High Court of Punjab and HaryanaCRM-M/2191/2024allowed

Dilbag Singh Alias Dilbag Sandhu v. Union Of India And Another

2024-02-08Mr. Justice Vikas Bahl111 pages

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"It is, therefore, most respectfully prayed that the present petition may kindly be allowed and the (a) Impugned Arrest Order dated 08.01.2024 (Annexure P&3) passed by respondent No.2; (b) Impugned Arrest Memo dated 08.01.2024 (Annexure P&4) prepared by respondent No.2; (c) Impugned Order dated 09.01.2024 (Annexure P&7) passed by Sessions Judge&cum&Special Judge (under PMLA, 2002), Gurugram passed in application vide CRM No.35 of 2024 (Annexure P&6) in ECIR No.GNZO/19/2023 dated 23.09.2023 under Section 65 of the PMLA Act, 2002 may kindly be set&aside since the petitioner was illegally arrested and remanded to ED Custody in gross abuse and 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 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."

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#% "It is, therefore, most respectfully prayed that the

present petition may kindly be allowed and the (a) Impugned Arrest Order dated 08.01.2024 (Annexure P&

2) passed by respondent No.2; (b) Impugned Arrest Memo dated 08.01.2024 (Annexure P&3) prepared by respondent No.2; (c) Impugned Order dated 09.01.2024 (Annexure P&7) and 16.01.2024 (Annexure P&9) passed by Sessions Judge&cum&Special Judge (under PMLA, 2002), Gurugram passed in application vide CRM No.35 of 2024 (Annexure P&6) in ECIR No.GNZO/19/2023 dated 23.09.2023 under Section 65 of the PMLA Act, 2002 may kindly be set&aside since the petitioner was illegally arrested and remanded to ED Custody in gross abuse and 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."

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2 #% "Section 19. Power to arrest.

(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub&section (1), forward a copy of the order along with the material in his possession, referred to in that subBsection, 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 twentyBfour 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."

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2 #% "39. To effect an arrest, an officer authorised has to assess and evaluate the materials in his possession. Through such materials, he is expected to form a reason to believe that a person has been guilty of an offence punishable under the PMLA, 2002. Thereafter, he is at liberty to arrest, while performing his mandatory duty of recording the reasons. The said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. Any nonBcompliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. Under subB section (2), the Authorised Officer shall immediately, after the arrest, forward a copy of the order as mandated under subB section (1) together with the materials in his custody, forming the basis of his belief, to the Adjudicating Authority, in a sealed envelope. Needless to state, compliance of subBsection

(2) is also a solemn function of the arresting authority which brooks no exception.

42. This provision is a reiteration of the mandatory compliance of Section 19 of the PMLA, 2002. It is in the nature of a warning to an officer concerned to strictly comply with the mandate of Section 19 of the PMLA, 2002 in letter and spirit failing which he would be visited with the consequences. It is

his bounden duty to record the reasons 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 a remand 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 entitle the arrestee to get released. The Magistrate shall also peruse the order passed by the authority under Section 19(1) of the PMLA, 2002. Section 167 of the CrPC, 1973 is also meant to give effect to Section 19 of the PMLA, 2002 and therefore it is for the Magistrate to satisfy himself of its due compliance. Upon such satisfaction, he can consider the request for custody in favour of an authority, as Section 62 of the PMLA, 2002, does not speak about the authority which is to take action for nonBcompliance of the mandate of Section 19 of the PMLA, 2002. A remand being made by the Magistrate upon a person being produced before him, being an Independent entity, it is well open to him to

invoke the said provision in a given case. To put it otherwise, the Magistrate concerned is the appropriate authority who has to be satisfied about the compliance of safeguards as mandated under Section 19 of the PMLA, 2002. On the role required to be played by the Magistrate, qua a remand, we do not wish to go any further as it has been dealt with by this Court in Satyajit Ballubhai Desai v. State of Gujarat, (2014) 14 SCC 434:

"9. Having considered and deliberated over the issue involved herein in the light of the legal position and existing facts of the case, we find substance in the plea raised on behalf of the appellants that the grant of order for police remand should be an exception and not a rule and for that the investigating agency is required to make out a strong case and must satisfy the learned Magistrate that without the police custody it would be impossible for the police authorities to undertake further investigation and only in that event police custody would be justified as the authorities specially at the magisterial level would do well to remind themselves that detention in police custody is generally disfavoured by law.

