TaxTMI 
TaxTMI 
2024 (12) TMI 163
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....ons 12 IV. Judicial Precedents Cited 15 V. Submissions on behalf of Petitioner 16 VI. Submissions on behalf of Respondent 21 VII. Analysis 26 [VII.A] Relevant Extracts from Case Laws 27 [VII.A.1] Grounds of Arrest 27 [VII.A.2] Reasons to Believe 34 [VII.A.3] Judicial Review 36 [VII.A.4] No merits review 40 [VII.A.5] Inclusion of exculpatory material 41 [VII.A.6] Need and necessity to arrest 42 [VII.B] Principles Culled Out 44 [VII.B.1] On Grounds of Arrest 44 [VII.B.2] Information to the Accused and Compliance 45 [VII.B.3] Reasons to Believe 46 [VII.B.4] Need and Necessity to Arrest 47 [VII.B.5] Relevance of Exculpatory Material 48 [VII.B.6] Judicial Review 48 [VII.B.7] Non-Cooperation of the Petitioner 49 [VII.B.8] Remand Orders 49 [VII.C] Assessment on Facts 49 [VII.C.1] ....
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....des and judgement was reserved. II. FACTUAL BACKGROUND 5. Mr. Vikram Chaudhary, Senior Counsel for the petitioner, has presented a sequence of dates and events which, as per petitioner, would itself bear out that the petitioner's arrest was illegal. 6. The petitioner is a 63-year-old former promoter of M/s Amtek Auto Ltd. ("AAL") which, over a period of time, burgeoned into various subsidiary and sister companies, that are broadly referred to as the 'Amtek Group'. Post global slowdown in 2008, Amtek faced liquidity constraints, as per the petitioner, leading to delay in meeting loan payments and commitments to interest. On 15th March 2016, ACI Ltd. ("ACIL") was declared a Non-Performing Account ("NPA") by IDBI Bank (a financial institution). Subsequently in 2018, the Bank of Maharashtra also declared it is an NPA. In the meantime, the Corporate Insolvency Resolution Proceedings ("CIRP") was initiated against AAL and other associate companies in 2017-2018. ACIL, petitioner, and other entities were declared 'wilful defaulter' by IDBI Bank on 25th July 2018, which was subsequently stayed by the Bombay High Court by order dated 24th October 2018 in W.P. 3656/2018. 7. A prel....
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....ents in the FIR, which was rejected by the CBI by letter dated 3rd May 2024. An application was moved by the ED before Special Judge (PMLA) on 15th May 2024, seeking copy of FIR along with chargesheet and other relevant documents. On 26th July 2024, Special Judge (PMLA) rejected the application by the ED seeking copy of FIR, chargesheet, and relied upon documents. 15. Petitioner appeared before the ED, pursuant to summons under Section 50 PMLA, on 19th June 2024 and his statement was recorded. On 20th June 2024, ED carried out search and seizure proceedings at petitioner's residence and statement was recorded under Section 17 PMLA. Petitioner again appeared on 5th July 2024 pursuant to summons; he was then asked to appear on 9th July 2024, on which day he was arrested. The Arrest Order dated 09th July 2024 is reproduced as under: 16. Ground of arrest were served to the petitioner on 09th July 2024; the portion highlighting the role of the petitioner as well as conclusions arrived at, are extracted as under for ready reference: 17. On 10th July 2024 petitioner was remanded to ED custody for 7 days. Further orders of remand were passed on 17th July 2024, 24th July 2024, and ....
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....a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a [Special Court or] Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the [Special Court or] Magistrate's Court." (emphasis added) 20.2 Rule 2(g) of the Prevention of Money-Laundering (The Forms and the Manner of Forwarding a Copy of Order of Arrest of a Person along with the Material to the Adjudicating Authority and its Period of Retention) Rules, 2005 ("Arrest Rules"): "(g) "material" means any information or material in the possession of the Director or Deputy Director or Assistant Director or any authorised officer, as the case may be, on the basis of which he has recorded reasons under sub-section (1) ....
