TaxTMI 
TaxTMI 
2024 (2) TMI 772
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.... the same ECIR. 2. This judgment has been divided into the following sections: - 1. Prayers made in both the petitions Paras 3 & 4 Pg 2 to 4 2. Brief facts of the case Paras 5 to 7 Pg 4 to 8 3. Arguments on behalf of the petitioners Paras 8 to 13 Pg 8 to 20 4. Arguments on behalf of the respondents Paras 14 to 19 Pg 20 to 30 5. Arguments on behalf of the petitioners in rebuttal Paras 20 to 29 Pg 30 to 42 6. Findings of this Court Paras 30 to 75 Pg 42 to 110 a) Non-application of mind and nonrecording of compliance of the conditions/stipulations contained in Section 19 by the Special Court while passing the impugned orders Paras 30 to 41 Pg 42 to 61 b) Illegal detention/wrongful restraint of the petitioners from 04.01.2024 to 08.01.2024 amounting to arrest on 04.01.2024 itself and consequential violations of Section 19 of PMLA read with Section 167 CrPC on account of non-production of petitioners within 24 hours Paras 42 to 54 Pg 61 to 79 c) Violation of the provisions of Section 19(2) of the 2002 Act Paras 55 to 60 Pg 79 to 91 d) Non-compliance of Section 19(1) of the 2002 Act Paras 61 to 66 Pg 91 to 102 7. Addi....
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....d violation of the provisions of Prevention of Money-Laundering Act, 2002 {PMLA, 2002} in view of the law laid down by the Hon'ble Supreme Court in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. 2022 LiveLaw (SC) 633; V. Senthil Balaji vs. The State represented by Deputy Director and others, 2023 LiveLaw (SC) 611; and Pankaj Bansal v. Union of India & Ors. Criminal Appeal Nos.3051-3052 of 2023 D/d 03.10.2023. It is further prayed that appropriate interim orders/directions may kindly be issued to the respondents to release the petitioner forthwith from the custody during the pendency of the present petition. It is further prayed that this Hon'ble Court may pass any other order or direction which it may deem fit and appropriate in the facts and circumstances of the present case." BRIEF FACTS OF THE CASE:- 5. 8 FIRs were registered at Police Station Yamuna Nagar, District Haryana. The details of the said FIRs as given in para 1 of the reply dated 22.01.2024 filed in the case of petitioner Dilbag Singh @ Dilbag Sandhu are given herein under:- S.No. FIR Schedule Offence 1. 0226 dt. 14.10.2022 Sections 120-B & 420 of India Penal Code, 1860 2. 0116 dt. 23.03.202....
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....bag Sandhu was arrested on 08.01.2024 at 12.15 PM from the above-said house and the petitioner Kulwinder Singh was arrested on 08.01.2024 at 02.20 PM from House No.62, Sector 14, HUDA, Yamuna Nagar. It is the case of the prosecution that searches were carried out at other places also. As per the case of the prosecution, the written grounds of arrest were given to both the petitioners on 08.01.2024. In the grounds of arrest with respect to petitioner Dilbag Singh @ Dilbag Sandhu, reference was made to the above-said 8 FIRs, more so, FIR No.226 dated 14.10.2022, in which, it was alleged that the Plant & Machinery of one Om Guru Unit was dismantled a year ago, but on the examination of salepurchase record, it was found that purchases had been made from 10.05.2022 to 17.06.2022 and the sellers with respect to the same were M/s Mubarikpur Royalty Company, PS Buildtech and the quantity involved in the same was 168830 MT (value of approx. Rs. 8.4 crore) and the purchase records were not found on e-Rawana portal, which indicated that the above purchases were done through fake e-Rawana. In the said grounds of arrest, it was further stated that it had been found that an order was passed by t....
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....EHALF OF THE PETITIONERS 8. Learned Senior Counsel for the petitioners has first submitted that as per the provisions of Section 19(2) of the 2002 Act, the concerned officer immediately after arresting the accused persons under Sub-Section (1) of the said Section is required to forward a copy of the order along with material in his possession to the Adjudicating Authority in a sealed envelope in the manner which may be prescribed and the said Adjudicating Authority is required to keep the said order and the material for such period as may be prescribed. It is further submitted that in exercise of the powers conferred by Sub-Section (1) read with Clauses (a) and (b) of Sub-Section (2) of Section 73 of the 2002 Act, the Central Government has framed The Prevention of Money-Laundering (the Forms and Manner of Forwarding a Copy of the Order of Arrest of a Person along with the Material to the Adjudicating Authority and the Period of Retention) Rules 2005 (hereinafter to be referred as "the 2005 Rules(I)" and as per Sub-Rules (2) & (4) of the said Rules, the arresting officer is required to place an acknowledgment slip in Form-1 appended to the (2005 Rules (I)) inside the envelope befo....
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....hority in a sealed envelope. No record has been referred to show that the material has been forwarded in the manner as it is required to be done under the 2005 Rules (I). It is submitted that although, a specific plea has been raised by the petitioners in the grounds of the petitions, yet in the reply dated 22.01.2024 filed by the respondents, no specific reference has been made to even remotely show the compliance of the provisions of Section 19(2) of 2002 Act. 9. Learned Senior Counsel for the petitioners has relied upon the judgment of the Hon'ble Supreme Court in V. Senthil Balaji Vs. State represented by Deputy Director and others, reported as 2023 SCC Online SC 934 to argue that the compliance of the provisions of Section 19 including that of Section 19(2) is a solemn function of the arresting authority which brooks no exception. It is submitted that in the said judgment, it has further been observed that the Magistrate concerned before whom the case has come up for the purpose of remand has to satisfy himself about the compliance of the safeguards provided/enshrined under Section 19 of the PMLA Act, 2002. Further reliance has been placed upon the judgment of the Hon'ble Sup....
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....has the power to arrest the said persons and is required to inform the said persons of the grounds of arrest and is further required to produce the said persons within 24 hours before the Special Court or Judicial Magistrate or Metropolitan Magistrate having jurisdiction as per Section 19(3) of the 2002 Act. It is submitted that a reading of the said provisions would show that from the date of their arrest, the persons concerned are required to be produced before the Court within a period of 24 hours as has been detailed in Section 19(3) of the abovesaid Act. It is argued that in the present case, both the petitioners were illegally detained on 04.01.2024 and were not permitted to go out of their house and thus, in effect, they were arrested on 04.01.2024 itself. It is argued that the fact that the petitioners were illegally detained in the premises in which search was conducted is clear from the documents on record and also from the reply filed on behalf of the respondent authorities, specific reference being made to para 29(h), 35 and 29(b) of the said reply. It is submitted that in the said reply, averments have been made that the petitioners were free in their residence from 04....