The provisions of law lay down that such detention/police remand can be allowed only in special circumstances granted by a Magistrate for reasons judicially scrutinised and for such limited purposes only as the necessities of the case may require. The scheme of Section 167 of the Criminal Procedure Code, 1973 is unambiguous in this regard and is intended to protect the accused from the methods which may be adopted by some overzealous and unscrupulous police officers which at times may be at the Instance of an interested party also.

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 nonBcompliance of the mandate of Section 19 of the PMLA, 2002 would enure to the benefit of the person arrested. For such nonBcompliance, the Competent Court shall have the power to initiate action under Section 62 of the PMLA, 2002."

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2 #% "16. This Court had occasion to again consider the provisions of the Act of 2002 in V. Senthil Balaji vs. The State represented by Deputy Director and others , and more particularly, Section 19 thereof. It was noted that the authorized officer is at liberty to arrest the person concerned once he finds a reason to believe that he is guilty of an offence punishable under the Act of 2002, but he must also perform the mandatory duty of recording reasons. It was pointed out that this exercise has to be followed by the information of the grounds of his arrest being served on the arrestee.

It was affirmed that it is the bounden duty of the authorized officer to record the reasons for his belief that a person is guilty and needs to be arrested and it was observed that this safeguard is meant to facilitate an element of fairness and accountability. Dealing with the interplay between Section 19 of the Act of 2002 and Section 167 Cr.P.C, this Court observed that the Magistrate is expected to do a balancing act as the investigation is to be completed within 24 hours as a matter of rule and, therefore, it is for the investigating agency to satisfy the Magistrate with adequate material on the need for custody of the accused. It was pointed out that this important factor is to be kept in mind by the Magistrate while passing the judicial order. This Court reiterated that Section 19 of the Act of 2002, supplemented by Section 167 Cr.

P.C., provided adequate safeguards to an arrested person as the Magistrate has a distinct role to play when a remand is made of an accused person to an authority under the Act of 2002. It was held that the Magistrate is under a bounden duty to see to it that Section 19 of the Act of 2002 is duly complied with and any failure would entitle the arrestee to get released. It was pointed out that Section 167 Cr.P.

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 arrest is made under Section 19 of the Act of 2002. The Court seized of the exercise under Section 167 Cr.P.C. of remanding the person arrested by the ED under Section 19(1) of the Act of 2002 has a duty to verify and ensure that the conditions in Section 19 are duly satisfied and that the arrest is valid and lawful. In the event the Court fails to discharge this duty in right earnest and with the proper perspective, as pointed out hereinbefore, the order of remand would have to fail on that ground and the same cannot, by any stretch of imagination, validate an unlawful arrest made under Section 19 of the Act of 2002.

18. In the matter of Madhu Limaye and others was a 3&Judge Bench decision of this Court wherein it was observed that it would be necessary for the State to establish that, at the stage of remand, the Magistrate directed detention in jail custody after applying his mind to all relevant matters and if the arrest

suffered on the ground of violation of Article 22(1) of the Constitution, the order of remand would not cure the constitutional infirmities attaching to such arrest. 19.

