INTRODUCTION
The Supreme Court granted interim bail to Delhi Chief Minister Arvind Kejriwal in the excise policy case on May 11 while remarking elections as “the barometer and lifeline of a parliamentary system and its setup”and recognised that depriving him from his right to campaign especially by the virtue of him being the leader of one of the national parties would be detrimental to the democratic system of the country. As Mr. Kejriwal challenged his arrest under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, this case has necessitated renewed emphasis on the adequacy of safeguards from arrest under the PMLA Act. This is pertinent in light of recent data which shows that out of the 121 questionings, raids, investigations and arrests procedures initiated by the Enforcement Directorate (ED) against political persons since 2014, 115 were targeting members belonging to the opposition, not to mention the paltry rate of conviction.
Hence, this essay first, analyses the necessary ingredients for arrest as envisaged in Section 19 of the PMLA Act. Second, it underlines the existing jurisprudence around its interpretation in light of the adequacy of procedural safeguards from arrest by discussing the stance of the Supreme Court in Vijay Madanlal Chaudhary v. Union of India and V. Senthil Balaji v. The State which has solidified the position of law in this aspect as of now. Third, it delves into the issue of adequacy of safeguards to arrest under the PMLA Act and its conflation with the provisions of Code of Criminal Procedure (Cr.P.C),1973 and the Indian Evidence Act (IEA), 1872.
Understanding Section 19 of the PMLA Act
Section 19 (1)enumerates the officers authorised to make an arrest and the parameters to be followed before such an arrest is made:
“If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.”
A plain reading of this section leads to the interpretation that in order to make an arrest, the officer concerned must have some ‘material in possession’ and on the basis of the existence of such material, he has a ‘reason to believe ’that any person has been ‘guilty’ of an offense punishable under PMLA which has to be ‘recorded in writing’ and the person so arrested after fulfilling these conditions must be ‘informed of the grounds of arrest.’Even a prima facie reading points towards the necessity of the availability of sufficient material on record which is legally admissible and is of sterling quality so as to justify the assumption of guilt on the part of the accused by the officer concerned, putting a stringent test to be followed before making an arrest which is akin to the twin-conditions of bail in Section 45 of the Act. Hence, the intent behind using the word ‘guilt’ was to distinguish it from mere suspicion, putting a higher yardstick for arrest.
Further, although the act mandates recording of the reasons to believe that an accused has committed an offense punishable under the Act in writing, but it does not make any such specification regarding informing the accused about the grounds of arrest, raising ambiguity about the manner in which such information has to be provided. Several High Courts over the years have provided differing legal opinions on the manner in which the grounds for arrest are to be communicated and whether an oral communication is legally valid under Section 19. Fortunately, this position was clarified by the judgement of Pankaj Bansal v Union of India which mandated the communication to be done in writing.
Procedural Safeguards under Section 19: Existing Jurisprudence
In Mr. Kejriwal’s case, the Delhi High Court, while refusing his plea to consider his arrest and the consequent remand order illegal, arbitrary and in violation of Section 19 of PMLA, referred to the judgements of Vijay Madanlal Choudhary v. Union of India and V. Senthil Balaji v. The State represented by Deputy Director.The Court reasoned that there are ample inbuilt safeguards from illegal detention under the Act along with an interplay of Section 19 with Section 167 of Cr.P.C authorising remand by the ED.
In Vijay Madanlal Chaudhary v UOI, the validity of Section 19 was challenged as it enabled arrests without securing the minimum safeguards provided under the Cr.P.C as it does not involve registration of FIR, provides restricted access to Enforcement Case Information Report (ECIR), impinging the right of the accused to know the complete nature of allegations against her and effectively according the ED with unbridled powers. Further, it was argued that Section 50 of the Act enables officers of the ED to summon the accused to record statements on oath which are legally admissible. This ought to hit the bar under Section 25 of the IEA and must also be read down in terms of Article 20 (3) of the Constitution. The Court, while distinguishing the ECIR from an FIR,held it to be an internal document of the ED which was not required to be furnished to the accused as it would reveal incriminating material of a sensitive nature against the accused having a deleterious impact on the inquiry/investigation especially considering the special nature of the legislation. Further, the Court held that statements made under Section 50 cannot be hit by the bar under Section 25 of IEA as ED officers are not police officers within its meaning and the test for determining whether a person is a police officer involves weighing the magnitude of powers enjoyed by her which are akin to a police officer against the dominant purpose of appointment under a statute and the sum total of powers enjoyed by the virtue of her office.
