Issues on Arrest and Cognizance under PMLA referred to larger Bench of Delhi High Court

The Delhi High Court, while adjudicating a writ of Habeas Corpus, has referred certain questions regarding the cognizance of offences and arrest under the Prevention of Money Laundering Act (PMLA) to a larger bench..The petition filed by one Rajbhushan Omprakash Dixit was seeking issuance of a writ of Habeas Corpus against the Enforcement Directorate (ED) for releasing him from custody..The Income Tax Department had conducted a search operation in the premises of a company Sterling Biotech Limited and had seized documents which allegedly revealed that a large amount of cash had been given to various government servants. The petitioner is one of the directors of the company..Following this, cases were registered under the Prevention of Corruption Act as well as PMLA and the petitioner was eventually arrested pursuant to a non-bailable warrant issued against him..The petitioner sought a declaration that the issuance of the said non-bailable warrant, his arrest and the consequent remand orders were without the authority of law and in violation of Articles 14, 21 and 22 of the Constitution..Representing the petitioner, Senior Advocate Vikram Chaudhary submitted that the offences under Section 3 of PMLA were non-cognizable as was evidenced by the PMLA Amendment Act 20 of 2005 by which Section 45 of the PMLA stood amended with effect from July 1, 2005..He stated that the failure to amend the heading of Section 45 of PMLA to bring it in line with the amendment was perhaps inadvertent..Appearing for the ED, Standing Counsel Amit Mahajan cited a number of cases decided last year like Moin Akhtar Qureshi v. Union of India and Vakamulla Chandrashekhar v. Enforcement Directorate and contended that the offences under the PMLA continued to be cognizable..He further stated that there was no violation of the procedure laid down in PMLA regarding arrest and detention of the petitioner..The Division Bench of Justices S Muralidhar and IS Mehta held that the petitioner prima facie demonstrated that his arrest was contrary to Section 19 of PMLA and that the procedure adopted with respect to him by the ED was not in consonance with Chapter XII of CrPC..The Bench, however, observed that the decisions rendered by the coordinate Bench of the Court in cases regarding PMLA – Moin Akhtar Qureshi v. Union of India and Vakamulla Chandrashekhar v. Enforcement Directorate, require reconsideration..The Division Bench, therefore, framed the following questions and directed that the matter be placed before the Chief Justice for consideration by a larger Bench..The questions for consideration are as follows:.Consequent upon the amendment in Section 45 of the PMLA with effect from 1st July 2005, are the offences under the PMLA cognizable or non cognizable?Do the provisions of Chapter XII Cr PC apply to PMLA insofar as the offences under the PMLA are concerned and if so, to what extent?Under Section 19 of PMLA read with Rules 2 (h) and 2 (g) of the PML Arrest Rules read with Rule 6 and Form III thereof, does a person arrested under Section 19 (1) of the PMLA have to be furnished a copy of the grounds of arrest? If so, should they be furnished soon enough to enable the person arrested to apply for bail or to oppose the application for remand? What are the consequences of the failure to do so?Notwithstanding that the remand of the person arrested is under the orders of a Competent Court under the PMLA, will a writ of habeas corpus still maintainable if the initial arrest is itself shown to be unlawful?.On being assured that the petitioner would co-operate with the investigation, the Court allowed him to be released on bail during the pendency of the petition subject to certain conditions..Read the judgment below.

Issues on Arrest and Cognizance under PMLA referred to larger Bench of Delhi High Court

Ashutosh Gambhir

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