inform. "Be informed of the reasons" (Criminal Justice Act 1967 (c.80) s.62(3). It is not necessary that a prisoner should be informed in writing of the reasons for his recall to prison. It is enough to show that in all the circumstances, it was clear that he understood the reasons (R. v. Secretary of State for the Home Department, Ex.P. Gunnell [1985] Crim. L.R.105). A requirement to inform is more extensive than a requirement to notify (Ali v. Birmingham City Council [2009] EWCA Civ 1279) "I think it can reasonably be inferred, therefore, that when Parliament decided to impose a duty on the Secretary of State to 'inform' the appellant it was entitled to, and did, assume that the appellant (or anyone else who could properly be informed on his behalf) would inform himself of the contents of a letter, e-mail or fax immediately upon its receipt. For practical purposes, therefore, i....
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....asons for his recall", the Court repelled the argument that section 62(3) necessitated that reasons be provided in writing to the person being recalled to prison. 5.7. By relying on the decision of the Bombay High Court in the case of Chaggan Chandrakant Bhujbal vs. Union of India & Ors. 2018 SCC Online Bom 9938 he submits that what is contemplated under the PMLA Rules, 2005 is that the accused is to be provided reasons for arrest, it does not contemplate that the same is to be provided in writing, the relevant paragraphs are reproduced hereunder for easy reference: 189. As regards the Petitioner's grievance that the grounds of arrest were not communicated to him in writing, this grievance also cannot be accepted to hold the breach of any statutory safeguard, because neither Section 19(1) nor the definition of the word 'order' as given in Sub-Clause (h) of Rule 2, provides that the grounds for such arrest are to be provided in writing to the person arrested. It indicates that oral communication of the grounds of arrest is not only a substantial but proper compliance of the provision. 190. The provision of Section 19(1) also does not state that the grounds of ar....
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....not only when he was first produced for remand before the Magistrate but even thereafter also from time to time when he was remanded to Judicial Custody after the expiry of every 15 days. He has also not raised this grievance in his bail application(s) filed before the Special Court and this Court. If, now after the rejection of those bail applications and after the lapse of more that eight months, he is raising this grievance, then it is obvious that it is clearly an after thought, to advance his case for writ of habeas corpus. 194. Even assuming and accepting that such grounds of arrest were required to be informed to him in writing and immediately at the time of arrest, there is substantial compliance of this statutory safeguard as such grounds were informed to him in the Arrest Order itself and again on the next day as can be seen from the Remand Report and Remand Order. These grounds were also informed to him in the complaint, which was lodged within 15 days on 30th March, 195. Therefore, there is more than substantial compliance of the provisions. 5.8. He relies on the decision in Moin Akhtar Quereshi vs. UOI & Ors. 2017 SCC OnLine Del 12108, the relevant....
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....a cannot be pressed into service for appreciating the ambit and scope of provisions of Section 50 of the Code of Criminal Procedure. Communication referred to in Section 50 of the Code of Criminal Procedure need not be, in every case, in writing. What is important is communication, or knowledge, or information regarding the particulars of the offence for which the arrest is made, or the grounds for such arrest. The obligation to "forthwith communicate to him full particulars of the offence for which he is arrested" in Section 50 of the Code, can be said to be discharged if it is done with all reasonable dispatch and without avoidable delay. It can also be interpreted to mean, as soon as possible, without any delay. See Sunil Chainani (Supra) iv. The words used in Article 22(1) are that no person arrested shall be detained in custody without informing him, as soon as may be, of the grounds of such arrest. Thus if the person is not informed as soon as may be, his further detention may become invalid or unlawful. But it cannot be said that his initial arrest itself becomes illegal. See Sunil Chainani (Supra). v. Once it has been shown that the arrest made by the poli....