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....ffect be house arrest/illegal detention and thus, period of 24 hours within which the petitioners were required to be produced before the concerned Court having jurisdiction would commence from 04.01.2024 itself and not from 08.01.2024. On the aspect of house arrest, reliance has been placed upon the judgment passed by the Hon'ble Supreme Court in Gautam Navlakha Vs. National Investigation Agency, reported as (2022) 13 SCC 542 to contend that it has been observed by the Hon'ble Supreme Court in para 60 of the said judgment that house arrest is also custody and forced detention. It is argued that since, the petitioners admittedly were not produced before the Court of competent jurisdiction within 24 hours of their arrest/illegaldetention/wrongful confinement i.e., from 04.01.2024, thus, their arrest and all subsequent proceedings thereafter are illegal and against law. 12. Learned senior counsel for the petitioners has further submitted that as per the provisions of Section 19(3) of the 2002 Act, every person who has been arrested under Sub-Section (1) of the said provision is mandatorily, within 24 hours of the said arrest required to be produced before the Special Court, Judicial....
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....rectorate under Section 65 of the 2002 Act read with Section 167 CrPC. It is argued that even while passing the order dated 16.01.2024, the Special Judge has erroneously observed that the said aspect can only be determined at the time of taking cognizance on the complaint, if any, filed by the Directorate Enforcement without considering that as per settled law, it is the duty of the Magistrate to peruse the record and satisfy itself that the mandatory requirements of Section 19 including Section 19(3) of the 2002 Act have been met. It is submitted that a perusal of paragraph 12 of the said order dated 16.01.2024 would show that the sole plea raised on behalf of the respondent authorities was that certain raids were conducted at Faridabad and thus, the Sessions Court at Gurugram had jurisdiction. It is submitted that merely because raids are conducted at various places, without there being any material referred to in the impugned order or in the application for remand to show that the offence in question i.e., money laundering has been committed within the jurisdiction of the Court, it would not confer jurisdiction to the said Court where the alleged raid has been conducted. It is s....
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.... submitted that the grounds of arresting the petitioners were stated to be their non-cooperation and the petitioners having given vague and evasive replies. It is stated that in the present case, no notice under Section 50 had been issued to either of the two petitioners before the search had been conducted and it is impossible to know as to on what basis the said plea had been taken in the grounds of arrest. It is further submitted that it has been repeatedly held that merely by stating that the petitioners were evasive cannot be made the basis of arresting the petitioners as the Enforcement Directorate cannot expect an admission of guilt from them. Specific reference has been made to the judgment of the Hon'ble Supreme Court in Pankaj Bansal's case (supra) in support of the said argument. Further reliance has been placed upon the judgment of the Division Bench of this Court in case titled as 'Roop Bansal Vs. Union of India and others, reported as 2023 SCC Online P&H 3597. Learned senior counsel for the petitioners has further referred to the application under Section 65 of the 2002 Act read with Section 167 CrPC filed by the authorities with respect to both the petitioner....
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....first referred to Section 19(3) of the 2002 Act and has submitted that both the petitioners in both the petitions had been produced before the competent Special Court having jurisdiction, both with respect to subject matter as well as territorial within 24 hours as provided by Section 19(3) of the 2002 Act. Reference has been made to Annexure R-2 annexed along with the additional reply dated 29.01.2024 filed on behalf of the respondents, which is the Panchnama dated 05.01.2024. It is submitted that a perusal of the said Panchnama shows that the officers of the Enforcement Directorate had conducted search at House no.816, Sector 15-A, Faridabad and the said search had started at 08:25 AM on 04.01.2024 and concluded at 02:20 AM on 05.01.2024 and several recoveries including cash of Rs. 7,74,600/- had been found out of which an amount of Rs. 7.50 lacs was seized and balance amount of Rs. 24,600/- was released for household expenses. It is submitted that the said house belongs to one Raman Ojha who, as has been averred in paragraph 2 of the said additional reply, was also a member of the syndicate and was 50% partner in Delhi Royalty Company which was the partnership firm in which huge....
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....division, district or sub division unless it appears that such error has in fact occasioned a failure of justice. 15. Learned counsel has submitted that although the Gurugram Court has jurisdiction as a part of the crime was committed within its jurisdiction but even assuming that a part of the crime was not committed within the jurisdiction of the Gurugram Court, then also the same would not call for setting aside the orders of remand as the same would be saved in view of the provisions of Section 462 Cr.P.C., moreso when the petitioners have not been able to show any prejudice caused to them or that there has been any failure of justice in the petitioners being produced before the Gurugram Court. For the said aspect, reliance has been placed upon the judgment of the Hon'ble Supreme Court in Krishna Kumar Variar vs. Share Shoppe, reported as ( 2010)12 SCC 485 as well as the judgment of the Hon'ble Supreme Court in Kaushik Chatterjee vs. State of Haryana & Ors. reported as (2020) 10 SCC 92. Learned counsel for the respondents has also referred to Section 46 and Section 65 of the 2002 Act to highlight the fact that the provisions of the Code of Criminal Procedure, which are not inc....
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....as "State of Punjab and others Vs. Gurdev Singh", reported as 1991(4) SCC 1 to contend that even an order which is a nullity has to be challenged. It has been further pointed out that the reliance sought to be placed upon paragraph 3(d) of the additional affidavit on behalf of the petitioner to contend that for the first time, the respondent authorities had scrutinized the material on 10.01.2024, is incorrect, inasmuch as, there is no admission in the said paragraph stating that the authorities for the first time scrutinized the material and whereas, a perusal of Annexure R-2 annexed along with the additional affidavit shows that the panchnama is dated 05.01.2024 with respect to the search carried out in the premises at Faridabad and the same is prior to 09.01.2024, the date on which the petitioners were produced before the Special Court. Reference has also been made to an order dated 09.01.2024, more so, paragraph 7 to show that the material was also produced before the Special Court and the argument with respect to the said material being produced was raised before the Special Court. It is thus submitted that the pleas raised by the petitioner are misconceived and deserve to be r....
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.... so, Rule 3 Sub Rule 7 and Sub Rule 8 as well as Rule 4 Sub Rule 2 in support of his arguments to the effect that since, the occupant of the building has been permitted to attend the search and also the respondent authorities have the power to require any person who is the owner or is in immediate possession to open the locker or safe and also to allow access to inspect the same, thus, keeping the petitioners in the premises was necessary for carrying out the search. It is further submitted that even as per Rule 4 Sub Rule 2, the seizure memo was to be delivered to the occupant of the building and the provisions of Sub Rules 3 and 4 are also to the similar effect and thus, the presence of the petitioners who are owners/occupants of the building was required for the said purpose. Learned counsel has also relied upon the provisions of Section 100 of Cr.P.C. more so sub sections 6 and 7 to argue that since the occupant of the place searched was to be permitted to attend the search and thereafter the copy of list prepared of the seized materials was to be delivered to the said persons thus, it was necessary for the said persons to be present at the time of search and inspection. On the....