Viewed in this context, the remand order dated 15.06.2023 passed by the learned Vacation Judge/Additional Sessions Judge, Panchkula, reflects total failure on his part in discharging his duty as per the expected standard. The learned Judge did not even record a finding that he perused the grounds of arrest to ascertain whether the ED had recorded reasons to believe that the appellants were guilty of an offence under the Act of 2002 and that there was proper compliance with the mandate of Section 19 of the Act of 2002. He merely stated that, keeping in view the seriousness of the offences and the stage of the investigation, he was convinced that custodial interrogation of the accused persons was required in the present case and remanded them to the custody of the ED! The sentence - 'It is further (sic) that all the necessary mandates of law have been complied with' follows - 'It is the case of the prosecution....' and appears to be a continuation thereof, as indicated by the word 'further', and is not a recording by the learned Judge of his own satisfaction to that effect."

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2 #% "ARREST

322. Section 19 of the 2002 Act postulates the manner in which arrest of person involved in money&laundering can be effected. Subsection (1) of Section 19 envisages that the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Government, if has material in his possession giving rise to reason to believe that any person has been guilty of an offence punishable under the 2002 Act, he may arrest such person. Besides the power being invested in high& ranking officials, Section 19 provides for inbuilt safeguards to be adhered to by the authorised officers, such as of recording reasons for the belief regarding the involvement of person in the offence of moneyBlaundering.

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.

regarding the necessity to arrest the person being involved in offence of moneyBlaundering. 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 complied by the authorised officer."

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2 #% "18. I have given my due consideration to the facts & circumstances of the case and the above mentioned arguments. The remand papers and other relevant documents have also been perused carefully.

19.

A perusal of record shows that in the present case there is no denial of the fact that for the commission of scheduled offence, nine FIRs have been lodged in two Police Stations of District Yamuna Nagar, i.e. Two FIRs in Police Station Bilaspur and seven FIRs in Police Station Pratap Nagar. It has been alleged by the applicant&Directorate of Enforcement that during the course of investigation of the above mentioned FIRs, it was found that ultimate beneficiary of cheating/fraud was the accused who had dealt with proceeds of crime. In such circumstances, in my considered opinion, at this prima facie stage when investigation is still at infant stage this arguments of learned counsel for the accused is not tenable that a false story has been cookedBup by the Directorate of Enforcement with regard to commission of offence under the Prevention of Money Laundering Act, 2002, and the accused has no nexus whatsoever with the same.Such a conclusion can be drawn at the time of conclusion of trial only.

20.

It has been alleged by the Directorate of Enforcement that during search of the premises of the accused various E& Rawana 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 nonB cooperative, 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 investigation, a prima facie case for the commission of offence under the Prevention of Money Laundering Act, 2002 has been found, the applicant/Directorate of Enforcement is duty bound to trace the money, reveal the modus oprendi adopted by the accused for generating proceeds of crime and its circulation from one source to another. In my considered opinion the above mentioned goal can be achieved only when the opportunity is given to the applicant&Directorate of Enforcement to interrogate the accused in custody.

23.

As a sequel to above mentioned discussion, in my considered opinion the applicant&Directorate of Enforcement has a good and sufficient reason to claim the custody of accused person for his interrogation. However, in my opinion in view of facts and circumstances of the instant case and other mitigating circumstances, it shall be just & proper that the accused is remanded into custody of Directorate of Enforcement for a period of 07 (seven) days.

24.

In view of above mentioned observations, the application in hand is hereby partly accepted and the accused is remanded into ED custody for a period of 07 days. The accused be produced in the court on 16.1.2024. It is further directed that

the Investigating Officer of the case shall get the accused examined medically before proceeding for custodial interrogation and his custody shall not be transferred to any other agency without prior order of the competent authority. 25.

At this stage, an application has been moved by the learned counsel for the accused seeking for permission to interact with the accused during the remand period. In addition to above the learned counsel for the accused has also requested to provide facility of medicines and other facilities as advised by the Medical Officer.

22.