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.... the mind of the arresting authority and to know exactly what the accusation against him is. This right of the arrestee is enables him to exercise his right to consult a legal practitioner of his choice and his right to be defended by the legal practitioner of his choice. 5.9. On these grounds he submits that grounds of arrest have been provided to the petitioner as per the signatures appended to the said grounds of arrest. Even if the same is denied by the petitioner the fact that a bail application had got filed would indicate that the grounds of arrest at least had been informed. This information is sufficient compliance with the requirements of Section 19 of the PMLA. The said information having been provided, the petitioner cannot raise this as a ground now. 5.10. As regards the decision in Rajabhushan Omprakash Dixit vs. Union of India & Ors. 2018 (168) DR.7292 ; Neeraj Singal vs. Union of India and Ors. 2019 CriL.7 191 and the judgment of the Hon'ble Supreme Court in the case of In the matter of Madhu Limaye, 1969 (1) SCC 292, he submits that the Judgment of the Delhi High Court in Rajbhushan Omprakash Dixit's case (supra) is per incurium as it has taken a contradi....
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....could be per incurium if it cannot be reconciled with an earlier decision rendered by a Bench of co-equal strength. 5.14. On the basis of the above, he submits that the decision of Rajbhushan's case is per in curium and cannot be relied upon by the petitioner. 5.15. As regards Madhu Limaye's case, he submits that in that case, the grounds of arrest had not even been made known to the petitioners, and a habeas corpus petition had been filed. In the present case, the grounds of arrest have been made known and a copy provided; therefore, the said decision is not applicable. 5.16. As regards the decision in Neeraj Singhals's case, he submits that the said decision has been stayed by the Apex Court by order dated 4.09.2018 in Crl.A.No.1115/2018, hence the petitioner cannot rely upon the decision in the said case. Even otherwise, he submits that in that case accused had not been provided with grounds of arrest, whereas in the present case, he has been so provided. Therefore, the said decision would also not apply on merits. GUILT STANDARD: 5.17. As regards the cross statute study and submissions made in relation thereto and more particularly as regards Guilt Standard, ....
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....g on the same, he submits that what is required at the stage of considering an application for bail under Section 437 is whether there is prima facie evidence in support of the charge that the accused is guilty of the offence punishable with death or imprisonment for life. It is not expected at that stage for the Investigating officer to provide evidence to establish the guilt beyond a reasonable doubt. 5.21. He relies on the decision in Gurcharan Singh v. State (Delhi Admn.), (1978) 1 SCC 118, more particularly para 21 which is reproduced hereunder for easy reference:- 21. Section 437 CrPC is concerned only with the Court of Magistrate. It expressly excludes the High Court and the Court of Session. The language of Section 437(1) may be contrasted with Section 437(7) to which we have already made a reference. While under sub-section (1) of Section 437 CrPC the words are: "If there appear to be reasonable grounds for believing that he has been guilty", sub-section (7) says: "that there are reasonable grounds for believing that the accused is not guilty of such an offence". This difference in language occurs on account of the stage at which the two sub-sections operate. D....
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....e decision in the case of P.Chidambaram vs Central Bureau Of Investigation [(2009)9 SCC 24 para 26] more particularly para 26 thereof which is reproduced hereunder for easy reference: 26. As discussed earlier, insofar as the "flight risk" and "tampering with evidence" are concerned, the High Court held in favour of the appellant by holding that the appellant is not a "flight risk" i.e. "no possibility of his abscondence". The High Court rightly held that by issuing certain directions like "surrender of passport", "issuance of look out notice", "flight risk" can be secured. So far as "tampering with evidence" is concerned, the High Court rightly held that the documents relating to the case are in the custody of the prosecuting agency, Government of India and the Court and there is no chance of the appellant tampering with evidence. 5.25. He submits that the purpose of arrest is not only to secure the presence of the accused but also for various purposes detailed hereinabove. He submits that it is not required for an investigation to be completed to arrest a person. Arrest, search, seizure, survey, etc. are only to further the investigation. There is no timeframe in which....
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....ich is reproduced hereunder for easy reference: 12. Thus, Section 167 operates at a stage when a person is arrested and either an investigation has started or is yet to start, but is such that it cannot be completed within 24 hours. Section 344, on the other hand, shows that investigation has already begun and sufficient evidence has been obtained raising a suspicion that the accused person may have committed the offence and further evidence may be obtained, to enable the police to do which, a remand to jail custody is necessary. The fact that Section 344 occurs in the chapter dealing with inquiries and trials does not mean that it does not apply to cases in which the process of investigation and collection of evidence is still going on. That is clear from the very language of sub-section (1-A) under which the Magistrate has the power to postpone the commencement of the inquiry or trial. That would be the stage prior to the commencement of the inquiry or trial which would be the stage of investigation. See A. Lakshamanrao v. Judicial Magistrate [(1970) 3 SCC 501 : AIR 1971 SC 186]. Therefore, it is not as if the stage at which the Magistrate passed the remand orde....
