Telangana High Court
Shri Sanjay Kumar Agarwal vs Directorate Of Enforcement on 29 April, 2022
Author: K. Lakshman
Bench: K. Lakshman
HON'BLE SRI JUSTICE K. LAKSHMAN
CRIMINAL PETITION No.2109 OF 2022
ORDER:
The present criminal petition is filed seeking to quash the order dated 11.02.2022 and all subsequent orders of remand passed in F.NO. ECIR/HZO/08/2012 pending on the file of the Metropolitan Sessions Judge - cum - Special Court under the Prevention of Money Laundering Act, 2002 (PMLA) at Nampally, Hyderabad.
2. Heard Mr. T. Pradyumna Kumar Reddy, learned Senior Counsel representing Mr. N. Naveen Kumar, learned counsel for the Petitioner and Mr. B. Narsimha Sarma, learned Standing Counsel for the Respondent.
3. Facts of the case
i) The Petitioner is an accused in various crimes across different states in the country. The present proceedings have their genesis in a case bearing RC-4(E)/2011 registered by the CBI, Bank Securities & Frauds Cell Bangalore based on the complaint filed by the State Bank of India, Bank Street, Koti, Hyderabad KL,J Crl.P. No.2109 of 2022 2 under Sections 120B r/w/ 420, 467, 468, 471 of the Indian Penal Code, 1860 and Sections 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988. In the said case, the allegations against the Petitioner are that he forged various letters in the name of Punjab National Bank and obtained illegal delivery of metal gold from SBI, Hyderabad and caused a wrongful loss of Rs. 62.02 Crore to the SBI, Hyderabad. A charge sheet bearing C.C. No. 40 of 2018 was filed on the file of XXI Additional Chief Metropolitan Magistrate - cum - Spl. JMFC for Trial of CBI Cases at Hyderabad.
ii) Based on the above complaint and considering it as a schedule offence, the Respondent herein registered ECIR/HZO/08/2012 under Sections 3 & 4 of the Prevention of Money Laundering Act, 2002 (hereinafter 'PMLA'). The Respondent commenced the investigation and the Petitioner and his family members were summoned under Section 50 of the PMLA. According to the Respondent, summons were issued on 22.04.2014 to appear on 12.05.2014, on 17.11.2014 to appear on 26.11.2014, 31.05.2016 to appear on 08.06.2016 and on 08.06.2016 to appear KL,J Crl.P. No.2109 of 2022 3 on 15.06.2016. According, to the Petitioner he had duly replied to all the summons.
iii) Subsequently, on 04.04.2018 the Petitioner and his son were apprehended at the Kolkata airport by the DRI, Kolkata for allegedly diverting the consignment of jewellery meant for exports to his father. DRI, Kolkata initiated proceedings against the Petitioner under the Customs Act, 1962 and he was remanded into judicial custody. While things stood thus, a preventive detention order was passed under the Conservation of Foreign Exchange and Prevention of Smuggling Activities (COFEPOSA) Act, 1974 against the Petitioner. The same was ultimately quashed by the Supreme Court.
iv) The Petitioner obtained a regular bail in the proceedings initiated by the DRI, Kolkata. Subsequently, the proceedings initiated by the DRI, Kolkata were challenged by the Petitioner's wife before the Supreme Court.
v) Subsequently, on 29.03.2019 and 18.12.2020 show cause notices were issued by the DRI, Kolkata under the Customs Act, 1962 to the Petitioner and his family members. Further, KL,J Crl.P. No.2109 of 2022 4 proceedings under the Customs Act, 1962 were also initiated by the DRI, Hyderabad by issuing summons dated 30.10.2019. The proceedings initiated by the DRI, Hyderabad were challenged before this Court vide W.P. No. 196 of 2020. This Court vide orders dated 16.01.2020 and 25.02.2020 granted an interim order that no coercive steps shall be taken against the Petitioner. However, on 22.01.2021 another show cause notice was issued by the DRI, Hyderabad in respect of the alleged diversion of duty free gold to the domestic market.