In view of above mentioned application, it is hereby ordered that the Investigating Officer shall allow the accused to meet his counsel on each and every date, during custody period, for one hour daily, i.e. from 09:00 a.m. to 10:00 a.m. It is further directed that all the facilities as prescribed/advised by the Medical Officer, including medicines & equipments shall be provided by the Directorate of Enforcement.

23.

The papers be put up on 16.1.2024."

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2 #% "29(h) The Petitioner was not detained from 04.01.2024 and he was free in his residence until his arrest on 08.01.2024 upon "prima facie" case of commission of money laundering against him. Even the Panchnama endorses this fact that: Dilbag Singh, Rajinder Singh and their family members had proper rest and food during the course of search

proceedings.

35.

The content of Ground C is expressly denied as being wrong, and vexatious in nature. In response, it is submitted that no restrictions were imposed upon the Petitioner until his arrest on 08.01.2024. The Petitioner and other persons were free and at their own sweet will to loiter with their own premises during the duration of the search as general practice and this cannot be termed 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 MoneyB 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." B# +

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in exercise of powers under Section 73 PMLA, the central government has framed "The Prevention of MoneyB 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"

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"F. Procedure relating to Search:

No person, including the Petitioner, were detained during the search proceedings and they had proper rest and food during the course of proceedings. Further by virtue of Rule 3(7) and (8) of 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, 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. Also, they were allowed to follow their daily routine. In no circumstances they were detained or asked compulsorily be in the premises." D#+ 2#" "+ '&+ # 00$ # %

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"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 or aircraft 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."

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On a studied analysis being made of the said arguments, it appears, that the learned ASG concerned, has visibly over focused upon drawing a semantic distinction inter&se arrest and custody, thus through his making reliance upon the judgments (supra).

10.

Moreover, he has also emphasized, that the above manner of accompanyings 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 the above argument, but is again planked, upon the trite evident fact, that unless the accused had willingly accompanied the E.D. officials concerned, thus in their private vehicles or in the vehicle of their relatives, thereupon theirs in the above mode of theirs accompanying the E.D. officials to the E.D. headquarters, located at Delhi, would be construed to be theirs thereby then, thus becoming unlawfully restrained. However, when the material in the above regard is grossly amiss, rather material emerges, that the accused had accompanied, the E.D. officials, on 27.10.2023, thus in the respectively seized vehicle or in the vehicles belonging to the E.D. officials. Therefore, the said mode of the accused accompanying the E.D.

officials, thus cannot be construed to be theirs either voluntarily or willingly accompanying them, to the E.D. headquarters, nor thereby the said manner of accompanyings of the accused with the E.D. officials, can be termed to be in pursuance to theirs becoming summoned, thus for their interrogation being made, at the E.D. headquarters located at Delhi. It appears that in the garb of the summons of 27.10.2023, the E.D.

attempted to give the otherwise unlawful restraint, thus the untenable colour of the accused voluntarily accompanying, the E.D. officials to the E.D. headquarters, located at Delhi.

17. Though, learned ASG concerned, has emphasized upon the factum, that since the learned Magistrate concerned, has made orders of remand vis&a&vis the accused, therefore the said orders of remand are construable to be condoning the above lapses.

18. However, the above argument, cannot become accepted by this Court, in view of the mandate recorded by the Hon'ble Apex Court in case titled as "V. Senthil Balaji V. State Represented by Deputy Director and Others" reported in 2023 SCC Online SC 934, wherein, it has been expostulated, that when material, does emerge rather suggestive that the parameters laid thereins, relating to application of judicial mind by the learned trial Judge concerned, to the makings of the relevant statutory breaches but become infringed, thus in his making the impugned order of remand, as such, upon, the vice of non&application of mind rather emerging, thus planked, upon breach being caused to the mandate of Section 19 of the Act of 2002, thereby the orders of remand are illegal." A Ashak Hussain Allah Detha @ Siddiqui

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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 detention without the sanction of judicial Tribunal. The word "arrest" has not been defined in the Code of Criminal Procedure or in any other law. The true meaning needs to be understood. The word "arrest" is a term of art. It starts with the arrester taking a person into his custody by action on or words restraining him from moving anywhere beyond the arrester's control, and it continues until the person so restrained is either released from custody or, having been brought before a Magistrate, is remanded in custody by the Magistrate's judicial act Christie v. Leachinsky, (1947) 1 All ER 567; Holgate Mohammed v. Duke, (1984) 1 All ER 1054.

