‘ED Has No Vested Right to Seek Police Custody’: Mukul Rohatgi Argues in Senthil Balaji’s Case

“After the expiry of the initial 15 days, further remand during the period of investigation can only be in judicial custody. While in the first 15 days, custody may either be police or judicial, but after this period elapses, only one compartment will be available, which is that of judicial custody. But, even in the first 15-day period, there is no vested right to seek police custody. This, too, requires the magistrate’s permission.”

A bench of Justices AS Bopanna and MM Sundresh was hearing a batch of pleas over the legality of DMK MP and Tamil Nadu minister V Senthil Balaji’s custody by the Enforcement Directorate in connection with a cash-for-jobs scam in the state. Balaji and his wife have both filed separate petitions challenging a verdict of the Madras High Court holding that the central agency was entitled to seek police remand and take him into custody.

“The law frowns upon police custody,” Rohatgi argued before the bench, insisting that judicial custody was the rule, while police custody was an exception. In support of this contention, he relied on the 1992 Anupam Kulkarni ruling, in which the top court had said that an accused could not be detained in police custody after the expiry of 15 days from their initial arrest. He also invoked the rights guaranteed under Articles 21 (Protection of life and personal liberty) and 22 (Protection against arrest and detention in certain cases), saying, “The statutory provisions owe their worth to Articles 21 and 22.”

Asserting that the Enforcement Directorate seeking police remand of Senthil Balaji was illegal, the senior counsel said:

“The law frowns upon police custody. There is an express provision allowing police remand to be sought only in the first 15 days. But that too requires the authorisation of a magistrate…Therefore, the scheme is that judicial custody is a rule, and police custody is an exception. Police custody is subject to a magistrate applying their mind. That is why, judges in our country do not grant 15 days’ police remand at a stretch, but allows the accused to be taken into custody by the police for a couple of days at a time and then re-examines the request. There are no exceptions to this, even on the ground of seriousness of offence. That's what was held in Anupam Kulkarni, which is also identical in terms of facts.”

Rohatgi also reminded the bench of the limitations of the powers of the court in interpreting statutes, while arguing that the time Balaji spent in a hospital during the first 15 days since his arrest could not be arrested. The senior counsel said:

“Look at various provisions of the Arbitration Act, Income Tax Act, and even the Prevention of Money Laundering Act. In so many acts, there are express provisions for the exclusion of time. But, there is no provision for exclusion when it comes to seeking police remand here. The exceptions in the form of travelling time, exigencies of illness, and litigation time are already available but there is no exclusion. The court cannot legislate and grant an exclusion when the law does not grant the exclusion. It is for the Parliament to do. For our purposes, therefore, either such a provision exists, or does not exist. It cannot be read into the statute. There is no recourse. It is unfortunate. But the time is gone.”

In this connection, Rohatgi also questioned the correctness of the Supreme Court’s decision in the April 2023 Vikas Mishra judgement, in which a bench headed by former judge MR Shah called for reconsideration of the Anupam Kulkarni bar on police custody beyond 15 days from the date of arrest. No decision, Rohatgi told the bench, can be arrived at contrary to a decision of a coordinate bench. “Justice Shah's decision suffers from this infirmity,” he added. In view of the conflicting legal positions adopted by previous benches, the senior counsel suggested that the bench refer this present case to a larger bench, saying:

“It would be better to refer this to a larger bench. This court should follow what the law is in these kinds of conflicts and refer to a larger bench. That would ensure clarity. Because this question will arise again – if not now, in another few years.”

In response to a query by the bench regarding the interim arrangement in the event the matter is referred to a larger bench, Rohatgi promptly said, “There cannot be an interim order in their favour. Because the law today says that there must be no police custody after 15 days.” He added:

“It is not as if some golden right is lost forever. The Enforcement Directorate can still interrogate while the accused is in judicial custody. Just that, they will have to make an application. As of today, Senthil Balaji is recovering from a bypass. He is in a prison hospital. For some time every day, he can still be interrogated. We are willing to make this concession.”

