TaxTMI 
TaxTMI 
2024 (5) TMI 1673
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....lerkotla submit that the petitioner had been arrested in contravention of the provisions of Section 19(1) of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'the PMLA'), insofar as there is non-compliance on the part of the Investigating Officer with regard to the provisions of Section 19(1) of the PMLA. The first remand order dated 07.11.2023 and the subsequent remand orders are also vitiated as the Special Court had not taken into account the provisions of Section 19(1) of the PMLA. Counsels further submit that the petitioner was in fact picked up and arrested from his Party office situated at Tara Colony, Village Gounspura, Ludhiana Road, Malerkotla at 12:00 p.m. without any written orders and was forcibly taken to the office of the Directorate of Enforcement (E.D.) at Jalandhar where he was formally arrested at 04:25 p.m. on 06.11.2023. The petitioner was willing to cooperate with the investigating agency and had duly replied to the summons which were sent to him for joining investigation. The first summons was sent to him on 04.08.2023 requiring his presence on 08.08.2023, but as the petitioner had prior plan to travel to Canada, he communicate....
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...., counsels have relied upon the judgments of the Supreme Court in the cases of Pankaj Bansal Vs. Union of India and others, 2023 SCC OnLine SC 1244, Ram Kishor Arora Vs. Directorate of Enforcement, 2023 SCC OnLine SC 1682, Vijay Madanlal Choudhary Vs. Union of India, 2022 SCC OnLine SC 929, V. Senthil Balaji Vs. State and others, 2023 SCC OnLine SC 934, Prabir Purkayastha Vs. State (NCT of Delhi), 2024 SCC OnLine SC 934 and of this Court in the cases of Pranav Gupta Vs. Union of India, 2023 SCC OnLine P&H 3598 & Roop Bansal Vs. Union of India and another, 2023, SCC OnLine P&H 3597. SUBMISSIONS BY THE RESPONDENTS 4. Learned counsels for the respondents, however, submit that the mandatory provision of Section 19(1) of the PMLA was complied with while effecting the arrest of the petitioner, inasmuch as the written grounds of arrest were duly furnished to him in the presence of one advocate Sh.Nakul Kapoor and the petitioner had acknowledged receipt by signing the same. The petitioner had been repeatedly asked to join the investigation but he refused to do so. The FIR and ECIR (Enforcement Case Information Report) had been registered against the petitioner alleging the diversion ....
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....ated 18.03.2024 (Annexure A-1) which has not been challenged and the question as to whether the arrest of the petitioner is illegal, will not arise for adjudication at this stage. Counsel further submits that the Special Court had taken cognizance of the offence after duly taking into account all the relevant factors stated above. 5. In support of their submissions, reliance is placed upon the judgment of the Supreme Court in the cases of Pankaj Bansal Vs. Union of India and others (supra) and Ram Kishor Arora Vs. Directorate of Enforcement (supra). FACTUAL MATRIX 6. FIR No. RCCHG2022A0012 dated 28.03.2022 was registered under Sections 420, 421, 406, 409 read with Section 120-B IPC and Section 13(2) read with Section 13(1) (d) of the Prevention of Corruption Act, 1988 on the written complaint made by the Deputy Zonal Manager (Recovery) Bank of India on 01.12.2020 to Central Bureau of Investigation, Anti-Corruption Branch located in Chandigarh wherein it was alleged that the petitioner, who was the Director and Guarantor of M/s Tara Corporation Limited (renamed as Malaudh Agro Limited w.e.f. 24.09.2018) along with his other family members (who were also Directors and G....
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..... Now, therefore, in exercise of the powers conferred on me under Sub-section (1) of Section 19 of the Prevention of Money Laundering Act, 2002 (15 of 2003), I hereby arrest the said Sh. Jaswant Singh s/o Gurmukh Singh at 04:25 p.m. hours on 06.11.2023 and he has been informed of the grounds for such arrest." GROUNDS OF ARREST "Sh. Jaswant Singh S/o Gurmukh Singh R/o Village Gajjan Majra, Distt. Malerkotla, Punjab, is being arrested u/s 19(1) of the Prevention of Money Laundering Act, 2002 for commission of an offence u/s 3 of the Prevention of Money Laundering Act, 2002 and chargeable u/s 4 of the Prevention of Money Laundering Act, 2002. Sh. Jaswant Singh S/o Gurmukh Singh R/o Village Gajjan Majra, Tehsil Malerkotla, Punjab, had been issued with multiple summonses u/s 50(2) of the Prevention of Money Laundering Act, 2002 which were duly served to him, however, despite availing reasonable opportunity he has not joined the investigation and failed to comply the summons. The evidence gathered by this Directorate indicates that Sh. Jaswant Singh is actually involved in one or more of processes or activities related to the proceeds of crime being....