vi) On 09.03.2021, Enforcement Directorate (ED), Kolkata conducted a search at the Petitioner's residence and arrested the Petitioner's son. ED, Kolkata considering the complaint and proceedings of DRI, Kolkata under the Customs Act, 1962 registered ECIR/KLZO/-II/01/2021 against the Petitioner and his family members. The said ECIR is under challenge vide W.P. (Appellate) No. 8318 of 2021 before the Calcutta High Court.
vii) While things stood thus, the Respondent herein issued summons to the Petitioner's wife on 19.03.2021 to appear on 14.04.2021. The said summons were issued in relation to KL,J Crl.P. No.2109 of 2022 5 ECIR/HZO/08/2012 registered in the year 2012. W.P. No. 9926 of 2021 was filed by the Petitioner and his wife before this Court seeking to quash ECIR/HZO/08/2012 and to set aside the summons issued to the Petitioner's wife. This Court vide order dated 26.06.2021 granted an interim order directing the Respondent herein not to issue any fresh summons till they file a counter.
viii) On 29.11.2021, the Petitioner herein was arrested by ED, Kolkata in relation to ECIR/KLZO/-II/01/2021. The Petitioner was remanded to judicial custody vide order dated 13.12.2021 till 23.12.2021. The Petitioner was lodged in Presidency Correctional Home, Kolkata.
ix) While the Petitioner was in judicial custody in Kolkata, the Respondent herein filed a petition under Section 267 of the Cr.P.C. r/w Section 50 of the PMLA seeking issuance of P.T. warrants and a direction to Superintendent, Presidency Correctional Home, Kolkata so as to produce the Petitioner before the Metropolitan Sessions Judge, Hyderabad and to continue the investigation in ECIR/HZO/08/2012. The copy of the petition under Section 267 of the Cr.P.C. r/w Section 50 of the PMLA was KL,J Crl.P. No.2109 of 2022 6 also served on the Petitioner through the Superintendent, Presidency Correctional Home, Kolkata and in the said petition, the Petitioner was informed that he has been arrested under Section 19 of the PMLA.
x) On 03.01.2022, the petition seeking P.T. warrant was allowed in relation to ECIR/HZO/08/2012 and the Superintendent, Presidency Correctional Home, Kolkata was directed to produce the Petitioner on or before 19.01.2022. Similarly, a P.T. warrant was also issued in relation to C.C. 40 of 2018 registered by the CBI and the Petitioner herein was directed to be produced before the CBI Court on 19.01.2022.
xi) While things stood thus, the Petitioner herein vide Crl.P.No. 418 of 2022 challenged the order dated 03.01.2022 passed in ECIR/HZO/08/2012 allowing the P.T. warrant. However, the matter was disposed as infructuous as the Petitioner was already produced in C.C. No. 40 of 2018. However, liberty was granted to the parties to take necessary steps in accordance with law. In the said case, an application under Section 167 of the KL,J Crl.P. No.2109 of 2022 7 Cr.P.C. was filed and the Petitioner was remanded to judicial custody for fourteen (14) days.
xii) It is relevant to note that the Petitioner was only produced in C.C. No. 40 of 2018 on 19.01.2022. He was not produced in ECIR/HZO/08/2012 on 19.01.2022. According to the Respondent herein, after his production in C.C. No. 40 of 2018, the Petitioner complained of severe heartache. He was rushed to Gandhi Hospital wherein he tested positive for Covid-19.
xiii) As the Petitioner was not produced in ECIR/HZO/08/2012, a fresh application under Section 267 of the Cr.P.C. r/w Section 50 of the PMLA was filed seeking issuance of a fresh P.T. warrant. The said application was allowed vide order dated 02.02.2022 directing the Petitioner herein to be produced on or before 11.02.2022. The Petitioner herein filed Crl.P.No. 1130 of 2022 before this Court challenging the order dated 02.02.2022 in ECIR/HZO/08/2012. This Court vide order dated 09.02.2022 observed that any further proceedings in ECIR/HZO/08/2012 are subject to the result of Crl.P.No. 1130 of 2022.