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....o absolutely misplaced and deserves to be rejected. 19. On the aspect of non-compliance of the conditions contained in Section 19(2) of the 2002 Act, learned counsel for the respondents has referred to para No.325 of the judgment in Vijay Madanlal Chaudhary's case (supra) to contend that reference was only made to 'pre-conditions' to be fulfilled by the authorized officer before effecting arrest. It is argued that provisions of Section 19(2) of the 2002 Act deal with a situation which is subsequent to the arrest and thus, intent of the Hon'ble Supreme Court while observing that the conditions in Section 19 of the 2002 Act are stringent and are of a higher standard, is with reference to the provisions of Section 19(1) of the 2002 Act and not with reference to Section 19(2) of the 2002 Act. It is further argued that the condition under Section 19(1) of the 2002 Act is referable to Article 22 of the Constitution of India, but the compliance of Section 19(2) of the 2002 Act is not referable to the same and thus, delay in compliance of the same would be a mere irregularity and not an illegality. It is further submitted that even in case compliance of Section 19(2) of the 2002 A....
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....a No.3 of the additional reply dated 29.01.2024 (at internal page 16) to contend that the reasons for delay in compliance of the provisions of Section 19(2) of the 2002 Act have been detailed in the said para and the said reasons are sufficient to show the compliance of Section 19(2) of the 2002 Act. Reference was also made to the remand order passed by the Special Court dated 09.01.2024 to contend that the Court had considered the remand papers and other relevant material and the allegations made by the prosecution including the fact that the petitioners' attitude was non-cooperative and after considering everything had observed that a prima facie case for the commission of the offence under the 2002 Act had been found and thereafter granted seven days custody to the Directorate of Enforcement. It is submitted that compliance of Section 19(2) is not required to be shown to the Magistrate as the same is to be forwarded to the Adjudicating Authority. It is further submitted that the said order is legal and in accordance with law and reflects due application of mind and thus, deserves to be upheld. It is further submitted that in the present case since no personal search of the petit....
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.... in the premises so as to further their search. It is argued that even in sub Rule 7, which has been relied upon by the respondent authorities, the expression "may" and not "shall" has been used and thus, a person, who is the owner and is in possession, may be required to open the same and allow access and where such person fails to comply with any such requirement, then the authorities are entitled to break open the lock of such box, locker, safe etc. and thus, even reading of the said provisions shows that even in case of non-presence or non-compliance of the order of the authorities, the authorities would have a right to break open the box etc., thus, not hampering their search. 21. Learned senior counsel has further referred to the Panchnama in both the cases to further argue that even a perusal of the said two Panchnamas would clearly show that no such direction was ever given to the petitioners and the other persons on 5th, 6th, 7th and 8th January, 2024 and there is no document placed on record to show that the authorities have ever directed either of the two petitioners to open any box, locker, safe, almirah etc. for the purpose of search and inspection. It is argued that ....
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....sence of the petitioners and to keep them in the premises for the purpose of search, is taken to be true, then in such a situation the said act would also violate Section 18 of the 2002 Act which as per the case of the respondent authorities has not been invoked in the case of the petitioners. It is argued that a perusal of Section 18 of the 2002 Act would show that in case an authority has reason to believe which has to be recorded in writing that any person has secreted about his person or in anything under his possession, ownership or control, any record or proceeds of crime which may be useful for or relevant to any proceedings under the Act, then the said authority is entitled to search that person and seize such record or property which may be useful for or relevant to any proceedings under the Act and in case of his doing so, it is incumbent to take the said person within twenty four hours to the nearest Gazetted Officer, superior in rank to him, or a Magistrate and also as per sub section (4) of the said Section, the person cannot be detained by the authorities for more than twenty-four hours prior to taking him before the Gazetted Officer, superior in rank to him, or the M....
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....cted to the Adjudicating Authority in a sealed envelope so that the said material cannot be tampered with and the officer in case is called upon to demonstrate that on the date when the arrest was made he had the material for his reason to believe that the person arrested was guilty and if there is any delay in sending the said material the same could result in such a situation where the material which is subsequent to arrest could also be sought to be forwarded so as to justify the arrest which had taken place prior. It is stated that it is for the said reason that the expression "immediately after arrest", which signifies a higher decree of urgency, rather than, the expression "as soon as may be" has been used in sub-section (2) of the 2002 Act. It is argued that as per the latest judgment of the Hon'ble Supreme Court in " Ram Kishor Arora Vs . Directorate of Enforcement ", reported as 2023 (SCC Online) SCC 1682, the Hon'ble Supreme Court has come to the conclusion that the expression "as soon as may be" would mean within 24 hours of the arrest of the accused, within which he had to be informed in writing about the grounds of arrest. It is further stated that the said tim....
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.... arrested at 12:15 PM and 2:20 PM on 08.01.2024. It is argued that it is no where stated that before the arrest, the material had already been scrutinized by them and on the basis of the material, the arresting officer had formed the reason to believe and no where stated that the said reason to believe was recorded in writing, thus, violating Section 19(1) of the 2002 Act also. It is argued that even as per the averments in sub-clause (c), the only issue, as per the case of the respondents which the Special Court was considering was the point of jurisdiction and no averment has been made that the compliance of Sections 19(1) and 19(2) of the 2002 Act, was also being considered or was actually considered. It is submitted that sub-clause (d) would clearly show that even as per the stand of the respondents, the preliminary scrutiny of documents was done on 10.01.2024 i.e. after two days of the arrest of the petitioners and after the remand had already been sought and it is thus apparent that the arrest was made without even scrutinizing the material and thus, the question of the arresting officer having the reason to believe on the basis of the said record that the petitioners were gu....
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.... submitted that thus, the intent of the legislature was that the material should be sent contemporaneously/immediately to the Adjudicating Authority so as to avoid any manipulation or subsequent addition of documents to justify prior arrest. It is further submitted that in the said judgment of Vijay Madanlal Choudhary's case (supra) in paragraph 322, it has been observed that the safeguards which have been provided are to ensure fairness, objectivity and accountability of the authorised officer and the said term objectivity has also been used in the subsequent judgment in Pankaj Bansal's case (supra) in Paragraph 5. 26. Learned senior counsel for the petitioners has relied upon the judgment of the Hon'ble Supreme Court of India in case titled as "State of Punjab vs. Davinder Pal Singh Bhullar and others" reported as (2011) 14 Supreme Court Cases 770 to contend that it is a settled proposition of law that in case initial action/order is found to be illegal, then all subsequent and consequential proceedings would fall automatically and the said principle is applicable to judicial, quasi judicial and administrative proceedings equally and that in case an order at the initial stage is....