Senior Advocate Kapil Sibal earlier argued that the power to make an arrest under the Prevention of Money Laundering Act could not be conflated with the power to seek police remand, and the Enforcement Directorate’s custody of the minister flew in the face of the 2022 judgement of the Supreme Court in Vijay Madanlal. In other words, it was illegal inasmuch as ED officers were not ‘police officers’ under the Prevention of Money Laundering Act, as per the Vijay Madanlal Choudhary decision. Among other things, he also explained that there was a bar on the officers of the Enforcement Directorate from seeking police remand since ‘investigation’ under the governing statute was interpreted to be an ‘inquiry’ in this judgement, in addition to officers not being held to be police officers. Section 167 of the Code cannot apply ‘wholesale’ to the Prevention of Money Laundering Act, the senior counsel insisted. His contention was that only a ‘truncated’ form of the section would apply, starting from the time that an accused is produced before a magistrate and the magistrate takes cognisance.

Background

In June, DMK leader V Senthil Balaji and cabinet minister in the MK Stalin-led Tamil Nadu government was arrested by the Enforcement Directorate for his alleged role in a cash-for-job scam in the state, which is believed to have taken place between 2011-2016 during his tenure as the transportation minister under the then-AIADMK regime. This development came after the Supreme Court in May set aside a direction of the Madras High Court staying the proceedings in the money laundering case lodged by the Enforcement Directorate, effectively removing all fetters to the ED investigation. The top court also gave a nod to the agency to include the offences under the Prevention of Corruption Act in the investigation.

In the same month, the Madras High Court denied interim bail to Balaji but allowed his family’s request to transfer him to a private hospital. Balaji was arrested by the central agency after an 18-hour-long extensive search and interrogation conducted at his official residence, his official chamber at the state secretariat and his brother’s residence. After the minister’s arrest, his wife filed a habeas corpus petition before the high court praying, inter alia, that the legislator be allowed to be shifted to a private hospital to undergo medical treatment.

The Enforcement Directorate challenged the high court agreeing to take the petition on board and passing an interim order before the Supreme Court, arguing that it was not maintainable. But a vacation bench of the top court adjourned the hearing in the central agency’s plea, choosing to wait for the high court to deliver its verdict first.

However, earlier in July, the high court delivered a split verdict. On the one hand, Justice Nisha Banu observed that the habeas corpus petition filed by Balaji’s family was maintainable since, inter alia, the ED officers did not have the powers of a station house officer under the Prevention of Money Laundering Act, and as such, could not have moved for the custody of the minister. On the other hand, Justice Bharatha Chakravarthy held that Balaji's arrest did not amount to illegal detention, observing not only that the ED officers were competent to seek custody, but also that Balaji’s family had not made out a case of illegal custody or a mechanical remand order, which would have warranted the interference of the high court by way of a habeas corpus petition.

Hours after this verdict, the State sought to convince the top court to hear the appeals and finally decide the matter. However, a bench headed by Justice Surya Kant refused to heed the request of the central agency to decide the questions of law involved in the case and opted to continue waiting for the outcome of the litigation pending before the high court, as it had done earlier. However, the Supreme Court requested the Madras High Court Chief Justice to place the habeas corpus petition filed by Senthil Balaji's wife Megala before a larger bench at the earliest for an expeditious decision.

Following this split verdict, Justice CV Karthikeyan, who was assigned by the chief justice to resolve the split decision in this habeas corpus petition, has settled the conflicting views by holding that the central agency was entitled to seek the custody of the minister in a money laundering case over an alleged cash-for-jobs scam in the state. Endorsing the view of Justice Chakravarthy, Justice Karthikeyan held that while officers of the Enforcement Directorate were not police officers, they were competent to take an accused into custody for further investigation and this right of the agency to take Senthil Balaji could not be denied.

After this, the Tamil Nadu minister moved the Supreme Court in an appeal against the high court’s verdict, inter alia, challenging the Enforcement Directorate’s power to seek custody of an accused in the absence of a specific provision under the Prevention of Money Laundering Act, 2002. His wife, Megala, also filed an appeal against the Madras High Court’s decision.

Last week, the Supreme Court issued notice in the batch of pleas over Senthil Balaji’s arrest. In view of this, yesterday, the high court division bench of Justices Banu and Chakravarthy decided to close the proceedings in the habeas corpus petition pending before it, without recording any observation regarding the starting date of the minister’s custody.

Case Details

1. Megala v. The State | Special Leave Petition (Criminal) No. 8652-8653 of 2023
2. V Senthil Balaji v. The State | Diary No. 28176 of 2023
3. Directorate of Enforcement & Anr. v. Megala | Special Leave Petition (Criminal) No. 8750 of 2023