PMLA| ED Cannot Arrest On Grave Suspicion Alone; There Must Be Written Reasons To Believe That Accused Is Guilty : Supreme Court
While granting interim bail to Delhi Chief Minister Arvind Kejriwal on Friday (July 12), the Supreme Court observed that arrest under Section 19 of the Prevention of Money Laundering Act cannot be made simply for the purposes of investigation. Rather, the power can be exercised only when the concerned officer is able to form an opinion, based on material in possession, and upon recording...
While granting interim bail to Delhi Chief Minister Arvind Kejriwal on Friday (July 12), the Supreme Court observed that arrest under Section 19 of the Prevention of Money Laundering Act cannot be made simply for the purposes of investigation. Rather, the power can be exercised only when the concerned officer is able to form an opinion, based on material in possession, and upon recording reasons in writing, that the arrestee is guilty.
"Power to arrest under Section 19(1) is not for the purpose of investigation. Arrest can and should wait, and the power in terms of Section 19(1) of the PML Act can be exercised only when the material with the designated officer enables them to form an opinion, by recording reasons in writing that the arrestee is guilty", the bench of Justices Sanjiv Khanna and Dipankar Datta said.
It was further held that providing "reasons to believe" to the arrestee is a legal necessity:
"Providing the written “grounds of arrest”, though a must, does not in itself satisfy the compliance requirement. The authorized officer's genuine belief and reasoning based on the evidence that establishes the arrestee's guilt is also the legal necessity. As the “reasons to believe” are accorded by the authorised officer, the onus to establish satisfaction of the said condition will be on the DoE and not on the arrestee."
Opining that the existence and validity of “reasons to believe” goes to the root of the power to arrest, the court also said,
"The subjective opinion of the arresting officer must be founded and based upon fair and objective consideration of the material, as available with them on the date of arrest. On the reading of the “reasons to believe” the court must form the 'secondary opinion' on the validity of the exercise undertaken for compliance of Section 19(1) of the PML Act when the arrest was made. The “reasons to believe” that the person is guilty of an offence under the PML Act should be founded on the material in the form of documents and oral statements."
'Reason to believe' not the same as 'grave suspicion'
In the 64-page judgment, the phrase "reason to believe" in Section 19 was analyzed in detail and it was noted that it is not the same as "grave suspicion".
Section 19 says that the ED officers can arrest only if they have reasons to believe, which are recorded in writing, that the accused is guilty of an offence under PMLA.
"Clearly, “reason to believe” has to be distinguished and is not the same as grave suspicion. It refers to the reasons for the formation of the belief which must have a rational connection with or an element bearing on the formation of belief. The reason should not be extraneous or irrelevant for the purpose of the provision."
After citing judicial precedents such as Pankaj Bansal v. Union of India and Prabir Purkayastha v. State, the court declared that "reasons to believe” should be furnished to the arrestee to enable him to exercise his right to challenge the validity of arrest.
"it would be incongruous, if not wrong, to hold that the accused can be denied and not furnished a copy of the “reasons to believe”. In reality, this would effectively prevent the accused from challenging their arrest, questioning the “reasons to believe”. We are concerned with violation of personal liberty, and the exercise of the power to arrest in accordance with law. Scrutiny of the action to arrest, whether in accordance with law, is amenable to judicial review. It follows that the “reasons to believe” should be furnished to the arrestee to enable him to exercise his right to challenge the validity of arrest."
Be that as it may, it was acknowledged that there may be some cases where it may not be feasible to disclose all material, when the investigation is still in process. In such cases, it was stated that ED may claim redaction and exclusion of specific details, after furnishing proper justification.
"Where the non-disclosure of the “reasons to believe” with redaction is justified and claimed, the court must be informed. The file, including the documents, must be produced before the court. Thereupon, the court should examine the request and if they find justification, a portion of the “reasons to believe” and the document may be withheld. This requires consideration and decision by the court. DoE is not the sole judge."
Pertinently, it was ED's case that "grave suspicion" is sufficient to frame charge and put an accused to trial. However, the court disagreed and stated,
"The language of Section 19(1) is clear, and should not be disregarded to defeat the legislative intent – to provide stringent safeguards against pre-trial arrest during pending investigations. Framing of the charge and putting the accused on trial cannot be equated with the power to arrest. A person may face the charge and trial even when he is on bail."
Other detailed reports on the judgment can be read here.
Case Title: Arvind Kejriwal v. Directorate of Enforcement, SLP(Crl) 5154/2024
Citation : 2024 LiveLaw (SC) 463