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xiv) The Petitioner was produced in ECIR/HZO/08/2012 on 11.02.2022. The Respondent herein filed an application under Section 167 of the Cr.P.C. r/w Section 50 & 65 of the PMLA seeking judicial custody of the Petitioner herein for fifteen (15) days. Further, another application under Section 167(3) of the Cr.P.C. r/w Section 50 & 65 of the PMLA seeking police custody for ten (10) days.
xv) The Metropolitan Sessions Judge vide order dated 25.02.2022 remanded the Petitioner to judicial custody till 25.02.2022. On 16.02.2022, the said court also granted custody of the Petitioner to the Respondent department for four (4) days from 17.02.2022 to 20.02.2022. Further custody to the Respondent department was granted vide order dated 21.02.2022 from 22.02.2022 to 25.02.2022.
xvi) On 26.02.2022, the Respondent herein filed a memo seeking extension of judicial custody in ECIR/HZO/08/2012. The court on the same day extended the judicial custody for a further period of fourteen (14) days.
KL,J Crl.P. No.2109 of 2022 9 xvii) Therefore, the present criminal petition is filed seeking to quash the order dated 11.02.2022 and all subsequent orders remanding the Petitioner to judicial custody.
4. Contentions of the Petitioner
i) The impugned order dated 11.02.2022 is in complete disregard to the order dated 09.02.2022 passed by this Court in Crl.P.No. 1130 of 2022 and was passed in a casual and mechanical manner. Further, the trial court failed to comply with the order dated 09.02.2022.
ii) The trial court ought to have considered that the Respondent's application seeking judicial custody is vexatious, misconceived and was filed solely to harass the Petitioner. The said application suppressed the filing of W.P. No. 9926 of 2021 seeking to quash the proceedings in ECIR/HZO/08/2012.
iii) The order passed by this Court in Crl.P.No. 418 of 2022 was also not placed on record when judicial remand of the Petitioner was sought. Further, the orders dated 02.02.2022 and 22.02.2022 passed in C.C. No. 40 of 2018 and C.C. No. 23 of 2018 granting bail to the Petitioner in the scheduled offences by the XXI KL,J Crl.P. No.2109 of 2022 10 Additional Chief Metropolitan Magistrate - cum - Spl. JMFC for Trial of CBI Cases were also not placed on record.
iv) The arrest of the Petitioner is illegal and Section 19 of the PMLA was not complied with. Section 19 casts a heavy burden on the Respondent authority to satisfy that the person is guilty of the offence of money laundering. The Respondent has failed to discharge the burden and the judicial custody of the Petitioner is tantamount to arrest without the compliance of Section 19 of the PMLA. Reliance was placed on Directorate of Enforcement, represented by its Assistant Director, Hyderabad Zonal Unit v. Kamma Srinivass Rao1 rendered by the High Court for the State of Telangana and Rajbhushan Omprakash Dixit v. Union of India2 rendered by the High Court of Delhi.
v) The alleged investigation in ECIR/HZO/08/2012 attained quietus in the year 2016 and is being carried out again after a decade since it was initiated in 2012. Summons have been issued to the Petitioner and his wife in violation of the proviso to Section 160 of the Cr.P.C.
1 . Crl.P. No.9825 of 2021 & batch, decided on 15.02.2022 2 . W.P. (Crl) 363/2018 & Crl.M.A. 2151/2018, decided on 19.02.2018 KL,J Crl.P. No.2109 of 2022 11
vi) The Petitioner was remanded to judicial custody without considering the fact that the proceedings were initiated again after a period of five years. Further, the matter is sub judice before this Court in W.P. No. 9926 of 2021. The trial Court without considering the said aspects remanded the Petitioner to judicial custody.
vii) The investigation itself is baseless and illegal. The procedure under Chapter XII of the Cr.P.C. was not complied with. Therefore, the investigation is hit by legal maxims "Debile Fundamentum Fallit Opus" and "SublatoFundamentoCadit Opus".
viii) The Petitioner as on date is not arraigned as an accused in ECIR/HZO/08/2012 and no complaint is filed and no proceedings were initiated against the Petitioner.
ix) The copy of the ECIR/HZO/08/2012 was not supplied to the Petitioner which vitiates the entire proceedings and the issuance of the summons to the Petitioner and his wife. Reliance was placed on Youth Bar Association v. Union of India3. 3 . (2016) 9 SCC 473.