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....ed envelope. (2) The Adjudicating Authority shall, on opening of the sealed envelope, forward Form-I duly filled in, signed and his name legibly written below his signature. The seal of the office of the Adjudicating Authority shall be affixed before forwarding the Form-I to the Arresting Officer as a token of receipt of the copy of order of the arrest and the material. (3) The Adjudicating Authority shall maintain registers and other records such as acknowledgement slip register, dak register, and register showing details of receipt of the copy of the order of the arrest along with the material for the purposes of this rule and shall ensure that necessary entries are made in the registers immediately on receipt of such order and the material." IV. JUDICIAL PRECEDENTS CITED 21. Principal case laws cited and relied upon by the Senior Counsel for petitioner are as follows: i. Vijay Madan Lal Chaudhary v. Union of India 2022 SCC OnLine SC 929; ii. Prem Prakash v Union of India, 2024 INSC 637; iii. Manish Sisodia v. Directorate of Enforcement 2024 SCC OnLine SC 1920; iv. Arvind Kejriwal v. Directorate of Enforcement 2024 INSC ....
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....l for petitioner traversed the evolution of law regarding Section 19 PMLA by the Supreme Court, through the various decisions listed above in paragraph 21. 26. Relying on the July 2022 decision in Vijay Madanlal Chaudhry (supra), particularly paragraphs 322 and 325, it was submitted that Section 19, PMLA provides discretion to arrest a person and there are inbuilt safeguards such as recording of reasons to believe the involvement of the person in the offence, recording in writing of grounds of arrest, and information to the person and then to the AA. This was to ensure that the authorised officers do not act arbitrarily, but are accountable for their judgment, not necessarily to arrest. If found vexatious, officers can be proceeded with and punishment can be inflicted under Section 52 of the PMLA. Arrest must be made if there was 'necessity' to arrest. 27. Relying on paragraphs 21, 28, and 39 of Pankaj Bansal (supra), an October 2023 decision of the Supreme Court, it was submitted that a mandate was introduced to supply a copy of written grounds of arrest to arrested person as a matter of course and without exception. Also, failure of the accused to respond to questions put t....
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....ncome Tax Rajkot v. Saurashtra Kutch Stock Exchange Limited (2008) 14 SCC 171, and Roop Bansal v. Union of India 2023 SCC Online P&H 3597. 31.2 The remand application failed to disclose whether compliance under Section 19 (2), PMLA to immediately forward a copy of the arrest order to the ED, along with the material, was done by the arresting officer. The ED stated that compliance was made on 10th July 2024 at 10:00 am, however, the statement appears to be a bald statement without any evidence. Further, it is not known whether the entire 'material in possession' was forwarded to the ED or not. 31.3 The arresting officer has adopted a pick-and-choose mechanism, and ignored the documents which were exculpatory in nature, inter alia the report of MKA, exemplified through the letter dated 17th September 2019, reports of auditors of three other group companies stating no fraud had taken place, the Delhi High Court setting aside the 'fraud' declaration by IDBI Bank and Bank of Maharashtra, stay on declaration of 'wilful defaulter' by the Bombay High Court and the Delhi High Court, culmination of insolvency proceedings into successive resolution plans in the companies, omission to co....
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....that, as per the Supreme Court's decision in Arvind Kejriwal (supra), the purpose of furnishing 'reasons to believe' was to enable the arrestee to challenge the validity of arrest; arrest was based on opinion of the officer which is open to judicial review, not merits review; courts could not inquire into the correctness or otherwise of the facts, except where they were not supported by any evidence, or the finding was perverse, or the conclusion was illogical; all other attempts to challenge the material relied upon by the ED can be raised at the time of a bail application under Section 45 PMLA. It was highlighted that detailed grounds of arrest, running into 30 pages in 35 paragraphs, discussing the material in possession, forming the reasons to believe that the petitioner was guilty, cannot be considered as insufficient. 32.2 The allegation, that exculpatory material was not considered, has no basis. The opinion of the arresting officer is formed on the basis of 'material in possession' as on the date of arrest. It is not the case of the petitioner that the so-called exculpatory material being referred to, was 'in possession of the I.O' on the date of arrest. Notwithstanding,....