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....7 : 116 LT 136 (CA)], in the following words: "[I]t has been for many years the rule of the court, and one which it is of the greatest importance to maintain, that when an applicant comes to the court to obtain relief on an ex parte statement he should make a full and fair disclosure of all the material facts-facts, not law. He must not misstate the law if he can help it-the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the court will set aside, any action which it has taken on the faith of the imperfect statement." (emphasis supplied) 35. It is well settled that a prerogative remedy is not a matter of course. In exercising extraordinary power, therefore, a writ court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the court, the court may dismiss the action without adjudicating the matt....
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....the Court naturally takes statements of fact and grounds of fact contained in the petitions at their face value and it would be unfair to betray the confidence of the Court by making statements which are untrue and misleading. Thus, if at the hearing of the appeal the Supreme Court is satisfied that the material statements made by the appellant in his application for special leave are inaccurate and misleading, and the respondent is entitled to contend that the appellant may have obtained special leave from the Supreme Court on the strength of what he characterises as misrepresentations of facts contained in the petition for special leave, the Supreme Court may come to the conclusion that in such a case special leave granted to the appellant ought to be revoked." 4. In Welcom Hotel v. State of A.P. [(1983) 4 SCC 575 : 1983 SCC (Cri) 872 : AIR 1983 SC 1015] the Court held that a party which has misled the Court in passing an order in its favour is not entitled to be heard on the merits of the case. 5. In G. Narayanaswamy Reddy v. Govt. of Karnataka [(1991) 3 SCC 261 : AIR 1991 SC 1726] the Court denied relief to the appellant who had concealed the fact that the awa....
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....erials or is otherwise guilty of misleading the court, then the Court may dismiss the action without adjudicating the matter on merits. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the writ courts would become impossible. 8. In A.V. Papayya Sastry v. Govt. of A.P the Court held that Article 136 does not confer a right of appeal on any party. It confers discretion on this Court to grant leave to appeal in appropriate cases. In other words, the Constitution has not made the Supreme Court a regular court of appeal or a court of error. This Court only intervenes where justice, equity and good conscience require such intervention. 9. In Sunil Poddar v. Union Bank of India [(2008) 2 SCC 326] the Court held that while exercising discretionary and equitable jurisdiction under Article 136 of the Constitution, the facts and circumstances of the case should be seen in their entirety to f....
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....the same in the present proceedings is not permissible. 6. Heard Sri.Aravind Kamath, learned Senior counsel for the petitioner, Sri.S.V.Raju, learned Senior counsel and Additional Solicitor General of India, Perused papers. 7. On the basis of the pleadings filed and the arguments advanced, the points that would arise for determination of this Court are: i) Whether in terms of Section 19 of PMLA, the Investigating Officer or the Arresting Officer is required to inform the grounds of arrest to the person being arrested, if so, is it oral information or does it have to be in writing? ii) Whether the expression "reason to believe that any person has been guilty of an offence" found under Section 19 of the PMLA Act require a preliminary adjudication by the Investigating Officer as regards the guilt of the accused before arresting him? iii) Whether the objective satisfaction of the guilt of the accused is required to be reduced to writing on the grounds of arrest formulated by the Investigating Officer? iv) What order? 8. I answer the above points as under: 9. ANSWER TO POINT NO.1: Whether in terms of Section 19 of PMLA, the Investig....
