Section 41A CrPC Not Applicable To Arrest Made Under PMLA: Supreme Court

The Supreme Court on Monday while dismissing  Tamil Nadu Minister Senthil Balaji's plea challenging custody by Enforcement Directorate in the money laundering case, held that Section 41A of the Code of Criminal Procedure, 1973 (Notice of appearance before police officer) would not apply to an arrest made under the Prevention Of Money Laundering Act, 2002.

"Section 41A of the CrPC, 1973 has got no application to an arrest made under the PMLA 2002", the Court held.

Under Section 41A of CrPC, a person must be served with notice by the Police prior to his arrest for offences punishable with imprisonment for less than 7 years. The Section specifies the procedure to be followed before a person can be deprived of his liberty. It was introduced as a procedural safeguard against illegal arrest, with an aim to protect the interest of the accused. Notably, the maximum punishment prescribed under the PMLA is 7 years.

A division bench of Justice A S Bopanna and Justice M M Sundresh observed that when the PMLA itself contains a comprehensive procedure for summons, searches, and seizures, applying Section 41A of the CrPC which requires serving of notice by Police prior to arrest would defeat the purpose of the legislation:

“In the absence of any mandate, one cannot force the Authorized Officer to ensure due compliance of Section 41A of the CrPC, 1973 especially when a clear, different and distinct methodology is available under the PMLA, 2002. Following Section 41A of the CrPC, 1973 for an arrest under the PMLA, 2002 would only defeat and destroy the very inquiry/investigation under the PMLA, 2002. Till summons are issued to a person, he is not expected to be in the know-how. Any prior intimation, other than what is mandated under the PMLA, 1973 might seriously impair the ongoing investigation.” the Top Court said.

The Apex Court referred to the decision in Vijay Madanlal Choudhary v. Union of India, to observe that an Authorized Officer under the PMLA who is to follow the mandate of Section 19 of the Act, will not be duty bound to follow the procedure laid down under Section 41A of the CrPC. This is because, the PMLA already contains sufficient safeguards against arrest, according to the Apex Court.

“This provision cannot be termed as a supplement to Section 19 of the PMLA, 2002. The PMLA, 2002 being a sui generis legislation, has its own mechanism in dealing with arrest in the light of its objectives. The concern of the PMLA, 2002 is to prevent money laundering, make adequate recovery and punish the offender. That is the reason why a comprehensive procedure for summons, searches, and seizures etc., has been clearly stipulated under Chapter V of the PMLA, 2002. An arrest shall only be made after due compliance of the relevant provisions including Section 19 of the PMLA, 2002. Therefore, there is absolutely no need to follow and adopt Section 41A of the CrPC, 1973 especially in the teeth of Section 65 of the PMLA, 2002. “ The Apex Court said. 

The Apex Court also observed that Section 41A of the CrPC was introduced to safeguard the liberty of a person according to the interpretation of the said provision in Arnesh Kumar v. State of Bihar, (2014) 8 SCC 273 and other decisions. The Supreme Court also referred to the 177th Report of the Law Commission which stated that the police should focus more on serious offences and economic offences and rather than minor offences. The need for introducing Section 41A came from trying to end the practice of arresting persons for minor offences and keeping them in jail for long periods of time, according to the said report. The Apex Court thus concluded that Section 41A was meant to be applied to minor offences under the Indian Penal Code, 1860 and not economic offences.

Reports on other aspects of the judgment can be read here.

Case Title: V. SENTHIL BALAJI V. THE STATE REPRESENTED BY DEPUTY DIRECTOR AND ORS., CRIMINAL APPEAL NOS. 2284-2285 of 2023

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