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....y for the journey from the place of arrest to the Special Court or Magistrate's Court." It is manifest from reading of Section 19(1) of the PMLA that before effecting arrest the following conditions must be fulfilled :- (i) that the officer has to be authorized by the Central Government, (ii) he must have material in his possession, (iii) on the basis of such material he must have reason to believe that the accused has been guilty of an offence punishable under PMLA, (iv) and the reasons should be recorded in writing by him and (v) the person who is arrested should be informed about the grounds of arrest. 10. The Constitutional validity of Section 19(1) of the PMLA was challenged and the Supreme Court in the case of Vijay Madanlal Choudhary Vs. Union of India (supra) while upholding the validity of Section 19(1) had observed as under: 88. Section 19 of the 2002 Act postulates the manner in which arrest of person involved in money-laundering can be effected. Sub-section (1) of section 19 envisages that the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Govern....
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....n 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." In the context of this provision, the challenge is that in absence of any formal complaint being filed, arrest under section 19 is being made by the authorised officers. Whereas, the purport of section 167 of the 1973 Code would suggest that the person can be arrested by the jurisdictional police without warrant under section 41 of the 1973 Code only upon registration of a complaint under section 154 of the 1973 Code in connection with cognizable offence or pursuant to the order of the court. Even, in case of arrest pursuant to the order of the court, a formal complaint against su....
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.... resigned from the company on 11.08.2016. The account of M/s TCL was declared as fraud on 09.02.2018 on the basis of forensic audit report, and the matter was reported to RBI. The petitioner had been issued summons to join investigation on several occasions but he did not appear before the investigating agency. The 1st summons was issued on 04.08.2023 and he had left on 05.08.2023 for Canada. He is stated to have returned from Canada on 25.09.2023. The respondents have stated that the petitioner has returned to India via Nepal which has not been controverted. The E.D. officials are stated to have gone to his premises on 06.11.2023 at 12:00 noon for service of summons and he is stated to have accompanied them to their zonal office for recording his statement. The summons has been duly signed by him. His arrest was effected at 04:30 p.m. at Jalandhar as it is stated in the reply that after reaching the office of ED, he refused to tender his statement and keeping in view entire circumstances i.e. non-appearance on summons, reasons to believe on basis of material in possession, hiding his arrival from Canada from respondents, wilful non-appearance in response to 4 summons and refusal t....
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....ommunicated which would enable the accused to know as to why he has been arrested and he can seek recourse to the legal remedies available under the law. It has been further held in the case of Pankaj Bansal Vs. Union of India and others (supra) that the sensitive material need not be divulged by relying upon Vijay Madanlal Choudhary Vs. Union of India (supra) and even in the grounds of arrest which are required to be furnished to the arrested person, such material can be redacted. In the instant case, there is no dispute that the written grounds of arrest were duly communicated to the petitioner which bears his signature. His counsel was also informed about the grounds of arrest. 15. In the case of Roop Bansal Vs. Union of India (supra), the written grounds of arrest had not been furnished to the petitioner therein and his case was found to be similar to the case of Pankaj Bansal in whose case the judgment titled as Pankaj Bansal Vs. Union of India (supra) had been delivered by the Supreme Court and both were arraigned as an accused in the same ECIR, and in such circumstances this Court had termed the arrest to be illegal. 16. In the case of Pranav Gupta Vs. Union of India (....
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....ischarge and during this period, he be kept under fully adequate/sufficient security." 18. It is, thus, manifest that the order of remand which runs into six pages has been passed with application of mind and not mechanically or in a routine manner. 19. At this juncture, reference may be made to the judgment of the Supreme Court in the case of Ram Kishor Arora Vs. Directorate of Enforcement (supra). In that case, the question which had arisen whether the document containing the grounds of arrest which was taken back from the accused after obtaining his signatures was sufficient compliance of Section 19(1) of the PMLA. The relevant extract of the judgment is reproduced hereunder: "24. In so far as the facts of the present case are concerned, it is not disputed that the appellant was handed over the document containing grounds of arrest when he was arrested, and he also put his signature below the said grounds of arrest, after making an endorsement that "I have been informed and have also read the above-`mentioned grounds of arrest." The appellant in the rejoinder filed by him has neither disputed the said endorsement nor his signature below the said endorsement. The o....
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....r as the submission of the counsel for the petitioner that the grounds of arrest do not contain the material which had formed the basis of his arrest, it is noticed only to be rejected for the reason that it is nowhere provided that the sufficiency of grounds of arrest is to be examined. 23. Furthermore, the counsel for the petitioner has also contended that the entire 'material in possession' against the arrested petitioner, including the memo of arrest and the grounds of arrest had been sent to the Adjudicating Authority on 08/09.11.2023 whereas it should have been sent immediately hence there is violation of Section 19(2) of PMLA. The argument is liable to be rejected because it is not specified that information has to be sent on the day the arrest is effected. Therefore, we do not find any illegality in the same being sent to the Adjudicating Authority a day after. Even if it has been sent after 02 days, it could not be said that the provisions of Section 19(2) of the PMLA have not been complied with. The expression 'as soon as possible' in relation to the communication of the grounds of arrest have been interpreted by the Supreme Court in the case of Ram Kis....