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....ary directions to the ED for compliance of this order. 15. However, the investigation/enquiry being carried out by the SFIO and the CBI shall continue and will not be prejudiced by this order. Both the agencies shall fully cooperate with and complement the ED in the process of collection of evidence. Copies of the enquiry reports submitted on behalf of the SFIO and the CBI shall be provided to learned Amicus Curiae as well as learned counsel for the petitioner. 16. We also make it clear that mere closure/settlement of the accounts by the banks concerned shall not come into the way of the ED to investigate the matter fully and also regarding the entire amounts involved in the fraud." 32.6 The setting aside of the fraud account declaration was basis State Bank of Indias v. Rajesh Aggarwal (supra) on the grounds of natural justice and was not merely on merits. The Supreme Court in Punjab National Bank v. Vijay Soni, SLP (Civil) 47470/2023 while staying a decision of the Madhya Pradesh High Court in Surendra Patwa v. Reserve Bank of India, WP 23800/2021 stated that registration of an FIR could not be quashed for non-compliance of a circular, which was subsequently ....
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....nces. It was not necessary that at the time of arrest an IO would be aware of all concealed properties which are 'proceeds of crime' or 'benami' and therefore, it is not necessary to exercise powers under Section 5 PMLA before Section 19 PMLA. 32.12 In Pankaj Bansal (supra), in paragraph 28, the Supreme Court highlighted that 'mere' non-cooperation would not be enough to arrest a person under Section 19, however, non-cooperation along with other factors, can form need and necessity to arrest. Reliance in this regard was placed on P. Chidambaram (supra) in paragraph 59. 32.13 Remand order is not routine or mechanical, as is evident from bare perusal, since it has been passed after due consideration of material on record. 32.14 The arrest itself is part of investigation, as noted in Vijay Madanlal Chaudhary (supra), as also in V. Senthil Balaji (supra), in particular paragraph 48 which notes opinion in Vijay Madanlal Chaudhary (supra). 32.15 In H.M. Rishbud (supra), the Supreme Court notes that investigation under Cr.P.C., includes the arrest of suspected offender. It is also opined so, by the Supreme Court in Naser Bin Abu Bakr Yafai (supra). VII. ANALYSIS 33. Hear....
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.... believe" that the person to be arrested, is guilty of an offence punishable under the PML Act. • The person arrested, as soon as may be, must be informed of the grounds of arrest. These preconditions act as stringent safeguards to protect life and liberty of individuals. We shall subsequently interpret the words "material", "reason to believe", and "guilty of the offence". Before that, we will refer to some judgments of this Court on the importance of Section 19 (1) and the effect on the legality of the arrest upon failure to comply with the statutory requirements. 10. In Pankaj Bansal v. Union of India and others, 9 interpreting Section 19 of the PML Act with reference to Article 22 (1) of the Constitution of India,10 this Court has observed: "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 th....
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....of the offence, and to furnish the reasons to the arrestee. This ensures an element of fairness and accountability. 13. The decision in V. Senthil Balaji (supra) has also examined the interplay between Section 19 of the PML Act and Section 167 of the Code. The magistrate is expected to do a balancing act as the investigation is to be concluded within 24 hours as a matter of rule. Therefore, the investigating agency has to satisfy the magistrate with adequate material on the need for custody of the arrestee. Magistrates must bear this crucial aspect in mind while examining and passing an order on the DoE's prayer for custodial remand. More significantly, the magistrate is under the bounden duty to ensure due compliance with Section 19 (1) of the PML Act. Any failure to comply would entitle the arrestee to be released. Section 167 of the Code, therefore, enjoins upon the magistrate the necessity to satisfy due compliance of the law by perusing the order passed by the authority under Section 19 (1) of the PML Act. Upon such satisfaction, the magistrate may consider the request for custodial remand. 14. Pankaj Bansal (supra) reiterates V. Senthil Balaji (supra) to hol....