Both quoted in WORDS AND PHRASES LEGALLY DEFINED Vol. 1, Third Edition page 113.) In substance, "arrest" is the restraint on a man's personal liberty by the power or colour of lawful authority. In its natural sense also "arrest" means the restraint on or deprivation of one's personal liberty.

10.

It is thus clear that arrest being a restraint on the personal liberty, it is complete when such restraint by an authority, commences. Whether a person is arrested or not does not depend on the legality of the Act. It is enough if an authority clothed with the power to arrest, actually imposes the restraint by physical act or words. Whether a person is

arrested depends on whether he has been deprived of his personal liberty to go where he pleases. It stands to reason, therefore, that what label the investigating officer affixes to his act of restraint is irrelevant. For the same reason, the record of the time of arrest is not an index to the actual time of arrest. The arrest commences with the restraint placed on the liberty of the accused and not with the time of "arrest" recorded by the Arresting Officers.

12.

xxx xxx. There is no authority in the Investigating Officers to detain a person for the purpose of interrogation or helping them in the enquiry.

13.

On this principle it follows that the detention of the Applicants on the midBnight of 19th July, 1989 was illegal if it was not for having committed an offence under the N.D.P.S. Act. If it was for having committed an offence, the detention was "arrest" and it commenced at the midBnight of 19th July, 1989."

A Mrs. Iqbal Kaur Kwatra &, "

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& "19. It is well 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 forthwith before the Magistrate and cannot wait for twenty&four hours."

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Unfortunately, the terms "custody", "detention" or "arrest" have not been defined in the CrPC, and we must resort to few dictionaries to appreciate their contours in ordinary and legal parlance.

9.1 The Oxford Dictionary (online) defines custody as imprisonment, detention, confinement, 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 matrix before us. 9.8 The Corpus Juris Secundum under the topic of Escape & Related Offenses; Rescue adumbrates that "Custody, within the meaning of statutes defining the crime, consists of the detention or restraint of a person against his or her will, or of the exercise of control over another to confine the other person within certain physical limits or a restriction of ability or freedom of movement." 9.9 This is how Custody is dealt with in Blacks Law Dictionary, (5th Edn. 2009):& Custody& The care and control of a thing or person.

The keeping, guarding, care, watch, inspection, preservation or security of a thing, carrying with it the idea of the thing being within the immediate personal care and control of the person to whose custody it is subjected. Immediate charge and control, and not the final, absolute control of ownership, implying responsibility for the protection and preservation of the thing in custody. Also the detainer of a mans person by virtue of lawful process or authority. The term is very elastic and may mean actual imprisonment or physical detention or mere power, legal or physical, of imprisoning or of taking manual possession.

not necessarily mean actual physical detention in jail or prison but rather is synonymous with restraint of liberty. U. S. ex rel. Wirtz v. Sheehan. Accordingly, persons on probation or released on own recognizance have been held to be in custody for purposes of habeas corpus proceedings.

10. A perusal of the dictionaries thus discloses that the concept that is created is the controlling of a persons liberty in the course of a criminal investigation, or curtailing in a substantial or significant manner a persons freedom of action." xxx xxx ##" # #

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2 #% "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 twentyBfour hours of the arrest."

