Can Legality Of Arrest Be Examined After Trial Court Has Taken Cognizance & Rejected Bail? Supreme Court Asks Hemant Soren

While hearing former Jharkhand Chief Minister Hemant Soren's petition challenging his arrest by the Enforcement Directorate (ED), the Supreme Court on Tuesday (May 21) asked if the validity of arrest can be examined after the trial court has taken cognizance of the ED complaint and rejected the regular bail application of Soren.

After hearing arguments for about one and half hours, the vacation bench comprising Justices Dipankar Datta and Satish Chandra Sharma listed the matter tomorrow for further arguments.

The primary argument raised on Soren's behalf today was that the alleged illegal possession of land is not a scheduled offence under the Prevention of Money Laundering Act (PMLA) and hence the ED officers could not have arrested him in the exercise of powers under Section 19 of the PMLA.

Arguments of Soren

At the outset, Senior Advocate Kapil Sibal, appearing for Soren, submitted that the subject land was 8.86 acres of tribal land which cannot be transferred under the Chotta Nagpur Tenancy Act. He asserted that Soren has nothing to do with the land.

Moving on, Sibal recapitulated that ED's allegation was that in 2009-10 Soren occupied the subject land forcibly. A complaint was lodged in April 2023, but between 2009-10 and April 2023, there was no complaint by anybody. Sibal claimed that the electricity connection in the land was in the name of a person, who is cultivating the land under a registered lease from another person.

He further contended that ED is not the investigating agency with respect to the settlement of the land as it is purely a civil matter. Insofar as ED's contention that had it not intervened, Soren's name would have added in the land register, Sibal asked, "How do they know that his name would be added?".

ED raises preliminary objections

Additional Solicitor General SV Raju, appearing for ED, submitted that Soren's case is different from Arvind Kejriwal's case on many grounds, including :

1. Soren was arrested in January, way ahead of the the declaration of elections,

2. The Special Court has taken cognizance of the complaint and issued process, which means that there is a judicial satisfaction regarding a prima facie case,

3. Soren's regular bail application under Section 45 PMLA was rejected by the Special Court, which he has not challenged.

The ASG said that to grant interim bail only on the ground of elections would open a "pandora's box" as several other jailed politicians will also try to take advantage of such an order. Soren was simultaneously pursuing bail while challenging the arrest, which is akin to "riding two horses at a time". The Supreme Court has deprecated the practice of parties resorting to parallel remedies simultaneously, he submitted.

Can the writ court interfere when the Special Court has taken cognizance and bail has been denied? Bench asks

On hearing submissions on behalf of Soren, the bench asked if the writ petition challenging arrest can be maintained when the special court has taken cognizance and when his regular bail application has been rejected.

In reply, Sibal said that the allegation of land grabbing is not a scheduled offence under PMLA. So far as Justice Datta's query on whether subsequent judicial orders would not give an imprimatur to the arrest, Sibal answered in the negative. He cited the recent judgment in Prabir Purkayastha v. Union of India which held that if the initial arrest is invalid, the subsequent remand orders will not validate it. However, Justice Datta said that there were certain factual dissimilarities in the cases.

"Here, cognizance has been taken which means that there is a prima facie case. Here your case is that you could not have been arrested under Section 19 as there are no materials to believe that you are guilty. When the Court has taken cognizance, that will impact that argument," Justice Datta said while stating that in the Prabir Purkayastha case, the arrest was invalidated on the basis that the grounds of arrest were not supplied.

"When a judicial order taking cognizance is there, which has not been challenged, whether a writ court can look into that?" Justice Datta asked. The judge also said that the bail application was filed without taking the leave of the the High Court which had reserved judgment on his petition challenging arrest.

Sibal asserted that no offence is made out under the PMLA as illegal possession of land is not a scheduled offence under the PMLA. Hence, ex-facie, there is no basis to invoke Section 19 PMLA (power of arrest). This has to be determined based on the materials and developments as existing on the date of arrest, January 31, 2024, he said.

"I am raising a Constitutional infirmity as it is related to freedom. Taking away of the liberty under Article 21 as per procedure established by law. Here the procedure established by law is Section 19. If 19 is violated, the writ court can interfere," Sibal argued.

The senior counsel further contended that it would be an "unfair proposition of law" to hold that a person cannot challenge his arrest as unconstitutional merely because he has applied for bail in the meantime. Citing Vijay Madanlal Choudhary, he advanced that unless there is a scheduled offence, there cannot be proceeds of crime.