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.... ... 18. Vijay Madanlal Choudhary (supra) affirms the aforesaid ratio, and states that the safeguards provided as preconditions in Section 19 (1) of the PML Act have to be fulfilled by the designated officer before affecting arrest. The safeguards are of a higher standard. They ensure that the designated officer does not act arbitrarily, and is made accountable for their judgment about the 'necessity to arrest' the person alleged to be involved in the offence of money laundering, at the stage before the complaint is filed. Paragraph 89 reads as under: "89...The safeguards provided in the 2002 Act and the preconditions to be fulfilled by the authorised officer before effecting arrest, as contained in section 19 of the 2002 Act, are equally stringent and of higher standard. Those safeguards ensure that the authorised officers do not act arbitrarily, but make them accountable for their judgment about the necessity to arrest any person as being involved in the commission of offence of money-laundering even before filing of the complaint before the Special Court under section 44(1)(b) of the 2002 Act in that regard. If the action of the authorised officer is f....
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....ase, we are examining Section 19 (1) of the PML Act and the rights of the accused. We are not concerned with the ECIR. The relevant question arising is - whether the arrestee is entitled to be supplied with a copy of the "reasons to believe"? Paragraph 89 in Vijay Madanlal Choudhary (supra) refers to the importance of recording the "reasons to believe" in writing, and states this is mandatory. Further, both Pankaj Bansal (supra) and Prabir Purkayastha (supra) hold that the failure to record "reasons to believe" in writing will result in the arrest being rendered illegal and invalid. Paragraph 131 of Vijay Madanlal Choudhary (supra), which has been quoted subsequently, states that Section 19 (1) requires in-depth scrutiny by the designated officer. A higher threshold is required for making an arrest, necessitating a review of the material available to demonstrate the person's guilt. Production of the "reasons to believe" before the Special Court/magistrate, cannot be construed and is not the same as furnishing or providing the "reasons to believe" to the arrestee who has a right to challenge his arrest in violation of Section 19 (1) of the PML Act. ... 28. Providin....
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....of judicial review would not be a cause of concern. Doubts will only arise when the reasons recorded by the authority are not clear and lucid, and therefore a deeper and in-depth scrutiny is required. Arrest, after all, cannot be made arbitrarily and on the whims and fancies of the authorities. It is to be made on the basis of the valid "reasons to believe", meeting the parameters prescribed by the law. In fact, not to undertake judicial scrutiny when justified and necessary, would be an abdication and failure of constitutional and statutory duty placed on the court to ensure that the fundamental right to life and liberty is not violated. ... 41. DoE has drawn our attention to the use of the expression 'material in possession' in Section 19 (1) of the PML Act instead of 'evidence in possession'. Though etymologically correct, this argument overlooks the requirement that the designated officer should and must, based on the material, reach and form an opinion that the arrestee is guilty of the offence under the PML Act. Guilt can only be established on admissible evidence to be led before the court, and cannot be based on inadmissible evidence. While there is an ele....
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....t relied by the prosecution cannot be examined at the stage of charge, will not apply. The reason is simple and straightforward. Right to bail under Section 45 of the PML Act is not dependant on the stage of the proceedings. The power of the court under Section 45 is unrestricted with reference to the stage of the proceedings. All material and evidence that can be led in the trial and admissible, whether relied on by the prosecution or not, and can be examined. 43 On the question of burden of proof, Section 24 of the PML Act can be relied on by the prosecution. However, at the same time, the observations of this Court in Vijay Madanlal Choudhary (supra) with reference to clauses (a) and (b) of Section 24, as well as the burden of proof placed on the prosecution to the extent indicated in paragraph 57 refer to at least three foundational facts. These foundational facts are - criminal activity relating to the scheduled offence has been committed; property in question has been derived or obtained directly or indirectly by any person as a result of that criminal activity; and the person concerned is directly or indirectly involved in any process or activity connected with the said prop....