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....ons for arrest and as such, even if the Petitioner were to contend that physical copy of the grounds of arrest was not furnished, the fact that the Petitioner was informed, which was in turn informed to Petitioner's brother would be sufficient compliance of the requirement of Section 19 and therefore, he submits that on facts even if this Court were to come to a conclusion that the physical copy of grounds of arrest has not been furnished, there being sufficient compliance, this Court ought not to intercede in the matter. In this regards, he relied upon the decision of the Bombay High Court in Chaggan Chandrakant Bhujbal's case (supra) and the decision of the Delhi High Court in Moin Akhtar Quereshi's case (supra), and by relying on the same, he submits that information is sufficient. 9.6. Under the Cr.P.C., a person can be arrested if the arresting officer or the arresting person has reason to believe that a person is guilty of an offence. As aforestated, the power of arrest would mean to detain or restrain a person hereby affecting his personal liberty guaranteed under Article 19 and 21 of the Constitution. Therefore, it is very much required that suitable and a....
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....convey or communicate the same to his near and dear ones or his lawyers so as to satisfy the requirement of Section 45 of the PMLA. More so when the requirement for granting bail is placed at such a high standard. 9.12. To enable the accused to make out a case for bail, it is required that there is no loss in communication, and the exact reasons or grounds of arrest are required to be conveyed to the accused. This, in my considered opinion, can only be done in writing, in a language known to the accused as also in English. 9.13. In terms of Section 45 of PMLA, such a person can seek bail and obtain bail only if such a person were to establish that he is not guilty of the offence alleged against him. The defence of the accused and/or claim that the accused is not guilty in order to be granted bail by a Court can only be adjudicated by the Court on a touchstone of the contents of the arrest order and reasons for arrest or grounds for arrest. 9.14. This works in two manners. Firstly that it is only if the grounds for arrest are available with the accused, the accused can endeavour to contradict the said grounds so as to, at this stage, prima facie establish he/she is not guil....
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....s of arrest would have to be furnished as soon as an arrest is made to the "Arrestee" and use of the word 'furnish' would mean that a physical copy of the same be made available to the arrestee. This, in my considered opinion, would be the purport and intent of Section 19 of the PMLA. 9.16. The decision of the Delhi High Court in Neeraj Singal's case (supra) would not be applicable to the present case since the said decision was rendered in the background of Rule 4 of SFIO Arrest Rules. 9.17. The law laid down by the Apex Court in Arnesh Kumar's case (supra) would be applicable to any arrest including that under Section 19 of PMLA. The Magistrate is required to ascertain if the arrest made was legally made and in accordance with law. Therefore, it is required that the reasons for arrest and/or the grounds for arrest are recorded in writing as required under Section 19 of the PMLA and produced before the Court of law. 9.18. In that view of the matter, unless the accused is aware of the exact grounds of arrest and/or as to what the said accused is required to answer to, so as to establish that he is not guilty of the offence, he would not be able to me....
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....ed before the Special Court that he has been provided with the grounds of arrest and the bail application being filed, not making any allegation of such non-receipt in writing. The above allegation being made much later, I am of the considered opinion that in the present case, the arrest order and grounds of arrest have been conveyed to the petitioner; if not, it would not have been possible for the petitioner to have got filed his application for bail on the very same day when he was produced before the Special Court. 9.25. As observed above, since it is required that the arresting officer inform and provide the arrestee with the arrest order and grounds of arrest in writing, it would be required that the investigating officer establish the positive fact of having provided the same in writing, since the negative cannot be established by the arrestee. Hence, in such cases, apart from obtaining the acknowledgement of the arrestee on the said arrest order and grounds of arrest, it may also be advisable for the arresting officer to email the said arrest order and grounds of arrest to the arrestee's email account, to the e-Mail account of the lawyer and or the near and dear ones of ....
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....ould have to be declared illegal. 10.4. Reference has been made to Section 6 of Railway Properties (Unlawful Possession) Act, Section 64 of the Indian Forest Act, to show that the standard of arrest is reasonable suspicion, reference is made to Section 41 of Cr.P.C to show that the standard of arrest is suspicion standard, 104 of Customs Act and Section 69 of the Central Goods and Service Tax Act, 2017 to show that the standard of arrest is Commission standard and Section 212(8) and 19 of the PMLA to distinguish the guilt standard contained therein. 10.5. Per contra, Sri. Surya Prakash V.Raju, learned Senior counsel and Additional Solicitor General, has submitted that the requirement of section 19 is not an adjudication of the guilt but is an objective satisfaction of the Investigating Officer and/or arresting officer, that the person to be arrested is guilty of an offence. The Investigating officer, on the basis of the material collected during the course of the investigation, is of the opinion that the person is involved and/or is guilty of the offences alleged, then such a person could be arrested under the PMLA. 10.6. On the basis of the above contentions, it is....