Only such properties which are derived directly or indirectly out of criminal activities relating to the scheduled offence can be regarded as "proceeds of crime", he quoted from Vijay Madanlal Choudhary. Illegal possession of property or forcible possession of property is not a scheduled offence, he reiterated.

Sibal submitted that Soren was constrained to apply for bail as the High Court was delaying the pronouncement of the verdict on the challenge to arrest (arguments were completed on February 29 and the judgment was delivered on May 3).

At this point, Justice Datta asked if the logic in SFIO v. Rahul Modi (2019) that a remand order cannot be quashed in a habeas corpus petition won't apply in the instant case. Sibal pointed out that the Jharkhand High Court itself had distinguished Rahul Modi on the ground that the present petition was not a habeas corpus petition.

When the bench reiterated that it has to be satisfied that the Court can interfere with the arrest despite the subsequent judicial developments, Sibal sought time till tomorrow to address the aspect. Accordingly, the petition was listed tomorrow.

"There is a good case on merits. But we have to look at it from a different perspective. Tomorrow," Justice Datta said when Sibal asserted that the case is "ex-facie cooked up."

Recap

Soren filed the present petition challenging the Jharkhand High Court's judgment which dismissed his challenge to the ED arrest. He was arrested by ED in connection with the alleged land scam on January 31, and is accused of being the primary beneficiary of fraudulently acquired land.

The arrest followed Soren's resignation as the Chief Minister of Jharkhand and he has been in custody since then.

On the last date, ie May 17, a bench comprising Justices Sanjiv Khanna and Dipankar Datta had refused to pass an order on Soren's interim bail plea without affording ED an opportunity to reply. Seeking time to prepare and argue, ASG SV Raju had urged before the bench that Soren was arrested long back and his regular bail applications were dismissed. He also pointed out that four phases of elections were already over and claimed that Soren was directly involved with the subject land.

Background

Hemant Soren, former chief minister of Jharkhand, is being investigated for money laundering charges in connection with an illegal mining case, as well as an alleged land scam in Ranchi, the state's capital. The ED is investigating both cases and contends that approximately 8.5 acres of property in question constitutes proceeds of crime. It has charged Soren with unauthorized possession and usage.

ED alleges Soren's direct involvement in the acquisition, possession, and utilization of these proceeds, accusing him of colluding with others, including Bhanu Pratap Prasad, in concealing original records to portray the acquired property as untainted.

In September last year, the Jharkhand Mukti Morcha chairperson approached the Supreme Court challenging summonses by ED in connection with the money laundering case. However, the top court expressed disinclination to entertain the matter, pointing to the alternative remedy available under Article 226 of the Constitution. As such, Soren agreed to withdraw his plea.

Accordingly, Soren moved the Jharkhand High Court, which heard him on the issue of ED arrest and reserved verdict on February 28. From February 28 till May 3, the High Court did not pronounce its verdict. This led Soren to move the top Court against the delay occasioned, whilst also challenging ED's arrest.

Notice came to be issued on this petition on April 29; although, it was clarified that the High Court may pronounce its verdict in the meantime. On this date, Sibal informed the court that Soren was seeking the benefit of interim bail.

Four days later, on May 3, the High Court pronounced its decision, dismissing Soren's challenge to ED arrest. Immediately, Soren moved the present petition challenging the High Court decision.

On May 10, the first petition filed by Soren, citing delay in pronouncement of High Court's decision as well as challenging ED arrest was disposed of by the top Court as infructuous (as the High Court pronounced its decision). The bench was of the view that all issues, including the challenge to ED arrest, could be considered in the fresh petition against the High Court judgment, that is, the present petition.

On May 13, Sibal cited the interim bail order passed in Delhi CM Arvind Kejriwal's case to say that it covered Soren too. In response to a court query, he also clarified that Soren had nothing to do with the subject matter land.

When the bench expressed an inclination to post the matter on May 20, Sibal strenuously beseeched it to hear Soren's case before summer break, saying that he would definitely come out of jail, but at that stage, the main purpose was elections. At Sibal's insistence, the court issued notice and listed the matter for May 17, while clarifying that it may or may not be heard (given it was the last working day before summer break).

Case Title: Hemant Soren v. Directorate of Enforcement and Anr., SLP(Crl) No. 6611/2024