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.... of PMLA which would prevail in the instant case. 29. Learned Senior Counsel for the petitioners has submitted that panchnama dated 05.01.2024 (Annexure R-2) and the alleged recovery of Rs. 7.50 lacs from Faridabad has no connection with the petitioners as the said premises is neither owned nor possessed by either of the two petitioners and even as per the case of the respondent authorities, the same is owned and possessed by one Raman Ojha with which the petitioners have no connection. It is argued that the alleged recovery from the residence of the third person cannot be stated to be the recovery from the present petitioners so as to confer the jurisdiction on the Court at Gurugram, more so on 09.01.2024 when the petitioners were produced before the said Court. It is reiterated that the petitioners are residents of Yamuna Nagar and the search was also carried out in their premises at Yamuna Nagar and there is nothing stated in the application for remand of both the petitioners to even remotely show any recovery or part of the cause of action which might have arisen within the jurisdiction of the Special Court at Gurugram. FINDINGS OF THIS COURT 30. This Court has heard the arg....
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....at any person is guilty of an offence punishable under the Act. Sub-Section 1 further provides that after the arrest, the person so arrested, is required to be informed about the grounds of such arrest "as soon as may be". Sub-Section 2 of Section 19 provides that the officer, who has arrested the person concerned, is "immediately" required to forward a copy of the order along with the material in his possession, on the basis of which he had reason to believe that the said person was guilty of the offence punishable under the Act, to the Adjudicating Authority in a sealed envelope in the manner as may be prescribed. Sub-Section 3 further provides that the person arrested shall within 24 hours be taken to the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be having jurisdiction. 32. The Hon'ble Supreme Court in the case of V.Senthil Balaji (supra) had observed that the provisions of Section 19 are mandatory and the compliance of the said provisions is a solemn function of the arresting authority which brooks no exception and that the officer concerned is to strictly comply with the mandate of Section 19 in its letter and spirit, failing which....
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....sons for his belief in coming to conclusion that a person has been guilty and therefore, to be arrested. Such a safeguard is meant to facilitate an element of fairness and accountability. 73. We have already touched upon the mandatory function that a Magistrate is to undertake while dealing with a case of remand. He is expected to do a balancing act. As a matter of rule, the investigation is to be completed within 24 hours and therefore it is for the investigating agency concerned to satisfy the Magistrate with adequate material on the need for its custody, be it police or otherwise. This important factor is to be kept in mind by him while passing the judicial order. We reiterate that Section 19 of the PMLA, 2002, supplemented by Section 167 of the CrPC, 1973 does provide adequate safeguards to an arrested person. If Section 167 of the CrPC, 1973 is not applicable, then there is no role for the Magistrate either to remand or otherwise. 74. Such a Magistrate has a distinct role to play when aremand is made of an accused person to an authority under the PMLA, 2002. It is his bounden duty to see to it that Section 19 of the PMLA, 2002 is duly complied with and any failure would en....
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.... it is also equally true that the police custody although is not the be-all and end-all of the whole investigation, yet it is one of its primary requisites particularly in the investigation of serious and heinous crimes. The legislature also noticed this and has therefore, permitted limited police custody" 95. SUMMATION OF LAW: xxx xxx ii. Any non-compliance of the mandate of Section 19 of the PMLA, 2002 would enure to the benefit of the person arrested. For such non-compliance, the Competent Court shall have the power to initiate action under Section 62 of the PMLA, 2002." 33. The Hon'ble Supreme Court in Pankaj Bansal's case (supra), had further reiterated the fact that the Court which is seized of the exercise under Section 167 Cr.P.C. of remanding the person arrested has a duty to verify and ensure that the conditions in Section 19 of the 2002 Act are duly satisfied and in the event, the Court fails to discharge its duty in right earnest and in proper perspective, the order of remand would have to fail on the said ground alone. In the said case, the Hon'ble Supreme Court had observed that the concerned Judge had not even recorded a finding that he had perused....
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....h and any failure would entitle the arrestee to get released. It was pointed out that Section 167 Cr.P.C is meant to give effect to Section 19 of the Act of 2002 and, therefore, it is for the Magistrate to satisfy himself of its due compliance by perusing the order passed by the authority under Section 19(1) of the Act of 2002 and only upon such satisfaction, the Magistrate can consider the request for custody in favour of an authority. To put it otherwise, per this Court, the Magistrate is the appropriate authority who has to be satisfied about the compliance with safeguards as mandated under Section 19 of the Act of 2002. In conclusion, this Court summed up that any non-compliance with the mandate of Section 19 of the Act of 2002, would enure to the benefit of the person arrested and the Court would have power to initiate action under Section 62 of the Act of 2002, for such non-compliance. Significantly, in this, the grounds of arrest were furnished in writing to the arrested person by the authorized officer. 17. In terms of Section 19(3) of the Act of 2002 and the law laid down in the above decisions, Section 167 Cr.P.C. would necessarily have to be complied with once an arre....
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.... the grounds of arrest in writing as a matter of course, "henceforth" thus, it was observed that the said requirement of furnishing the grounds of arrest in writing to the arrested person would be mandatory/obligatory after the date of the said judgment and that non-furnishing of the grounds of arrest in writing till the date of pronouncement of the judgment in the case of Pankaj Bansal (supra) could not be faulted upon. It would be relevant to note that the judgment in the case of Pankaj Bansal (supra) was pronounced on 03.10.2023 whereas both the petitioners, in the present case, have been arrested as per the case of the prosecution on 08.01.2024 and as per the case of the petitioners on 04.01.2024, which is after the date of pronouncement of the said judgment. In the case of Ram Kishor Arora (supra), the Hon'ble Supreme Court had further observed that the term "as soon as may be" appearing in Section 19(1) would mean reasonably convenient or reasonably requisite time to inform the arrestee about the grounds of arrest, which would be within 24 hours of his arrest. In the said case, the sole ground of challenge as noticed in para 3 and para 24 of the judgment was that the appe....
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....vement of person in the offence of money-laundering. That has to be recorded in writing and while effecting arrest of the person, the grounds for such arrest are informed to that person. Further, the authorised officer has to forward a copy of the order, along with the material in his possession, in a sealed cover to the Adjudicating Authority, who in turn is obliged to preserve the same for the prescribed period as per the Rules. This safeguard is to ensure fairness, objectivity and accountability of the authorised officer in forming opinion as recorded in writing regarding the necessity to arrest the person being involved in offence of money-laundering. Not only that, it is also the obligation of the authorised officer to produce the person so arrested before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within twenty-four hours. This production is also to comply with the requirement of Section 167 of the 1973 Code. There is nothing in Section 19, which is contrary to the requirement of production under Section 167 of the 1973 Code, but being an express statutory requirement under the 2002 Act in terms of Section 19(3), it has to be co....