KL,J Crl.P. No.2109 of 2022 12
x) The impugned order dated 11.02.2022 amounts to abuse of process and is aimed at circumventing the orders passed in W.P. No. 9926 of 2021 and Crl.P.No. 1130 of 2022.
xi) Therefore, the impugned order is liable to be quashed.
5. Contentions of the Respondent (Enforcement Directorate)
i) The Petitioner cannot claim any benefit under Section 160 of the Cr.P.C. to contend that summons could not have been issued to him. PMLA is a complete code in itself and is a special legislation. Power to issue summons to any person under Section 50 of the PMLA will override the general power conferred on the police under Section 160 of the Cr.P.C. Therefore, Section 160 of the Cr.P.C. will not apply to the proceedings under the PMLA. Reliance was placed on Vakamulla Chandrasekhar v. Enforcement Directorate 4 and Kamma Srinivas Rao (Supra).
ii) The Petitioner fraudulently obtained the delivery of gold from banks like State Bank of India and Punjab National Bank by forging documents. The obtained gold was sold in the open market 4 . 2017 SCC OnLine Del. 12810 KL,J Crl.P. No.2109 of 2022 13 which resulted in the Petitioner earning huge profits as payment of custom duty was evaded. It is suspected that the Petitioner diverted the sale proceeds of the illegally obtained gold to other companies controlled by him. Prima facie, a case of money laundering is made out against the Petitioner.
iii) Summons were issued to the Petitioner on various dates. But he only appeared on 26.11.2014. He did not appear when subsequent summons were issued and failed to provide any documentary proof of his business dealings.
iv) Under Section 267 of the Cr.P.C., P.T. warrants can be issued to any detained person in the course of inquiry, trial or other proceeding, The term 'other proceedings' cannot be restrictively interpreted and Section 267 can be resorted to produce the accused for the purpose of investigation. Once arrest is shown, the courts have the power to invoke Section 267 of the Cr.P.C. Reliance was placed on C. Natesan v. State of Tamil Nadu5.
v) The scheme under PMLA does not require supplying of the copy of the ECIR to the accused.
5 . 1999 Crl.L.J. 1382 KL,J Crl.P. No.2109 of 2022 14
vi) The writ petition W.P. (Appellate) No. 8318 of 2018 before the Calcutta High Court pertains to a different crime and has no bearing to the investigation carried out by the Respondent herein in ECIR/HZO/08/2012.
vii) The Petitioner cannot seek protection under the order dated 09.02.2022 passed in Crl.P.No. 1130 of 2022 and order dated 26.06.2021 passed in W.P. No. 9926 of 2021. This Court did not stay the investigation and further proceedings in ECIR/HZO/08/2012. In the absence of any stay on proceedings, the Petitioner cannot contend that the impugned order disregards the proceedings in Crl.P.No. 1130 of 2022 and W.P. No. 9926 of 2021.
viii) The Petitioner was not produced on 19.01.2022 pursuant to the PT warrant dated 05.01.2022 as he complained of heartache and tested positive for Covid-19. The said PT warrant became infructuous and this Court in Crl.P.No. 418 of 2022 directed the Respondent to obtain fresh P.T. warrant. The same was obtained vide order dated 02.02.2022. Therefore, the accused was produced on 11.02.2022 and his remand under Section 167 of the Cr.P.C. is legal.
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ix) The Petitioner cannot contend that Section 19 of the PMLA was not complied with. The grounds of his arrest and the fact that he is arraigned as an accused was clearly mentioned in the application under Section 267 of the Cr.P.C. & Section 50 of the PMLA. The said application was duly served upon the Petitioner through Superintendent, Presidency Correctional Home, Kolkata on 23.12.2021. Therefore, the Petitioner was aware of the grounds of his arrest and Section 19 of the PMLA was complied with.
x) Grant of bail in schedule offences will not preclude the investigating agency to proceed in accordance with law.
xi) The Petitioner is an accused in various crimes and is wanted by multiple agencies like the CBI, ED Kolkata, ED Hyderabad, DRI Kolkata, DRI Hyderabad and the COFEPOSA authorities. Therefore, interference with the investigation at this stage will cause grave injustice to the Respondent.