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.... (1) of the PML Act, a decision-making error can lead to the arrest and deprivation of liberty of the arrestee. Though not akin to preventive detention cases, but given the nature of the order entailing arrest - it requires careful scrutiny and consideration. Yet, at the same time, the courts should not go into the correctness of the opinion formed or sufficiency of the material on which it is based, albeit if a vital ground or fact is not considered or the ground or reason is found to be non-existent, the order of detention may fail." (emphasis added) [VII.A.4] No merits review "65. Arguments raised on behalf of Arvind Kejriwal, which tend to dent the statements and material relied upon by the DoE in the "reasons to believe", though worthy of consideration, are in the nature of propositions or deductions. They are a matter of discussion as they intend to support or establish a point of view on the basis of inferences drawn from the material. It is contended that the statements relied upon by the DoE have been extracted under coercion, a fact that is contested and has to be examined and decided. This argument does not persuade us, given the limited power of judicial ....
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....to the DoE will be deleterious to the constitutional values of rule of law and life and liberty of persons. An officer cannot be allowed to selectively pick and choose material implicating the person to be arrested. They have to equally apply their mind to other material which absolves and exculpates the arrestee. The power to arrest under Section 19 (1) of the PML Act cannot be exercised as per the whims and fancies of the officer. 56. Undoubtedly, the opinion of the officer is subjective, but formation of opinion should be in accordance with the law. Subjectivity of the opinion is not a carte blanche to ignore relevant absolving material without an explanation. In such a situation, the officer commits an error in law which goes to the root of the decision making process, and amounts to legal malice." (emphasis added) [VII.A.6] Need and necessity to arrest "74. Therefore, the issue which arises for consideration is whether the court while examining the validity of arrest in terms of Section 19 (1) of the PML Act will also go into and examine the necessity and need to arrest. In other words, is the mere satisfaction of the formal parameters to arrest suffici....
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....s finally got crystallised and converged in the decision of Arvind Kejriwal (supra). In Arvind Kejriwal (supra), the Supreme Court traversed all the aforementioned decisions, placed them in context, and culled out certain principles. This would form the law as is applicable today. This Court does not consider it necessary to advert to all the prior judgments in their isolated contexts, particularly since the issue concerned in the matter at hand, which challenges the legality of arrest, was the issue before the Court in Arvind Kejriwal (supra) as well. The relevant extracts from Arvind Kejriwal (supra), segmented as per relevant issues involved, have already been reproduced above in paragraph [VII.A]. From this, the principles that flow are delineated as under: [VII.B.1] Grounds of Arrest 38. Power to arrest a person without a warrant from the Court is a drastic and extreme power and has been rightly circumscribed with strict safeguards by the legislature to prevent abuse. The ratio of decisions in Pankaj Bansal (supra) and Prabir Purkayastha (supra) that strengthened the view in Vijay Madanlal Choudhary (supra) were agreed to by the Supreme Court in Arvind Kejriwal (supra). ....
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.... position to be assessed is at the time when the arrest was originally made and what the authorities, as per law crystallised at that time, were obligated to do. In this case, the arrest was made on 09th July 2024, whereas the decision in Arvind Kejriwal (supra) was pronounced on 12th July 2024. It would be difficult to assume that on 09th July 2024 the ED could have foreseen that this additional requirement would be stipulated by the Supreme Court in the coming week. To hold the ED to have complied with that requirement of supplying the reasons to believe would defy logic. In any event, as argued by Special Counsel for ED, the grounds of arrest itself contain the substance of reasons to believe, being detailed in its narrative; same is evident from a perusal of the case file requisitioned from the ED. [VII.B.4] Need and Necessity to Arrest 41. In Vijay Madanlal Choudhary (supra), the Court held that a person applies for bail, the conditions stipulated in Sections 437, 438 and 439 of the Cr.P.C. would equally apply in addition to Section 45 of the PMLA. An argument was made by Senior Counsel for petitioner that "necessity to arrest" would also be an additional factor required....
