Summary
An arrest under Section 19 PMLA is judicially reviewable for compliance with its strict safeguards, including written reasons based on a fair appraisal of incriminating and exculpatory material. The Court did not quash Kejriwal’s arrest on the disputed evidentiary inferences advanced. It referred questions about a separate requirement of need and necessity to arrest to a larger Bench and granted interim bail, leaving regular bail and the allegations’ merits open.
Issues
- What judicial scrutiny applies to arrest under Section 19 PMLA and whether reasons to believe must be supplied.
- Whether the arresting officer must consider exculpatory material and whether later-discovered material can sustain arrest.
- How review of arrest differs from determination of regular bail.
- Whether need and necessity to arrest is a separate requirement and what interim relief was appropriate pending reference.
Provisions considered
- Section 19, Prevention of Money Laundering Act, 2002The statutory preconditions were enforceable through judicial review. Written reasons must rest on relevant material, including exculpatory material, and be furnished subject to court-approved justified redaction. Separate necessity questions were referred. (¶¶ 8, 9, 19, 21, 28, 29, 36, 37, 39, 54, 55, 56, 60, 61, 84)
- Section 45, Prevention of Money Laundering Act, 2002Regular bail involves the court’s independent assessment under the statutory conditions, distinct from review of the officer’s decision to arrest, and may be sought at any stage. (¶¶ 43, 44, 45, 46, 66, 88)
- Articles 21 and 22(1), Constitution of IndiaPersonal liberty and meaningful communication of arrest grounds require compliance with statutory arrest safeguards; remand cannot cure an unlawful arrest. (¶¶ 9, 10, 11, 14, 15, 16, 27, 85)
Held
- Section 19 requires material in the authorised officer’s possession, written reasons to believe the person guilty of a PMLA offence, and communication of arrest grounds. These are substantive safeguards, subject to judicial scrutiny before and after a prosecution complaint; a remand order does not cure non-compliance. (¶¶ 8, 9, 13, 14, 15, 18, 19, 21)
- Reason to believe requires more than suspicion and must have a rational basis in material available when arrest occurs. The Enforcement Directorate bears the burden of establishing compliance; supplying written grounds alone does not establish that the requisite belief was genuinely and lawfully formed. (¶¶ 27, 28, 29, 33, 34, 35)
- The arrestee must be furnished the written reasons to believe so that arrest can effectively be challenged. Exceptional redaction or withholding of particulars requires justification by the Directorate and scrutiny of the file by the court; the Directorate is not the sole judge of non-disclosure. (¶¶ 24, 36, 37, 38)
- Review addresses legality of the decision-making process rather than a mini-trial or substitution of the court’s view on evidentiary sufficiency. Intervention remains available for unsupported or perverse findings, lack of rational nexus, errors of law, improper purpose, ignored relevant factors or reliance on irrelevant ones. (¶¶ 39, 58, 59, 60, 61, 62)
- The officer cannot selectively consider incriminating material while ignoring relevant exculpatory material without explanation. Material retrieved after arrest and absent from the recorded reasons cannot retrospectively establish legality of that arrest. (¶¶ 54, 55, 56, 57)
- On this record the asserted coercion and competing deductions from witness statements did not justify quashing the reasons to believe within judicial review. Such matters could be examined in regular bail, where the court must independently assess the parties’ admissible material and arguments under Section 45. No merits findings on guilt were made. (¶¶ 49, 53, 65, 66, 88)
- The Court referred whether need and necessity to arrest is an independent challenge under Section 19, whether it extends beyond formal parameters to individual circumstances, and the applicable judicial standards to a larger Bench. Those questions were not finally decided. (¶¶ 74, 84, 87)
- Pending reference, interim bail was granted on a Rs.50,000 bond with like surety, restrictions on visiting the Chief Minister’s office and Delhi Secretariat and on signing files except as specified, and prohibitions on commenting on his role, contacting witnesses or accessing case-related official files. The larger Bench could extend or recall bail. No direction to step down from office was issued. (¶¶ 85, 86)
Result
Questions concerning need and necessity to arrest referred through the Chief Justice for an appropriate larger Bench. Interim bail granted in this ECIR on specified conditions, subject to the larger Bench. Regular bail and the merits of the allegations left open.