In V. Senthil Balaji v. The State, it was contended by the petitioner that no specific procedure of arrest has been laid down in PMLA apart from enabling an arrest under Section 19 which makes the application of Cr.P.C valid as has been sanctioned by the statute itself under Section 65. The case specifically dealt with the right of the accused to be served with prior notice under Section 41A of Cr.P.Cfor offenses below 7 years aspart of ordinary criminal procedure. The Court rendered the applicability of Cr.P.Cimpermissible as Section 19 of PMLA did in fact lay down a comprehensive procedure of arrest. Moreover, the court further held, offering of prior notice to the accused might seriously impair the ongoing investigation by placing the person in the know how.
III. Adequacy of safeguards from arrest under PMLA and Lingering Questions
An analysis of the above judgements wherein the Supreme Court has tried to assail concerns about the adequacy of procedural safeguards during arrest gives rise to pertinent questions. Firstly, does the recording of reasons for believing any person is guilty of an offense under PMLA in writing under Section 19 really obviate the need for supplying the accused with a copy of the ECIR? and if it is so, shouldn’t there be more clarity about the manner in which such reasons are to be recorded to ensure they are sufficient? Secondly, even though the power to summon any person under Section 50 of PMLA has been held to be in the nature of ‘inquiry’ and not ‘investigation’, is it fair to remove all procedural safeguards to be followed during inquiry/questioning considering that PMLA offenses are linked to the fact of crime with high possibility of future prosecution?
Although Section 65 of PMLA does mandate the applicability of Cr.P.C so far as it is not inconsistent with its provisions, the applicability of procedural safeguards under Cr.P.C. remain a controversial subject. However, interestingly, an interplay between Section 19 of PMLA which provides the procedure of arrest under PMLA and Section 167 of Cr.P.C which talks about court-sanctioned custodial detentions (effectively procedure after arrest) has been well-recognised even though it explicitly uses the word ‘police custody’. If a different and distinct methodology has not been formulated for enforcing procedural safeguards from arrest under PMLA as of now, then, isn’t it valid for the safeguards under Cr.P.C. to follow especially when the statute itself provides so?
Conclusion
The aim of this paper was to analyse the parameters to be followed under PMLA to justify the necessity of arrest and whether there are adequate safeguards from such arrest present to the accused under the act. It is evident from the language of the section that the threshold of proof required to arrest a person under Section 19 is higher than a mere suspicion but an analysis of two major judgements speaking on procedural safeguards reveals that the court considers the act to be having sufficient safeguards and holds provisions under ordinary criminal procedure in Cr.P.C. as inapplicable considering the special nature of the statute.
In cases of socio-economic offenses like the PMLA where the executive justifies the stringency of provisions which may prejudice individual liberty by employing the rationale of securing the larger goal of preserving the state’s interests, the judiciary is often cowered into giving precedence to investigative needs over individual liberty. However, a balance needs to be achieved in this regard to ensure such intrusions in personal liberty are proportionate with the interests to be achieved.
‘V. References
- Arvind Kejriwal v Directorate of Enforcement(2024) 2024 SCC OnLine Del 2685
- Vijay Madanlal Choudhary v. UOI, (2023) 21 ITR-OL 1
- Senthil Balaji v. The Staterepresented by Deputy Director (2023) SCC OnLine SC 934,
- Abhinav Sekhri, ‘Old Wine in New Bottles? — The Judgment in Vijay Madanlal Choudhary’, The Proof of Guilt, https://theproofofguilt.blogspot.com/2022/07/old-wine-in-new-bottles-judgment-in.html
- Esha Rathi, ‘Grounds of Arrest: Navigating Section 19 of the PMLA’, IndiaCorpLaw,https://indiacorplaw.in/2024/02/grounds-of-arrest-navigating-section-19-of-the-pmla.html.’
This blog is authored by Tamishra Chakraborty, Ist year student, Hidayatullah National Law University, Raipur.