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....PMLA. If reasons recorded by the authority are not clear and lucid, a deeper scrutiny is required. The opinion of the arresting officer is open to judicial review, however, is not open to a 'merits review'. Courts cannot inquire into the correctness and otherwise, of the facts found, except to see if the findings are perverse, and whether they have a reasonable nexus with the power (of arrest) exercised; the conclusion has to logically flow from the facts. Review of errors of law inter alia of mis-supplied or mis-construed constitutional and statutory terms or checking improper exercise of power is permitted. Judicial review may also be exercised when authorities have not considered grounds which are relevant or has accounted for grounds which are not relevant for arrest of the individual. [VII.B.7] Non-Cooperation of the Petitioner 44. The 'right against self-incrimination' is a constitutional principle crystallised in Article 20 (3) of the Constitution of India, 1950. In Pankaj Bansal (supra), the Supreme Court held that 'mere non-co-operation' could not be enough to arrest a person under Section 19, PMLA. However, it has also been observed by the Supreme Court in CBI v. An....
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....pinion was based on the entire material in possession of the arresting officer; secondly, whether the said decision is perverse and logically flows from the facts; thirdly, whether there are any errors of law i.e. mis-application or mis-construction of constitutional or statutory terms; and fourthly, whether there is an improper exercise of power. 48. As clarified and reiterated consistently in Arvind Kejriwal (supra), this Court is not considering the correctness of the opinion or the sufficiency of the material, except if a vital ground is not considered or any reason found to be non-existent [see paragraph 60 and 61 of Arvind Kejriwal (supra)]. For this purpose, a detail examination of the grounds of arrest dated 09th July 2024 bears out the following: 48.1 Bank of Maharashtra's Stressed Assets Management Branch ("SAMB") submitted a complaint to the CBI on 21st October 2022 alleging that a wrongful loss of Rs.289 Crores was caused to the Bank by ACIL, Arvind Dham, AAL (Corporate Guarantor), Alliance Integrated Metaliks Limited (Corporate Guarantor), and unknown public servants/persons. 48.2 Basis the above information, the CBI registered FIR RC2202022E0019 on 29th Decem....
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....ned; payments for the acquisition of plant and machinery were made through group companies and were repetitive in nature; sale of assets of about 10% or more of net worth or Rs.100 Crores, whichever is lower, were made without approval from lenders; plant and machinery installed in the plant could not be reconciled with the register; stocks worth Rs.157.25 Crores were written off or disposed without being recorded in the books of accounts, and the sale realisation was not accounted for; stocks worth Rs.119.80 Crores were shown as sold for only Rs.12.55 Crores; related party transactions with group companies or associate companies were not disclosed in annual financial statements; amounts received from the promoters' company were credited to bank accounts maintained with banks other than the consortium of banks. 48.9 The directions of the Supreme Court for further investigation in Jaskaran Singh Chawla (supra) on 27th February 2024 noted allegations of huge money laundering pursuant to which, the PMLA investigation ensued. [VII.C.2] The ED Investigation 49. The following were the results of the ED investigation: 49.1 The loan exposure to various banks when the CAP was in....
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....ng their Aadhar and PAN details. The list of such employees is provided in paragraph 31(o) of the grounds of arrest, which bears out that peons, mechanics, office boys who were 7th, 8th or 10th class pass, were made directors. 49.9 During investigation, petitioner did not provide any details of his assets/properties which were held beneficially by him, allegedly benami, and gave details of only 6 immovable properties. 49.10 Search and seizure action under Section 17(1) of the PMLA was initiated at more than 40 locations on 20th June 2024. Statements recorded under Section 17 of the PMLA of various individuals from the company who corroborated would have been ascertained during the investigation including the 500 registered companies, the opacity of the shareholders, 200 odd properties being beneficially owned by petitioner and other family members, fraudulent diversions, etc. 49.11 Petitioner had provided an overall personal guarantee of Rs.15,560 Crores against the loans taken for which personal insolvency proceedings have also been invoked. 49.12 23 creditors have submitted a claim of Rs.38,760 Crores before the resolution professional. Against this, petitioner submit....