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....e premises of the accused various ERawana bills and cheque books of many firms, which were part of syndicate were traced and that the above mentioned recoveries further augment the claim of the applicant/Directorate of Enforcement with regard to involvement of accused in the commission of offence. 21. Here this fact cannot be ignored that there are very specific and categorical allegation of the applicant-Directorate of Enforcement that during the course of investigation when the statement of the accused was recorded, his attitude was noncooperative, and that for majority of questions he has given either misleading replies or his replies were evasive. 22. Since the allegations against the accused are very serious and the Directorate of Enforcement is seeking to decode the money trail, role of the accused, viz-a-viz his persons/aids, who facilitated the offence of money laundering, so as to get to know as to how the accused persons were successful in generating proceeds of crime, in my opinion, a valid ground exists for the applicant/Directorate of Enforcement for custodial interrogation of the accused. In my considered opinion, once ECIR has been registered and during investiga....
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....hat not even a passing reference much less finding has been made on the aspect that the Court had satisfied itself that the officer concerned immediately after the arrest of the accused persons had forwarded the copy of the order along with the material in his possession to the Adjudicating Authority in a sealed envelope in the manner as has been prescribed. Thus, compliance of Section 19(2) has not been noticed and it has not even been remotely observed that the said mandatory provision has been complied with by the concerned officer of the Enforcement Directorate. It would be relevant to note that as per the additional reply dated 29.01.2024 filed on behalf of respondent No.2 {para (E)(3)(d)} in the case of petitioner Dilbag Singh @ Dilbag Sandhu, it is the admitted case of the respondent authorities that on the date of passing of the order dated 09.01.2024, the compliance of the provision of Section 19(2) had not been fulfilled by the respondent authorities. The detailed discussion regarding the same would be done in the subsequent paragraphs while dealing with the other issues in the present case. Similarly, even with respect to the provisions of Section 19(3), the fact that th....
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....d to state that the Court had perused the order, if any, recording the reason to believe that the petitioners are guilty of the offence punishable under the 2002 Act or the grounds of arrest in writing and had satisfied itself that the arresting officer, on the basis of material in his possession, had reason to believe that the petitioners were guilty of the offence punishable under the Act. No such fact has been recorded in the impugned order. On the said aspect, it has only been observed in the impugned order that once ECIR has been registered and during investigation, a prima facie case for the commission of the offence under the 2002 Act has been found, then the Directorate of Enforcement is bound to trace the money for which it required to interrogate the petitioners in custody. The said order is thus, illegal and deserves to be set aside on the said ground alone. 40. Even in the subsequent order of remand dated 16.01.2024, which was a common order passed in the case of both the petitioners, no reference has been made with respect to the compliance of provisions of Section 19(1) and 19(2). With respect to compliance of Section 19(3), the following findings have been given:- ....
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....he respondent authorities on the said ground alone. (II) ILLEGAL DETENTION/WRONGFUL RESTRAINT OF THE PETITIONERS FROM 04.01.2024 TO 08.01.2024 AMOUNTING TO ARREST ON 04.01.2024 ITSELF AND CONSEQUENTIAL VIOLATIONS OF SECTION 19 OF PMLA READ WITH SECTION 167 CR.P.C. ON ACCOUNT OF NON-PRODUCTION OF PETITIONERS WITHIN 24 HOURS 42. It is the case of both the petitioners that the petitioners along with their family members were illegally detained by the respondents on 04.01.2024 itself at the time when search and seizure of the houses had started and were illegally detained from 04.01.2024 to 08.01.2024 and were illegally shown to have been arrested only on 08.01.2024. Reference has been made to the panchnama in the case of both the petitioners. Relevant portion of the panchnama of petitioner-Kulwinder Singh is reproduced hereinbelow:- "Everyone present at the premises was allowed proper rest, food breaks and washroom breaks." A perusal of the above statement in the panchnama supports the case of the petitioners that they were not permitted to leave the house during the time of their search and were detained and their movement was controlled by the authorities and it was the authori....
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....d as detention. In fact, Section 17 PMLA which deals with search and seizure mandates certain requirements which were all duly complied with. In order to ensure the sanctity of the search and seizure and to ensure the safeguards, in exercise of powers under Section 73 PMLA, the central government has framed "The Prevention of Money Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the Period of Retention Rules 2005", which were also followed scrupulously by the Respondent No.2. Further, the Petitioner and other persons present at the premises were in possession/control of the locker, safe, almirah, documents etc. and hence it was important to secure their presence within the premises in order to have access to inspect/examine the content and to avoid any sort of tampering with the potential proceeds of crime" A perusal of the said reply would show that it is the stand of the respondents that the petitioners were free to move in their residence and could loiter within (wrongly mentioned as with and specific query was put to the respondent's counsel and it has....
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....er family members was required within the premises so as to enable them to make effective search as several things including locker, safe, almirah had to be opened. Sub-Rules 7 and 8 of Rule 3 are reproduced hereinbelow:- "3. Procedure relating to search.- (7) The authority may require any person who, is the owner, or has the immediate possession, or control, of any box, locker, safe, almirah or any other receptacle situated in such building, place, vessel, vehicle or aircraft, to open the same and allow access to inspect or examine its contents, and, where the keys thereof are not available or where such person fails to comply with any such requirement, may break open the lock of such box, locker, safe, almirah or other receptacle which the authority may deem necessary for carrying out all or any of the purposes specified by the Director in this behalf. (8) The occupant of the building, place, vessel, vehicle oraircraft searched, including the person in charge of such vessel, vehicle or aircraft, or some person on his behalf, shall be permitted to attend during the search." 44. The issue as to whether the detention of the petitioners for the purpose of the said search as p....
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....uthorities have a right to restrain the movements of the said persons i.e. the petitioners in the present case within the premises. 46. Importantly, a perusal of the panchnama in the case of both the petitioners would show that it is on 04.01.2024 alone that the search was made of the cupboard, almirah, drawer etc. and no such search had been carried out on 05.01.2024, 06.01.2024, 07.01.2024 and 08.01.2024 and thus, even in case the argument of respondent No.2 is accepted then also it cannot be said that the petitioners were legally detained for all the days from 04.01.2024 to 08.01.2024. In the panchnama (Annexure P-1) of petitioner Dilbag Singh @ Dilbag Sandhu, it has been mentioned that search had started at 8:25 hours on 04.01.2024 and it continued uptill 13 hours (1 pm) on 08.01.2024 and the actual search started at 8.40 hours on 04.01.2024 on which day, the documents in the cupboard, almirah, drawers, bed boxes and other part of the house were searched and the vehicle parked inside the house was also searched. A further perusal of the panchnama would show that there is no reference made with respect to any search made of any box, locker, safe, almirah etc. as mentioned in Su....
