'ED Oblivious To Ground Realities': Punjab & Haryana HC Rejects Agency's Plea Against 4 Days Release Of Accused For Preparing His Defence

The Punjab and Haryana High Court has dismissed the Enforcement Directorate's (ED) plea challenging the four day release of an accused arrested under Prevention of Money Laundering Act, granted by special court to enable him to procure documents in his defence.

The Court rejected the argument raised by ED that if the petitioner is taken out of jail and permission is given to him to meet other persons outside the jail premises, it will result in a grave miscarriage of justice, as it may give him a chance to deal with the proceeds of crime and crucial evidence.

Justice Anoop Chitkara observed that the objection raised by ED "is far from the practicalities and the ground realities because family members and close friends are permitted to meet a prisoner even in jail. Confinement in the jail is not an isolation from society, but it is a restriction imposed on an accused to stay within four walls of a complex where people can come to meet a prisoner, and the inmates cannot come out to meet them. If somebody indulges in this tactic, they will get an opportunity during such interactions and even when the inmate comes to attend the trial."

Adding that the ground raised by the ED is "not based on the ground realities, and it appears that the Enforcement Directorate is oblivious to the ground realities," the Court said, "People and friends occasionally meet the prisoner at that stage, and such meetings cannot be practically stopped."

These observations came in response to the plea filed by ED under Section 482 CrPC challenging Special Court's order to release an accused for four days to enable him to procure documents to file a reply to the show cause notice issued by the Adjudicating Authority under Section 8(1) of PMLA 2002.

ED had arrested the accused and filed the complaint before the Special Court. After that, on receipt of a notice under Section 8(1) of the PMLA, the accused applied for interim bail before the Special Judge. It was stated that the accused is required to collect documents to file a reply to the show cause notice regarding the retention of cash, jewellery, digital devices, FDRs, etc., which had already been taken in possession by the ED.

The accused contended that in order to prepare his defence, it is important to visit offices such as banks and the income tax department personally, as well as to meet with people including his Chartered Accountant.

The Special Court did not grant interim bail but it allowed the accused to be sent out for four days to collect various documents in police custody. Specific directions were made that accused should prepare a schedule with dates of his visit to different offices and meetings with different persons, and for such schedule to be handed over to the Superintendent, Central Prison, Ambala, who was further directed to allow him to visit for the said schedule in police custody.

Aggrieved, the central probe agency moved High Court.

After examining the submissions, the Court dealt in detail with the objections raised by the ED.

Twin Conditions Under Sec. 45 PMLA Are Not Required To Be Complied When Release In Police Custody Is Ordered

The Court rejected the argument that the Special Judge overlooked the twin conditions of Section 45 of PMLA 2002.

The bench made it clear that it is sufficient to state that "the condition would have applied only when the Court had released the petitioner on bail, whereas the Court never released him on interim bail but made arrangements to take him out of prison in police custody to file a proper response to the notice issued under Section 8(1) of PMLA 2002."

The Court elucidated that the release from prison in police custody is neither bail nor interim bail. While out of prison in police custody, the inmate gets out of the prison's four walls but is under continued detention.

"Meanwhile, while on bail or interim bail, the accused is not detained but only has an undertaking through bond to appear before the Court or surrender to the prison. The primary concerns for a Judge while ordering an inmate's release in police custody are the accused being forcibly released by their accomplices, the accused being a flight risk, or the existence of a risk to the accused's life," it added.

Thus, the twin conditions of Section 45 of the Prevention of Money Laundering Act, 2002 neither attract nor are required to be complied with while passing an order for release in police custody. the Court opined.

Release Under Police Custody Cannot Be With Intent To Spy On Accused

The Court further refused to accept the contention that the Sessions Court did not consider the fact that when the accused was in custody, he dissipated the proceeds of crime to the extent of Rs.22 lacs with the help of his family members, and as such, there was a possibility of his again transferring the money even in police custody.

Justice Chitkara illustrated that hypothetically, if under some pretext the accused had operated computers during such a release in police custody, it would have been almost impossible for the police guards to find out about transactions he would be doing on his computer." Further, it is again impossible to find out about the language of communication so that they would be able to know all the communication made by the accused in different languages," it added.

Thus, release under police custody cannot be with an intent to spy on them or to espionage. Reading the impugned order makes it clear that neither was it done with such a purpose nor an intent, added the Court.

It Would Be Challenging For Accused Under Continuous Police Custody To Threaten People

The Court rendered the contention that since the petitioner not only committed a scheduled offense but also threatened innocent people, therefore if he is released from jail, he would again threaten innocent people, "devoid of any merit."

"Petitioner was to be in continuous police custody and when the police guards are present it would be challenging for the petitioner to threaten the people. Further, the petitioner's release was subject to a schedule only for a limited period, as such this objection is also not sustainable," said the Court.

Unfair To Say That In Garb Of Collecting Documents Accused Might Tamper With Evidence

The bench said that in the garb of collecting financial documents, the objection that the petitioner might tamper with the evidence and dispose of the Proceeds of crime, which would hamper the investigation, is also unfair.

The Court said that the trial court was also aware of such a possibility but had protected the accused's right to defend himself in other notice, as well considered the possibilities of risk that would indeed accompany the granting of said permission. Thus, it does not find any fault in the order to that extent.

 The judge concluded that the Special Court was fully justified in affording an opportunity for the accused to respond to the notice under Section 8(1) of PMLA 2002.

"A simple reading of the order makes it clear that the Special Court was concerned about affording an opportunity to the respondent to defend himself appropriately to the notice under Section 8(1) of PMLA pursuant to an application filed under Section 17(4) of PMLA 2002, filed by the Enforcement Directorate, and then instead of sending him out in police custody, the Court thought it appropriate and safe to send him in judicial custody him with the police guards," it highlighted.

In the light of the above, the Court dismissed ED's petition challenging the release.

Arvind Moudgil, and Mr. Lokesh Narang, Sr. Panel Counsel, Govt. of India with Shahil Rangra, Advocate, Vivek Singh, L.C., E.D. and  Bhawna Gandhi, L.C., E.D. for E.D.

Abhishek Singh Rana, Advocate and Rohit Kumar, Advocate for the respondent.

Citation: 2024 LiveLaw (PH) 90