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....ores and the lenders including many public banks have been struggling since 2015 in order to somehow recover the said liabilities, the process for which has now culminated into insolvency proceedings where a haircut of 99.91% of the amount has been proposed by petitioner. All this has potentially led to the ED to conclude that public money has been utilised for unscheduled and illegal purposes, not sanctioned by the financing arrangements, the trail of which is yet to be unearthed completely. 55. At the stage of framing the grounds of arrest, some investigation had already been conducted by the ED significantly pursuant to directions by the Supreme Court in Jaskaran Singh Chawla (supra) and, at the stage of arrest, it was evident that more investigation was required, and there was a potential of tampering of evidence and dissuading persons who are associated with the company (being lower in hierarchy to the petitioner) to give proper disclosures, as also to prevent committing further offences in terms of further diversion of funds and dissipating, obscuring, and obfuscating the money trail. The material which was in possession of the ED seems to have been relied on. [VII.C.4]....
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....f the Supreme Court in Rajesh Aggarwal (supra) on grounds of natural justice. Special Counsel for ED significantly relied upon on the decision in Surendra Patwa (supra) which had quashed the FIR setting aside the 'fraud' declaration of an entity. The Supreme Court had not only stayed the said order of the Madhya Pradesh High Court, but also specifically stated that it will not be read as a precedent that the registration of an FIR would be quashed or non-compliance of an RBI circular and that the quashing of FIR would remain stayed. Essentially, the aspect of 'no fraud' declaration being set aside and quashing of FIR were essentially separate issues in principle and benefit of the same cannot be given to the petitioner. 56.6 The declaration of 'wilful defaulter' being set aside cannot be used to completely subsume what seems to be a large-scale diversion of funds of public money since issues of 'wilful defaulter' are based on technical grounds, while offence of money laundering involves use, utilisation, possession, concealment, and projection as untainted property of the proceeds of crime. It would be difficult, at this stage, for the IO to conclude that basis the letter by MKA....
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....cribing the scope of judicial review at the stage when legality of the arrest is challenged. In this regard, the following paragraphs are being extracted for ready reference: "65. Arguments raised on behalf of Arvind Kejriwal, which tend to dent the statements and material relied upon by the DoE in the "reasons to believe", though worthy of consideration, are in the nature of propositions or deductions. They are a matter of discussion as they intend to support or establish a point of view on the basis of inferences drawn from the material. It is contended that the statements relied upon by the DoE have been extracted under coercion, a fact that is contested and has to be examined and decided. This argument does not persuade us, given the limited power of judicial review, to set aside and quash the "reasons to believe". Accepting this argument would be equivalent to undertaking a merits review. 66. Arvind Kejriwal can raise these arguments at the time when his application for bail is taken up for hearing. In bail hearings, the court's jurisdiction is wider, though the fetters in terms of Section 45 of the PML Act have to be met. Special Court would have to independ....
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....Director/Art Officer Rakesh Kumar al DR PrDirectorate of Enforcement Ministry of Finance / Govt. of India New Delhi Mr. Arvind Dham S/o Sh. Walaiti Lal Dham. R/o: Farm House No. 41, Prakrati Marg, Sultanpur, New Delhi 110030. 9/07/2024. Signature et person arrested HDFC BANK RZ-2, Opp. Police Station Delis-37 A 09/07/2024 14. Chas 9/7/24 Document 2 33. PMLA ROLE OF ARVIND DHAM IN MONEY LAUNDERING UNDER a. That there is sufficient evidence on record which clearly brings out that the above specified offence is being perpetually committed with full disregard to the process of law with an intention to launder proceeds of crime. You have actively involved yourself in acquiring Proceeds of Crime as submitted above. OF ENE b. You have evidence in your exclusive possession and can very well tamper with the same by planting forged documents in your favor as היון evidence from statement of the employees, dummy directors by abusing your influence as the promoter of Amtek group of companies. c. That after the IBC proceedings have commenced, you have started to sell ma....