ICICI -Videocon Case: Delhi HC Seeks ED Response On Deepak Kochhar's Plea For Interim Bail

Mr. Deepak Kochhar was arrested by the ED on September 7, 2020 in the ICICI Bank-Videocon loan fraud case under Prevention of Money Laundering Act (PMLA) and was remanded to ED's custody till September 19, 2020 by a special PMLA court in Mumbai. Pursuant to the same, he was taken to Delhi for questioning in connection with the case. He then tested positive for COVID-19 and was thus admitted to AIIMS Delhi from where he was referred to NCI, Jhajjar. The ED had obtained an order of transferring Deepak Kochhar to judicial custody during his treatment period so as to not lose out on the time granted by the court to interrogate Kochhar in its custody. The Mumbai court on September 14, 2020 passed an order to that effect requiring Kochhar to be presented before it within 2 days after being tested negative and discharge from the hospital for further orders. A plea filed by him before the Delhi High Court seeking to be shifted to a private hospital at his own expense was declined to be entertained by Hon'ble Justice Bhambani on September 17, 2020 on the ground that, Kochhar was presently under the judicial custody of Special PMLA court in Mumbai and the Delhi High Court can't shift him from one place to another. Petition was dismissed as withdrawn as the petitioner sought to move the concerned Mumbai Court for seeking the order of transfer given that ED had no objection to such transfer of Deepak Kochhar to private Hospital. On September 19, 2020 the special PMLA court Mumbai allowed Deepak Kochhar to be shifted to a private hospital for treatment. Currently Mr. Kochhar is undergoing treatment in Apollo Hospital in Delhi.

The present Writ petition is filed before the Delhi High Court under Article 226 of the Constitution challenging the arrest of Deepak Kochhar by the ED and the subsequent custody and remand as illegal. Senior Advocate Mukul Rohatgi argued on three major grounds.

First, that the arrest undertaken without informing the person of the grounds on which it was being carried out is illegal. He sought to rely on the judgement of the Delhi High Court delivered in Rajbhushan Dixit v. Union of India (2018) for the same. He also relied on the Supreme Court judgement of Madhu Limaye for arguing that if the arrest itself was illegal the subsequent custody and remand would also become illegal.

Secondly, he argued that Chapter XII of Cr.P.C. is applicable to PMLA unless PMLA explicitly excludes the same by creating alternative mechanism. He argued that filing of an ECIR is not equivalent of FIR which he sought to argue was mandatory u/s 154 or permission of Magistrate u/s 155 of the Cr.P.C. as the case may be for initiating an investigation. He relied on the observation of Supreme Court in Ashok Munilal Jain v. ED whereby it had held that non-application of Cr.P.C. provisions to PMLA would have disastrous effect as it would unable exercising of powers of remand u/s 167 Cr.P.C. Replying to the query posed by the bench relating to registration of ECIR and it being an off-shoot of FIR he replied that it was a self-invented instrument with no legal genesis and is secret document in ED's office. He argued that ED was required to register FIR and can't proceed to arrest based on ECIR. The Senior Adv proceeded to quote a number of sections from Chapter XII of Cr.P.C. to argue that ED was selective in choosing which provisions of Cr.P.C. in its procedures relying on few while denying others and the same is not permissible. He concluded his submission by stating that to orally quote the grounds of arrest in PMLA cases running into 3-4 pages to the person is beyond acceptable.

The bench had raised a query that, since two decisions of the coordinate benches of Delhi HC namely Moin Akhtar Qureshi v. Union of India and Vakamulla Chandrashekhar v. Enforcement Directorate were contrary to each other and Rajbhushan Dixit sought to be relied upon by Sr. Adv. Rohatgi was referred to a larger bench with no decision on the same and there is no decision of the Supreme Court in this matter either, then what considerations should this bench be guided by in deciding the present writ petition.Rohatgi responded that court should lean in favour of liberty and in the present write petition he argued that Article 21 of the petitioner was being violated given the arrest and the procedures followed by ED were illegal.

Thirdly, he argued that the Delhi High Court did have jurisdiction to entertain the petition since part of the cause of action had arisen in Delhi. He argued that the ECIR was made in Delhi, arrest memo was also from Delhi and this court under article 226(2) of the Constitution can expand its traditional boundaries relying on Navinchandra Majithia. He insisted that this court had the power to quash the custody ordered by the special PMLA court Mumbai.

Adv. Amit Mahajan informed the court that as per the recent order dated October 3, 2020 passed by the special PMLA court Mumbai which was not brought on record, the petitioner is required to be presented before the court within 3 days after his discharge. He relied on the judgement of SFIU v. Rahul Modi to argue that Delhi HC had no jurisdiction the present matter. The jurisdiction as per section 44 of the PMLA is in Mumbai where the offence was committed and under section 47 of the PMLA any orders of the special PMLA court Mumbai could only be challenged before the Court having jurisdiction over such court passing the order. He argued that the view in Vakamulla Chandrashekhar v. Enforcement Directorate would prevail in the absence of any other authoritative pronouncement on the subject of application of Chapter XII of Cr.P.C. to PMLA and communicating grounds of arrest is concerned. He also argued that for relief of bail the petitioner must have approached the High Court u/s 439 of CR.P.C. and not Article 226 of the Constitution to which Ld. Sr. Adv. Rohatgi argued that the relief sought was quashing of the arrest the ensuing custody and remand as illegal and the bail was sought as an interim relief.

After the hearing, Justice Bhambani passed an order for filing of status report by the ED and posted the matter for next hearing on October 14, 2020.