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....relevant to note that a plea has been raised in the additional reply dated 29.01.2024 to the effect that the petitioners were in the premises out of their own will, which is contradictory to the pleas taken in the earlier reply dated 22.01.2024 in which it was averred that the petitioner and the other persons were free at their own sweet will to loiter within their own premises during the duration of the search as general practice (the word "with" has been wrongly written and learned counsel appearing for the respondents has fairly submitted that the word "with" be read as "within"). Learned Senior Counsel for the petitioners had raised a strong objection to the taking of the said plea in the additional reply dated 29.01.2024 as neither any such plea was raised in the written statement dated 22.01.2024 nor any amendment of the earlier written statement was sought and it was argued that the said plea has been raised in the additional reply dated 29.01.2024 after the petitioners had opened their arguments. It is further submitted that the said plea is even contrary to the averments in the panchnama as well as to the other pleas averred by the respondents which have been reproduced he....
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....gs of the accused in the respective vehicles, which were respectively seized, and/or, belonged to the E.D. officials concerned, were only in pursuance to the summons, as became issued upon them. In addition, though he has attempted to thereby make a submission, that the said purported restraint, was not arrest, rather the date of drawing of the formal arrest memo, is the reckonable date rather for all the relevant purpose(s). 12. The reason for making the above conclusion, spurs from the judgment (supra), as cited before this Court by the learned Senior counsels wherein, it has been most candidly expressed, that the date of causing unlawful restraint, upon the petitioners, is the reckonable date, than the date of makings of the formal actual arrest of the accused, thus through the drawings of arrest memo(s). 14. The argument, if any, as addressed before this Court by the learned ASG concerned, that the said accompanying of the accused in the vehicles (supra), was only in pursuance to summons, becoming issued upon them, for ensuring that thereby, they are interrogated at the E.D. headquarters located at Delhi, is but also liable to be rejected. 15. The reasons for rejecting th....
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....Ashak Hussain Allah Detha @ Siddiqui (supra), it was observed that in substance, arrest was restraint on a man's personal liberty by the power or colour of lawful authority and it also amounts to restraint on or deprivation of one's personal liberty and in case the authority clothed with the power to arrest, actually imposes the restraint by physical act or words, then the same would amount to arrest and the question as to whether the person is arrested would depend on the fact as to whether he has been deprived of his personal liberty to go where he pleases irrespective of the label which the Investigating Officer may affix on the act of restraint and even the actual date of arrest would not be an index to see as to what is the actual date of arrest and the arrest would commence when restraint has been placed on the liberty of the accused and not the time of arrest recorded by the arresting officer. Relevant portion of paras 9, 10, 12, 13 of the said judgment are reproduced hereinbelow:- "9. xxx xxx. The Prosecution urges that after the "arrest" they were not detained beyond 24 hours. This submission is a distortion of the true meaning of the constitutional guarantee against det....
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....ell settled that "police custody" does not necessarily mean custody after formal arrest. It also includes "some form of police surveillance and restriction on the movements of the person concerned by the police". The word "custody" does not necessarily mean detention or confinement. A person is in custody as soon as he comes into the hands of a police officer. 23. Thus it is seen that a police officer cannot detain any person in custody without arresting him and any such detention will amount to a wrongful confinement within the meaning of Section 340 of the Indian Penal Code. Actual arrest and detention do not appear to be necessary. A person in custody cannot be detained without producing him before a Magistrate under the colourable pretention that no actual arrest is made and the burden of proving the reasonable ground is on the arrester that the time occupied in the journey was reasonable with reference to the distance traversed as also other circumstances and in case of continuation of detention for twenty-four hours, particularly, when the police officer has reason to believe that the investigation cannot be completed within twenty-four hours, he must produce the accused f....
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.... incarceration, internment, captivity; remand, duress, and durance. 9.2 The Cambridge Dictionary (online) explains custody as the state of being kept in prison, especially while waiting to go to court for trial. 9.3 Longman Dictionary (online) defines custody as when someone is kept in prison until they go to court, because the police think they have committed a crime. 9.4 Chambers Dictionary (online) clarifies that custody is "the condition of being held by the police; arrest or imprisonment; to take someone into custody to arrest them." 9.5 Chambers Thesaurus supplies several synonyms, such as detention, confinement, imprisonment, captivity, arrest, formal incarceration. 9.6 The Collins Cobuild English Dictionary for Advance Learners states in terms of that someone who is in custody or has been taken into custody or has been arrested and is being kept in prison until they get tried in a court or if someone is being held in a particular type of custody, they are being kept in a place that is similar to a prison. 9.7 The Shorter Oxford English Dictionary postulates the presence of confinement, imprisonment, durance and this feature is totally absent in the factual matri....
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.... the arrest which are enumerated hereunder:- i) The Director / Competent officer may arrest a person only after, on the basis of material in his possession, he has reason to believe, which reasons have to be recorded in writing, that the person sought to be arrested is guilty of the offence punishable under the Act. ii) After the person has been arrested, he is required to be informed of the grounds of arrest "as soon as may be". The said grounds of arrest have to be in writing as per the law laid down in the case of Pankaj Bansal (supra). The expression "as soon as may be" has been interpreted in the case of Ram Kishor Arora (supra) to mean upto 24 hours from the time of arrest. iii) Sub section 2 of Section 19 further provides that immediately after arresting the person under sub section (1), the copy of the order along with material in the possession of the officer concerned, as has been referred to in sub section (1) has to be forwarded to the Adjudicating Authority in a sealed envelope in the manner prescribed. iv) Under sub-Section (3), the person so arrested is mandatorily required to be taken to the Special Court or Judicial Magistrate or Metropolitan Magistrate as ....
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....th the material in his possession to the Adjudicating Authority immediately after the arrest of the person. Paragraph 21 of the judgment in the case of Ram Kishor Arora is reproduced hereinbelow:- "21. In view of the above, the expression "as soon as may be" contained in Section 19 of PMLA is required to be construed as- "as early as possible without avoidable delay" or "within reasonably convenient" or "reasonably requisite" period of time. Since by way of safeguard a duty is cast upon the concerned officer to forward a copy of the order along with the material in his possession to the Adjudicating Authority immediately after the arrest of the person, and to take the person arrested to the concerned court within 24 hours of the arrest, in our opinion, the reasonably convenient or reasonably requisite time to inform the arrestee about the grounds of his arrest would be twenty-four hours of the arrest." 56. In paragraph 311 of Vijay Madanlal Chaudhary (supra) while considering the provisions of Section 5 (2) and 17(2) of the 2002 Act, which also require the competent officer to immediately after attachment under Section 5(1) and after search and seizure under Section 17(1), to f....
