InW.P. (CRL) 2408/2023 -DEL HC- Delhi High Court rejects Supertech promoter's plea for release in money laundering case
Justice Dinesh Kumar Sharma [22-09-2023]

Read Order:Ram Kishor Arora V. Director, Directorate of Enforcement &Anr

Chahat Varma

New Delhi, September 26, 2023: In a significant development, the Delhi High Court has rejected Supertech promoter Ram Kishor Arora's plea for immediate release in a money laundering case. The Court affirmed that his arrest by theEnforcement Directorate (ED)under the Prevention of Money Laundering Act (PMLA) was legal and justified.

In the matter at hand, the present petition was filed, seeking a writ, order, or directive to declare petitioner’s arrest as illegal and a violation of his fundamental rights guaranteed under Articles 14, 20, and 21 of the Constitution. The petitioner contended that the ED violated his fundamental rights by arresting him without informing him of the grounds for arrest and by denying him the right to consult and be defended by a legal practitioner of his choice. The petitioner argued that Section 19 of the PMLA was not followed in this case and sought his immediate release.

On the other hand, the ED argued that the statute mandates the grounds of arrest to be conveyed to the arrestee as soon as possible, and it is not a requirement for a copy of these grounds to be provided to the arrestee at the time of the arrest itself.

The single-judge bench of Justice Dinesh Kumar Sharma referred to the legal interpretation provided in the case of V. Senthil Balaji v. The State Represented by Deputy Director and Ors [LQ/SC/2023/803], particularly concerning Section 19 of the PMLA. It was established in this case that an authorized officer had to carefully assess and evaluate the material evidence in their possession. Through this assessment, they were required to form a reasonable belief that a person had committed an offense under the PMLA. Once this belief was formed, the authorized officer was empowered to carry out their mandatory duty, which included recording the reasons for the arrest. Furthermore, it was emphasized that this process had to be followed by informing the arrestee about the grounds for their arrest. The Supreme Court, in its judgment, made it clear that any failure to comply with the provisions of Section 19(1) of the PMLA would vitiate the arrest itself. The Apex Court explicitly stated that all the requisite mandates of Section 19(1) had to be followed in letter and spirit.

The bench also noted that in the PMLA, the legislature had chosen to use the term ‘informed’ without specifying any particular method for such notification in the statute or rules. In the absence of a prescribed mode of informing in the statute, the court determined that it should rely on common law principles. Consequently, the bench concluded that in the case at hand, the grounds for arrest were properly provided to the petitioner, and he acknowledged them in writing by signing them.

The bench also took note of the fact that there was no infringement of the petitioner's fundamental rights. There was no evidence to suggest that the petitioner had been denied the right to consult and be defended by a legal practitioner. Additionally, based on the discussion, there was no indication in the records that the ‘reason to believe’, as mandated under Section 19(1) of the PMLA, had not been properly recorded in writing.

Therefore, the courtconcluded that it cannot be held that petitioner was arrested illegally.