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The authorised officer can still invoke power of issuing order of provisional attachment and contemporaneously send information to the jurisdictional police about the commission of scheduled offence and generation of property as a result of criminal activity relating to a scheduled offence, which is being made subject matter of provisional attachment. Even in the matter of searches and seizures under the 2002 Act, that power can be exercised only by the Director or any other officer not below the rank of Deputy Director authorised by him. They are not only high& ranking officials, but have to be fully satisfied that there is reason to believe on the basis of information in their possession about commission of offence of moneylaundering or possession of proceeds of crime involved in moneylaundering.

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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, 110 officers of Enforcement Directorate were mobilized from various office of ED such as Gurugram, Srinagar, Jammu, Jalandhar, Chandigarh, Delhi, Dehradun etc.

To conduct the search of this level, is humongous task as it requires co&ordination with multiple teams situated at multiple locations. There was seizure of cash (5.29 Cr), gold bullion (Valued at 1.

which needed to be collected at one place and preliminary scrutiny was required. The final search operation was concluded at around 03:00 pm on 08.01.2024 (after) the arrest of the petitioner and another coBaccused Kulwinder Singh. b) During the whole proceedings, Investigating officer was continuously on the move and coordinating with multiple teams and also performing his own duties. The petitioner was arrested on 08.01.2024 at 12:15 pm and the other coBaccused was arrested on the same day at 02:20 pm. They both were brought to this Gurugram Zonal office situated at #22, The Green, Rajokri, New Delhi at around 09:00 pm and were taken for medical examination in Civil Hospital, sector 10, Gurugram as per prescribed norms. Their medical was completed at around 11:45 PM on 08.01.2024.

c) After that both the accused were brought to the office. Further, the remand application was prepared late night and the next day on 09.01.2024 at 10:00 am both the accused were produced before the Special Court (PMLA), Gurugram seeking for their remand on 09.01.2024. Matter was taken up around 10:30 AM and thereafter, the Ld. Special Court (PMLA) Gurugram after hearing the arguments from both the sides adjourned the matter to 2:00 PM in order to peruse the relevant material available with Directorate to satisfy itself with respect to point of jurisdiction. At 2.00 PM, the Directorate produced the case file along with Reason to Believe (RTB) of the arrestees before the Ld. Judge and the Ld. Judge again deferred the matter for 4.00 PM thereby giving reasonable opportunity to the other side to present its arguments. During arguments, the Directorate, also requested the Hon'ble Judge for transit remand with respect to the remand applications. Later, after perusal of the case file, remand application and hearing arguments of both the sides, the Ld. Special Judge had

pronounced the order in the evening at around 5:30 PM, copy of which 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)." !

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2 #% "27. Further, when the second ECIR was recorded on 13.06.2023 'after preliminary investigations', as stated in the ED's replies, it is not clear as to 22 when the ED's Investigating Officer had the time to properly inquire into the matter so as to form a clear opinion about the appellants' involvement in an offence under the Act of 2002, warranting their arrest within 24 hours. This is a sine qua non in terms of Section 19(1) of the Act of 2002. Needless to state, authorities must act within the four corners of the statute, as pointed out by this Court in Devinder Singh v. State of Punjab , and a statutory authority is bound by the procedure laid down in the statute and must act within the four corners thereof.

28. We may also note that the failure of the appellants to respond to the questions put to them by the ED would not be sufficient in itself for the Investigating Officer to opine that they were liable to be arrested under Section 19, as that provision specifically requires him to find reason to believe that they were guilty of an offence under the Act of 2002. Mere nonBcooperation of a witness in response to the summons issued under Section 50 of the Act of 2002 would not be enough to render him/her liable to be arrested under Section 19. As per its replies, it is the claim of the ED that Pankaj Bansal was evasive in providing relevant information. It was however not brought out as to why Pankaj Bansal's replies were categorized as 'evasive' and that record is not placed before us for verification.

In any 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.

'confession' as the right against selfBincrimination 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 coBoperating 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 2002 enables the person arrested under Section 19 thereof to seek release on bail but it postulates that unless the twin conditions prescribed thereunder are satisfied, such a person would not be entitled to grant of bail.

