PMLA Accused Can't Be Arrested After Special Court Has Taken Cognizance Of Complaint : Supreme Court Expresses Prima Facie View

“Prima facie, it appears to us that once cognizance of a complaint filed under Section 44 is taken by the Special Court under the Prevention of Money Laundering Act, 2002 (for short "the PMLA Act"), the power to arrest vesting under Section 19 of the PMLA Act cannot be exercised,” said the Bench of Justices Abhay S Oka and Ujjal Bhuyan while posing the following two questions for consideration on the next date:

(I) If pursuant to the summons issued by the Special Court, the accused appears before the Special Court, whether he is required to apply for bail in terms of Section 437 CrPC?

(II) If the answer to the said issue is in affirmative, whether such a bail plea will be governed by the twin conditions imposed by Section 45 of the PMLA Act?

The petitioner, who approached the top Court against an order of the Punjab and Haryana High Court refusing anticipatory bail, was granted interim protection from arrest in January, 2024, subject to condition that he would regularly appear before the Trial Court on dates fixed in the complaint. This protection stands extended by the order of March 1 till the next of hearing.

His matter is listed alongwith pleas preferred by co-accused Shyam Lal, Raghbir Singh, Gurpreet Singh and Iqbal Singh.

Factual Background

In the year 2020, an FIR under Sections 409, 420, 465, 466, 467, 471, 120-B IPC and 7, 7(a) of Preventi­on of Corrup­tion Act, 1988 was registered by the Vigilance Bureau, Punjab against 11 persons, based on an allegation that shares of Shamlat (panchayat) land in Seonk village, Mohali had been misallocated pursuant to a conspiracy.

The primary accused in the Bureau's case were revenue officials viz. Varinder Pal Singh Dhoot (Naib Tehsildar), Iqbal Singh (Patwari), Raghbir Singh (Kanungo) & Gurnam Singh (Lambardar), who were stated to have abused their official positions to misallocate over 99 acres of land, in connivance with property dealers (including Shyam Lal) and beneficiaries.

Based on the FIR, a PMLA investigation was conducted, which revealed that shares of the Shamlat land were not only misallocated, but also sold for illicit gains. As per the prosecution complaint, while preparing Intkal (mutation document), the accused allocated shares of Shamlat land in the name of some ineligible villagers, from whom private property dealers obtained Power of Attorneys and sold the land to outside purchasers.

On July 17, 2023, the Special Judge took cognizance of the complaint and issued summons to the accused. When the petitioner-Tarsem Lal, who was also accused of obtaining Power of Attorney and selling Shamlat land, approached the High Court for anticipatory bail, the same was denied.

The High Court was of the view that the petitioner did not satisfy the second condition under Section 45 PMLA, as per which before grant of bail, a Court must be sa­tisfied that there are reasonable grounds for believing that the applicant is not guilty of such an offence and is not likely to commit any offence while on bail.

According to the High Court, there was enough evidence of the petitioner taking benefit (of Rs.39.75 lacs) by selling more land than the actual land in favor of a person from whom he had taken Power of Attorney. Moreover, “he was con­tinuously in touch with the main accused Varinder Pal Singh Dhoot”.

Aggrieved by the High Court order, the petitioner approached the Supreme Court.

Counsels for petitioner(s): Advocates Harshit Sethi, Mansi Tripathi, Divya Jain, Rhail Mahajan, Shubham Seth, Anuj Panwar, Kamal Verma and Lovekesh Aggarwal; AoRs Nikhil Jain and Nikilesh Ramachandran

Counsels for respondent(s): ASG SV Raju, AoR Mukesh Kumar Maroria; Advocates Zoheb Hussain, Annam Venkatesh and Arkaj Kumar

Case Title: Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Office, Special Leave to Appeal (Crl.) No(s). 121/2024 (and connected matters)

Citation : 2024 LiveLaw (SC) 191

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