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....sal of provisions of Section 19 and the law laid down in the above said judgments, it is apparent that the legislature has purposely chosen to use the expression "immediately" in Section 19(2) and expression "as soon as may be" in Section 19(1) as the order along with the material which is required to be forwarded to the Adjudicating Authority would already be in the possession of the competent officer carrying out the arrest, as before arresting on the basis of the said material in his possession, he has formulated reason to believe to be recorded in writing that the said person was guilty and thus, the act of sending the said material should be done immediately and the same would be required to be done prior to when the person so arrested is produced before the Special Court or Judicial Magistrate or Metropolitan Magistrate, as the case may be having jurisdiction, as it has been repeatedly held by the Hon'ble Supreme Court that it is incumbent upon the Court concerned to satisfy itself of the compliance of the conditions contained in Section 19 which would also include the compliance of Section 19(2), before passing the order of remand. In case the material on the basis of which ....
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....on with respect to the order dated 23.01.2024 annexed as Annexure R-11 along with the reply filed by respondent no.2 in CRM-M-3385-2024 vide which the petitioners have been remanded to the judicial custody till 06.02.2024. Respondent no.2 has in their additional reply dated 29.01.2024 in the case of Dilbag Singh given the series of events which as per their case had taken place from the time of search till the time of scrutiny of documents. Paragraphs E[(3)(a) to (3)(d)] of the same are reproduced hereinbelow:- "3. That in light of the above well settled legal principles, it is submitted that the following series of events explaining the timeline of the present case with respect to the arrest and compliance of Section 19(2), shows beyond any pale of doubt that the respondent Directorate has acted without any undue delay in compliance with Section 19 of the PMLA. a) It is submitted that this Directorate initiated search operation at 23 different locations in the districts of Yamuna Nagar, Karnal, Mohali, Sonepat and Faridabad with manpower of around 110 Enforcement Directorate officers/ officials along with approximately 100 CRPF personnel on 04.01.2024. To conduct the search, 1....
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....was received around 7:30 PM on 09.01.2024 d) Thereafter, on 10.01.2024, without any delay, the officials of the Directorate preliminary scrutinized all the seized material which was collected from 23 different teams. After summarizing the seizure, officer prepared the application & other material as prescribed which was to be sent to adjudicating authority. Later on, both letters intimating about the search and arrest, along with requisite documents as prescribed were dispatched to the Ld. Adjudicating Authority on 10.01.2024. However, by the time officer reached the office around 5:30 PM of the Ld. Adjudicating Authority situated in New Delhi, dispatcher had left the office hence, this office could get the receiving only on 11.01.2024 (Annexure-R7)." A perusal of the above reply would show that it has been admitted by respondent no.2 that till 09.01.2024 no compliance of Section 19(2) was made. It is the own case of respondent no.2 that 110 officers of the Directorate of Enforcement along with 100 CRPF personnel were involved in the search operation and yet respondent no.2 was not able to forward the material which they had already collected as per their case, to the Adjudicati....
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....orwarding the copy of the arrest order along with the material to the Adjudicating Authority. In the above said case, it was impossible for the authorities to have complied with the provision of Section 19(2) within 24 hours as on Saturday and Sunday, the office of the Adjudicating Authority was closed and it was observed that in view of the provisions of Section of 10 of the General Clauses Act, the act done on the following day was taken to be done within the period required. In the case at hand, it is not the case of respondent no.2 that either on 08.01.2024 or on 09.01.2024 there was a holiday in the office of the Adjudicating Authority. 60. Further reliance sought to be placed upon the judgment of the Hon'ble Supreme Court of India in Sheo. Shankar Singh (supra) as well as State of Rajasthan Vs. Daud Khan (supra), by the learned counsel for the respondent would also not further the case of respondent no.2. In the said cases, the Hon'ble Supreme Court was considering the provisions of Section 157 of Cr.P.C., with respect to cases where the FIR had been registered under the provisions of IPC and not under the provisions of a special Act like the 2002 Act. In the case of Sheo. S....
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....002 ACT 61. Section 19(1) which has been reproduced in the earlier part of the judgment states that the competent officer may arrest a person after he has reason to believe (on the basis of material in his possession, to be recorded in writing) that any person is guilty of an offence punishable under the Act and as soon as may be inform him of the grounds of such arrest. In pursuance of the law laid down by the Hon'ble Supreme Court in Pankaj Bansal (supra), the said grounds of arrest are to be supplied in writing and the expression "as soon as may be" has been held to mean "within 24 hours" in the case of Ram Kishor Arora (supra). The Hon'ble Supreme Court in the case of Pankaj Bansal (supra) had observed that failure of a person to respond to the questions put to them by the E.D. would not be sufficient in itself for the Investigating Officer to opine that they were liable to be arrested under Section 19 as the said provision specifically requires that the Investigating Officer is to be of the opinion that there is reason to believe that the person concerned was guilty of the offence under the Act and that, mere non-cooperation of the said person in response to the summons issue....
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....event, it is not open to the ED to expect an admission of guilt from the person summoned for interrogation and assert that anything short of such admission would be an 'evasive reply'. In Santosh S/o Dwarkadas Fafat vs. State of Maharashtra, this Court noted that custodial interrogation is not for the purpose of 'confession' as the right against self-incrimination is provided by Article 20(3) of the Constitution. It was held that merely because an accused did not confess, it cannot be said that he was not co-operating with the investigation. Similarly, the absence of either or both of the appellants during the search operations, when their presence was not insisted upon, cannot be held against them. xxx xxx xxx 32. In this regard, we may note that Article 22(1) of the Constitution provides, inter alia, that no person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest. This being the fundamental right guaranteed to the arrested person, the mode of conveying information of the grounds of arrest must necessarily be meaningful so as to serve the intended purpose. It may be noted that Section 45 of the Act of 2....
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....urnish such grounds of arrest in writing or to allow such grounds to be read by the arrested person or be read over and explained to such person." 62. The Hon'ble Supreme Court of India in Pebam Ningol Mikoi Devi (supra) while examining the provisions of the National Security Act 1980 and Article 22 of the Constitution of India observed that even when the detention of a person is based on subjective satisfaction of the authority concerned, then also in support of the said subjective satisfaction, reference should be made to some pertinent material. In the said judgment, reliance was placed upon the judgment of the Hon'ble Supreme Court in "State of Rajasthan vs. Talib Khan" reported as (1996) 11 SCC 393 which required the communication of the grounds of detention to the detenue together with documents in support of the subjective satisfaction reached at by the detaining authority. It was further observed that individual liberty is a cherished right and is one of the most valuable fundamental rights guaranteed by the Constitution to the citizens of this country. Paragraphs 3, 16, 22, 23, 24 and 25 of the said judgment are reproduced hereinbelow:- "3. Individual liberty is a cheri....