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....ountenanced on either law or on facts. 10.12. The submission by Sri. Aravind Kamath learned Senior counsel that conditions to be satisfied for the arrest under the different standards are different is correct. However, the learned Senior counsel has sought to extend the same and contends that the arresting officer has to by a detailed order in writing hold the arrestee guilty of the offence before the arrest under the PMLA. The opposite provisions do not reflect such a requirement; what is required is for the arresting officer to believe that on the basis of the material in his possession, the person to be arrested is guilty of the offence punishable under the PMLA and for the said reasons to be recorded in writing. This power of arrest being exercised during the course of an investigation is so done on the basis of the material in possession of the investigating officer and the standard though stated to be guilt standard, is a reason to believe standard inasmuch as the concerned officer should have reason to believe that the person is guilty of the offence punishable on the basis of the available information. So it is those reasons to believe which would be sufficient for the a....
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.... power of arrest limited to safeguarding the evidence or prevention of dealing with the proceeds of the crime. 10.17. The contention of Sri. Aravind Kamath, learned Senior counsel, that the Petitioner was arrested only to safeguard the proceeds of the crime cannot be countenanced on the facts. The arresting officer has come to a conclusion that on the basis of the documents and material available with him, the Petitioner is guilty of the offence of money laundering. It is only in furtherance of the same that the arrest is made and remand sought to safeguard the proceeds of the crime and/or to prevent the Petitioner from tampering with the evidence. The last two being in furtherance of the objective satisfaction of the arresting officer that the Petitioner is prima facie guilty of the offence of money laundering, it cannot be said that the only reason for the arrest is to safeguard the proceeds of the crime and/or prevent the tampering. The said contentions being taken up by the respondent-State in the application for remand; the same would not in any manner amount to being the basis of the arrest but for the continuance of the custody of the Petitioner. Therefore, the con....
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....er is based on the statements given by Sri. Mohammed Anoop, Sri.Sonet Lobo, Sri.Suhas Krishnegowda, analysis of the Bank accounts, an inspection of the declared premises of M/s Beecapital Forex Trading Pvt. Ltd, Bengaluru, and M/s Bcapital Financial Services Private Limited, enquiry with the Bank from whom the Petitioner is stated to have borrowed monies on the basis of security of his mother-in-law's property, an investigation into IndusInd Bank debit card, the signature of the Petitioner on the backside of the debit card and the use thereof by the Petitioner, which are reasons sufficient to establish the commission of the offence, the involvement of the Petitioner and secondly the guilt of the Petitioner in respect of the said offences. 10.21. In the present case, the facts on record have been sufficient for the Investigating officer to arrive at a objective satisfaction that the petitioner is required to be arrested. 10.22. The facts have been stated in detail hereinabove. Suffice to say that one Mohammed Anoop was arrested with possession of the drugs in commercial quantity, thereby having committed an offence under the NDPS Act. On his arrest during the course of his....
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....ted is guilty of an offence punishable under the Act. It does not mean that the said Investigating officer or the arresting officer has to adjudicate on the guilt, pass a detailed order or record the same in writing to indicate as to why he is of the opinion that the person to be arrested is guilty of the offence, the recordal of the objective satisfaction with reference to the material on record would be sufficient compliance. 10.25. The purpose of arrest is not material at the time of the arrest inasmuch as it is only the satisfaction on the part of the arresting officer of the prima facie guilt of the person to be arrested which is sufficient. 10.26. While considering the grant of bail, the concerned Court would consider the purpose of the continued detention of the accused in custody, and if the Court were to come to a conclusion that it is not required to detain the accused further in custody for further time, then the accused may be enlarged on bail. 10.27. In the facts of the case I'am of the considered opinion on the basis of the discussion made as regards the facts that the investigating officer has in writing indicated as to why he is of the opinion that the peti....