Why Bombay High Court Refused To Release Nawab Malik On Interim Bail?

The court passed the order on Malik's habeas corpus petition seeking interim reliefs of "immediate release" in a money laundering case over his "involvement in terror funding" based on a 1999- 2005 land deal concerning Dawood Ibrahim's sister.

The Nationalist Congress Party (NCP) leader had challenged the PMLA proceedings against him, including the Special court's orders remanding him in custody. He sought to quash the ECIR against him and also declaration that his arrest is "illegal" The Enforcement Directorate had arrested the NCP leader on February 23.

With a rider that it has "not looked into the papers of investigation" as requested by the counsels, the court observed that "certain debatable issues are required to be heard at length."

The bench of Justices PB Varale and SM Modak however said in view of several Supreme Court pronouncements, Malik couldn't be released as he failed to meet the twin conditions, of the remand order being without jurisdiction, or patently illegal and without application of mind.

Moreover, all the requirements of arrest under section 19 of PMLA were prima facie complied and the special court's order cannot be termed as an order passed without application of mind, the bench observed. Therefore, Malik's applications were being rejected.

Retrospective Application of PMLA

The crux of the Mawab Malik's counsel was on the retrospective applicability of PMLA. Senior Advocate Amit Desai for Malik had submitted ED had used the amended provision of section 3 of PMLA from 2013 and an explanation is inserted in the year 2019, for the transaction of the year 2003 and 2005. This would amount to retrospective operation.

"When we have perused the unamended provisions of Section 3 we may find that "process or activity connected with proceeds of crime" is one of the ingredients. It's a wider term. Its constitutional validity is not challenged before us. So prima facie we feel that the said contention cannot be accepted at this stage."

"What we prima facie feel that projection/claiming a property as untainted property is the objectionable act forming part of an offence under Section 3 of the Act of 2002."

Relying on the judgement of A.K. Samsuddin, Hari Narayan Rai cited by the ASG, the court said that, "At this stage, we are not impressed by the arguments of learned Senior Advocate Desai that there is no act attributable to the Petitioner so as to attract the provisions of the Act of 2002."

The conditions include –

1.Malik admitted that he attended the ED office before an authorised officer in response to a summons issued by the ED on 23rd February, 2022.

2.Malik was served with an arrest order and explained grounds of arrest which are recorded by the Authorised Officers in writing.

"As we have observed earlier that the endorsement of the Malik admitting that he has been informed the grounds of arrest finds place on the office copy of ED."

3.Malik had legal assistance during remand. Learned Special Judge, on consideration of the grounds submitted in the remand application as well on hearing the Counsel for Petitioner, passed an order of remand.

"Taking into consideration all these aspects conjointly, we find merit in the submission of learned ASG that the requirement of Section 19 is duly followed."

The Case

The ED alleged that Malik connived with D-gang members i.e. Haseena Parker (late), her drive Salim Patel (late) and Sardar Khan (1993 bomb blast convict), and usurped one Munira Plumber's 3 acre ancestral property in Kurla for Rs 20 lakhs despite ready reckoner rate of Rs 3.54 crore between 2003-05.

According to the agency a power of attorney given by Plumber to Patel and Khan for removing encroachments on her land was misused to sell the property to a company owned by Malik's family.

Citation: 2022 LiveLaw (Bom) 82