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.... of that satisfaction. We are aware that the satisfaction of the District Magistrate is subjective in nature, but even subjective satisfaction must be based upon some pertinent material. We are concerned here not with the sufficiency of that material but with the existence of any relevant material at all." (emphasis supplied) 23. In Shafiq Ahmed v. District Magistrate, Meerut, this Court opined :- "Preventive detention is a serious inroad into the freedom of individuals. Reasons, purposes and the manner of such detention must, therefore, be subject to closest scrutiny and examination by the courts." (emphasis supplied) This Court further added: (Shafiq Ahmad case, SCC p.561, para 5) "5. ...there must be conduct relevant to the formation of the satisfaction having reasonable nexus with the action of the petitioner which are prejudicial to the maintenance of public order. Existence of materials relevant to the formation of the satisfaction and having rational nexus to the formation of the satisfaction that because of certain conduct "it is necessary" to make an order "detaining" such person, are subject to judicial review." (emphasis supplied) 24. In State of Punjab v.....
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....ed to show the sequence of events in order to explain the delay in compliance of Section 19(2) but a closer perusal of the said paragraph would show that in case the preliminary scrutiny of documents had been done on 10.01.2024, subsequent to 08.01.2024 when the petitioners were arrested, then the question of the arresting officer having formed the reason to believe in writing that the petitioners were guilty of an offence under the 2002 Act on the basis of the material in his possession, becomes highly doubtful. Moreover, no reference has been made in the sequence of events as to when the reasons to believe as required under Section 19(1) of the 2002 Act were reduced into writing. 64. It would be further relevant to note that even a perusal of the remand application dated 09.01.2024 in the case of Dilbag Singh as well as in the case of Kulwinder Singh does not even remotely record the fact that the arresting officer had recorded the reasons of his belief in writing. In paragraph 18 of the application for remand in the case of Dilbag Singh, it has been observed that the petitioner was "prima facie guilty for commission of the offence of money laundering on the basis of investigati....
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....ons to believe as required under Section 19(1) prior to arresting the petitioners moreso after application of mind becomes highly doubtful. A further perusal of paragraph 39 of the reply dated 22.01.2024 filed in the case of Dilbag Singh would show that it had been observed that the arrest was made after having reason to believe that the prima-facie offence of money laundering is made out against the petitioners. Relevant part of paragraph 39 is reproduced hereinbelow:- "The arrest was made after having reasons to believe that a "prima facie" case of offence of money laundering is made out against the petitioner person." 66. To the similar effect is the averment made in paragraph 29 of the said reply which has already been reproduced in the earlier part of the judgment. Thus, even as per the stand of respondent no.2, the arrest was made after finding a prima-facie case against the petitioners and not after there was reason to believe on the basis of material in their possession that the petitioners were guilty of the offence punishable under the Act. In the grounds of arrest, reference has been made to one Om Guru Unit regarding which the petitioners are not stated to be either ....
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.... some recovery/part of cause of action within the jurisdiction of the Gurugram Court so as to meet the compliance of Section 19(3) of the 2002 Act. Although in the application for remand filed on 09.01.2024, no such recovery has been referred to but in the additional reply dated 29.01.2024 filed on behalf of respondent No.2 in the case of petitioner Dilbag Singh @ Dilbag Sandhu, it has been stated that an amount of Rs. 7.50 lakhs was seized from the residence of one Raman Ojha, who is stated to be a 50% partner in Delhi Royalty Company which was a partnership firm and thus, the said Court at Gurugram had the jurisdiction at the time of passing of the order of remand dated 09.01.2024. In this regard, reference has been made to the panchnama dated 05.01.2024 (Annexure R-2) by the learned counsel for respondent No.2. A perusal of the said panchnama shows that House No.816, Sector 15-A, Faridabad, belonging to Raman Ojha was searched on 04.01.2024 and from the same an amount of Rs. 7.50 lakhs was seized. It is the case of the petitioners that the said recovery has no connection with the petitioners and the said panchnama does not relate to any recovery having been made from any of the ....
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....dated 16.01.2024 granting extension of ED custody of both the petitioners to respondent No.2. In this regard, it would be relevant to note that the first petition bearing CRM-M-2191-2024 titled as Dilbag Singh @ Dilbag Sandhu was drafted on 11.01.2024 and the said case had come up for hearing before this Court on 15.01.2024. On 15.01.2024, this Court had passed a detailed order directing the Registry to clarify as to whether the present matter is to be heard by the Division Bench of this Court or is to be listed before a Single Bench. The relevant part of the said order is reproduced herein below: - "Learned Senior Counsel for the petitioner has pointed out that the petitioner, in view of the abovesaid judgments, had filed writ petition under Article 226 of the Constitution of India but since an objection was raised regarding the maintainability of the same thus, the instant petition under Section 482 of Cr.P.C. has been filed. Registry is thus, directed to clarify the following: 1) Whether in view of the abovesaid cases which have been filed under Article 226 of the Constitution of India and have been entertained by the Hon'ble Division Bench, the present petition is to be l....
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.... Pal Singh case (supra) had observed that it is a settled proposition of law that in case initial action/order is found to be illegal, then all subsequent and consequential proceedings would fall automatically and the said principle is applicable to judicial, quasi judicial and administrative proceedings equally and after considering various judgments, it was further observed that once an order at the initial stage is bad in law, then all further proceedings, consequent thereto, would be non-est and have to be necessarily set aside and on the basis of the said proposition of law, the Hon'ble Supreme Court held that since the impugned order in the said case could not be sustained, then as a consequence of the same, the subsequent proceedings, orders, FIR, investigation would stand automatically vitiated and would be liable to be set aside. Paragraphs No.107 to 111 of the said judgment are reproduced herein below: - "xxx xxx xxx 107. It is a settled legal proposition that if initial action is not in consonance with law, all subsequent and consequential proceedings would fall through for the reason that illegality strikes at the root of the order. In such a fact-situation, the leg....
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....li v. Narvadeshwar Mishra this Court held that if an order at the initial stage is bad in law, then all further proceedings consequent thereto will be non-est and have to be necessarily set aside. 35. In the instant case, as we have observed that the alleged sale deed dated 20-4-1992 in favour of Mayur Sahkari Avas Samiti has been avoid transaction, all subsequent transactions have merely to be ignored." 74. Since in the present case, the order of arrest, arrest memo and the remand order dated 09.01.2024 are held to be illegal and against law for the detailed reasons given herein above, thus, the subsequent order of remand and other consequential orders are also liable to be set aside. Moreover, this Court is of the view that even the order dated 16.01.2024 is illegal and thus, deserves to be set aside. 75. The facts of the judgments relied upon by counsel for respondent No.2 i.e. Mumbai International Private Limited case (supra) and Gurdev Singh's case (supra), are distinguishable from the facts of the present case and do not further the case of respondent No.2 and thus, the objection raised on behalf of respondent No.2 is liable to be rejected and is accordingly rejected. CO....