Summary
The Supreme Court upheld bail granted by the High Court to an accused under the PMLA, holding that his arrest was vitiated because he was not produced before the nearest Magistrate within 24 hours of the Enforcement Directorate taking physical custody of him, and that where an arrest is illegal bail cannot be refused on the twin conditions of Section 45 of the PMLA.
Issues
- Whether the respondent's arrest was illegal for failure to produce him before a Magistrate within 24 hours, where the Directorate took physical custody of him at the airport on a Look Out Circular well before the time recorded in the arrest memo.
- Whether Section 57 of the Cr.P.C. applies to proceedings under the PMLA.
- Whether bail can be refused on the twin conditions of Section 45(1)(ii) of the PMLA when the arrest is found to be illegal.
Provisions considered
- Article 22(2), Constitution of IndiaThe respondent, detained on behalf of the Directorate under a Look Out Circular issued at its instance and taken into its physical custody at 11.00 hours on 5 March 2022, was not produced before the nearest Magistrate within 24 hours of that time; the arrest memo later prepared at Raipur did not reset the clock. The continued custody violated Article 22(2) and the arrest stood vitiated on completion of 24 hours. (¶¶ 4, 5, 6)
- Article 21, Constitution of IndiaBecause Article 22(2) was violated, the respondent's right to personal liberty under Article 21 was also infringed; courts hearing bail applications must uphold these rights. (¶¶ 6, 8)
- Section 57, Code of Criminal Procedure, 1973Section 57 embodies the requirement of Article 22(2) that an arrested person not be detained beyond 24 hours without a Magistrate's order; the Court held it applies to PMLA proceedings. (¶ 7)
- Section 65, Prevention of Money Laundering Act, 2002Since there is no inconsistency between the PMLA and Section 57 of the Cr.P.C., Section 65 of the PMLA makes Section 57 applicable to proceedings under the PMLA. (¶ 7)
- Section 45(1)(ii), Prevention of Money Laundering Act, 2002The twin conditions for bail do not stand in the way of release where the arrest itself is illegal or vitiated. (¶ 9)
Held
- Where a Look Out Circular is issued at the instance of the Enforcement Directorate and the Bureau of Immigration detains the person on its behalf, the 24-hour period for production before a Magistrate runs at least from when the Directorate takes physical custody, not from the later time entered in the arrest memo. Failure to produce the person within that period renders the arrest illegal under Article 22(2) and also violates Article 21. (¶ 6)
- Section 57 of the Cr.P.C., which incorporates the requirement of Article 22(2), is not inconsistent with the PMLA and applies to PMLA proceedings by virtue of Section 65 of the PMLA. (¶ 7)
- Once a court hearing a bail application finds that the accused's rights under Articles 21 and 22 were violated in or after the arrest, it is bound to release the accused on bail, since the arrest stands vitiated. (¶ 8)
- When an arrest is illegal or vitiated, bail cannot be denied on the ground that the twin conditions in Section 45(1)(ii) of the PMLA are not satisfied. (¶ 9)
Result
Appeal by the Directorate of Enforcement dismissed; the High Court's order granting bail upheld.