The twin conditions set out in the provision are that, firstly, the Court must be satisfied, after giving an opportunity to the public prosecutor to oppose the application for release, that there are reasonable grounds to believe that the arrested person is not guilty of the offence and, secondly, that he is not likely to commit any offence while on bail. To meet this requirement, it would be essential for the arrested person to be aware of the grounds on which the authorized officer arrested him/her under Section 19 and the basis for the officer's 'reason to believe' that he/she is guilty of an offence punishable under the Act of 2002.

so as to avail the relief of bail. Therefore, communication of the grounds of arrest, as mandated by Article 22(1) of the Constitution and Section 19 of the Act of 2002, is meant to serve this higher purpose and must be given due importance. 33.

We may also note that the language of Section 19 of the Act of 2002 puts it beyond doubt that the authorized officer has to record in writing the reasons for forming the belief that the person proposed to be arrested is guilty of an offence punishable under the Act of 2002. Section 19(2) requires the authorized officer to forward a copy of the arrest order along with the material in his possession, referred to in Section 19(1), to the Adjudicating Authority in a sealed envelope.

Though it is not necessary for the arrested person to be supplied with all the material that is forwarded to the Adjudicating Authority under Section 19(2), he/she has a constitutional and statutory right to be 'informed' of the grounds of arrest, which are compulsorily recorded in writing by the authorized officer in keeping with the mandate of Section 19(1) of the Act of 2002. As already noted hereinbefore, It seems that the mode of informing this to the persons arrested is left to the option of the ED's authorized officers in different parts of the country, i.e., to either furnish 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."

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Individual liberty is a cherished right, one of the most valuable Fundamental Rights guaranteed by the Constitution to the citizens of this Country. On "liberty", William Shakespeare, the great play writer, has observed that "a man is master of his liberty". Benjamin Franklin goes even further and says that "any society that would give up a little liberty to gain a little security will deserve neither and lose both". The importance of protecting liberty and freedom is explained by the famous lawyer Clarence Darrow as "you can protect your liberties in this world only by protecting the other man's freedom; you can be free only if I am free." In India, the utmost importance is given to life and personal liberty of an individual, since we believe personal liberty is the paramount essential to human dignity and human happiness.

xxx xxx xxx 16.

The High Court has responded to each of these, by holding that the allegations projected in the grounds of detention have been corroborated in material particulars. Further, the allegations were not vague or ambiguous, and the material was sufficient for the detaining Authority to arrive at the subjective satisfaction that the detenu was acting in a manner prejudicial to the maintenance of the public order. The

High Court has also pointed out that the statement incriminating himself under Section 161 was prepared by a public servant, and there is a presumption of regularity, which the appellant has a burden to disprove in order to prove them false and fabricated, which was not done in this case. It highlighted that the exercise of discretionary power involved objective and subjective elements, and the subjective elements if derived from objective elements cannot be questioned on grounds of adequacy of subjective satisfaction by a judicial review.

xxx xxx xxx 22.

Some of the decisions of this Court may be of relevance in determining in what manner such subjective satisfaction of the Authority must be arrived at, in particular on Section 3(2) of the National Security Act. In Fazal Ghosi v. State of Uttar Pradesh, this Court observed that: (SCC p.505, para 3) "3....The District Magistrate, it is true, has stated that the detention of the detenus was effected because he was satisfied that it was necessary to prevent them from acting prejudicially to the maintenance of public order, but there is no reference to any material in support 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. Sukhpal Singh, this Court held: (SCC p.43, para 9) "9.

...the grounds supplied operate as an objective test for determining the question whether a nexus reasonably exists between grounds of detention and the detention order or whether some infirmities had crept in." (emphasis supplied) 25.

In State of Rajasthan v. Talib Khan, this Court observed that: (SCC p.398 para 8) "8. ...what is material and mandatory is the communication of the grounds of detention to the detenu together with documents in support of subjective satisfaction reached by the detaining authority." (emphasis supplied)"

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2 #% "15. In view of above, since the accused Dilbag Singh willfully adopted an attitude of non&cooperation either by evading the query or by giving misleading, part and evasive replies. By such action of willful noncooperation, the accused made a deliberate effort to hamper the investigation by not disclosing the facts and information which is in his exclusive knowledge pertaining to proceeds of crime received and generated from illegal mining activities, thereby, leaving no other option but to invoke the

provision of Section 19 of PMLA, 2002 for taking investigation to a logical conclusion and to unearth proceeds of crime.

16.

Accordingly, accused Dilbag Singh was arrested on 08.01.2024 at 12.15pm from his residence House No. 410, Friends Colony, Yamuna Nagar, Haryana 135001 in accordance with the procedure established under section 19 PMLA.

xxx xxx xxx

18. That, this Directorate requires custodial interrogation of accused Dilbag Singh in order to discover and identify further proceeds of crime and to enquire upon certain crucial aspects of the investigation related to illegal mining and transfer of funds as he was found to be "prima facie" guilty for commission of offence of moneyBlaundering, on the basis of investigation carried out and evidences collected so far as well as material in possession of this Directorate." C B# +

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"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 listed before the Hon'ble Division Bench or Single Bench?

2) Whether in case the matter is to be listed before the Single Bench then as to whether the same is to be listed before the learned Single Judge hearing all matters under the Prevention of Money Laundering Act or before this Court which has been assigned roster dealing with all the criminal matters (SB) by or against sitting/former MP/MLA's?

Adjourned to 18.01.2024.

To be listed before appropriate Bench after considering the abovesaid aspects.

(VIKAS BAHL) 15.01.2024 JUDGE"

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"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 legal maxim "sublato fundamento cadit opus" meaning thereby that foundation being removed, structure/work falls, comes into play and applies on all scores in the present case.

108. In Badrinath v. State of Tamil Nadu & Ors, AIR 2000 SC 3243; and State of Kerala v. Puthenkavu N.S.S. Karayogam & Anr., (2001) 10 SCC 191, this Court observed that once the basis of a proceeding is gone, all consequential acts, actions, orders would fall to the ground automatically and this principle is applicable to judicial, quasi&judicial and administrative proceedings equally.

109.

Similarly in Mangal Prasad Tamoli (dead) by Lrs. v. Narvadeshwar Mishra (dead) by Lrs. & Ors., (2005) 3 SCC 422, 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.

110.

In C. Albert Morris v. K. Chandrasekaran & Ors., (2006) 1 SCC 228, this Court held that a right in law exists only and only when it has a lawful origin.

111.

Thus, in view of the above, we are of the considered opinion that the orders impugned being a nullity, cannot be sustained. As a consequence, subsequent proceedings/orders/FIR/ investigation stand automatically vitiated and are liable to be declared non est. xxx xxx xxx 116.

In view of the above, the appeals succeed and are accordingly allowed. The impugned orders challenged herein are declared to be nullity and as a consequence, the FIR registered by the CBI is also quashed."

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GRitesh Tewari and another Vs State of U.P. and others"

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"32. It is settled legal proposition that if an order is bad in its inception, it does not get sanctified at a later stage. A subsequent action/development cannot validate an action which was not lawful at its inception, for the reason that the illegality strikes at the root of the order. It would be beyond the competence of any authority to validate such an order. It would be ironical to permit a person to rely upon a law, in violation of which he has

obtained the benefits.

33.

In C. Albert Morris v. K. Chandrasekaran this Court held that a right in law exists only and only when it has a lawful origin.

34.

In Mangal Prasad Tamoli 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." <

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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.

c) Violation of provisions of Section 19(2) of the 2002 Act. d) Non&compliance of Section 19(1) of the 2002 Act." << $&#.

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