6. Findings of the Court
i) It is clear from the facts of the case that the order dated 11.02.2022 remanding the Petitioner and the subsequent orders extending the remand are under challenge. Therefore, this Court KL,J Crl.P. No.2109 of 2022 16 has to decide whether the trial court was justified in remanding the Petitioner when he was already in custody in relation to another offence in ECIR/KLZO/-II/01/2021 in the Presidency Correctional Home, Kolkata.
ii) Section 267 provides a procedure to deal with a person who is alleged to have committed various offences. Section 267 of the Cr.P.C. contemplates a procedure where the court can require the presence of a person who is detained or confined in any other offence in any other jurisdiction. The investigation officer/agency may file an application under Section 267 of the Cr.P.C. for issuance of a P.T. warrant directing the prison authorities where the accused lodged to be produced before the court in a case other than the one in which he is already in custody.
iii) Once the person is produced before the court pursuant to the issuance of the P.T. warrant, a question arises whether such a person can be again sent to judicial custody under Section 167 of the Cr.P.C. by the court before which he was produced. In other words, a question arises whether a person, who is already in judicial custody in one case, on production before another court KL,J Crl.P. No.2109 of 2022 17 under Section 267 of the Cr.P.C. can he be again remanded to judicial custody under Section 167 of the Cr.P.C. The said question was examined and explained by a Division Bench of the Andhra Pradesh High Court in Attained Riswan v. State of A.P.6 The relevant paragraphs are extracted below:
"11. In a given case, if accused is already in judicial custody in connection with one crime and when the Investigation Officer wants to effect his arrest in some other crime, the Apex Court in C.B.I. v. Anupam, J. Kulakarni's case (1 supra) observed that he can effect formal arrest of the accused in prison, but he cannot take him into custody without taking prior approval of the concerned court, as his detention has already been authorized by a concerned Magistrate in connection with some other case. It is not permissible for the Police Officer to remove the person from that place by effecting his arrest. Hence, the apex court in the judgment referred to above used the words 'formal arrest'. When once such "formal arrest" is effected in prison, it would not be possible for the police officer to produce him before the nearest Magistrate within 24 hours for the purpose of further remand, since he cannot be removed or moved out from the jail. In such a situation, the only method by which he can seek production of the accused before the concerned Magistrate for the purpose of remand is to invoke the provision under Section 267 Cr.P.C. It is to be noted here that P.T. warrant can be issued by that Magistrate within whose jurisdiction the crime is registered and in which the production is sought, but 6 (2019) 3 ALT 474.
KL,J Crl.P. No.2109 of 2022 18 not by any other Magistrate. It is also to be noted that production on P.T. warrant is sought from the prison through the Superintendent of Jail and not through any other mode.
12. The question which would then fall for consideration, is, whether by effecting such formal arrest, the accused would be in the custody of the police, who executed the formal arrest. Though the words "arrest" and 'custody' looks synonymous, a Full Bench of Madras High Court in Roshan Beevi v. Joint Secretary, Government of T.N. (2) 1893 MLW (crl) 289 Mad, held that 'custody; and 'arrest' are not synonymous terms. The Full Bench held that though custody may amount to arrest in certain circumstances, but not in all circumstances. The findings given in the said judgment came to be tested before the Apex Court in the case of Directorate of Enforcement v. Deepak Mahajan, (1994) 3 SCC 440. While confirming the stand taken by the Full Bench in Roshan Beevi's case (2 supra), the Apex Court held as under:
"Thus the Code gives power of arrest not only to a police officer and a Magistrate but also under certain circumstances or given situations to private persons. Further, when an accused person appears before a Magistrate or surrenders voluntarily, the Magistrate is empowered to take that accused person into custody and deal with him according to law. Needless to emphasize that the arrest of a person is a condition precedent for taking him into judicial custody thereof. To put it differently, the taking of the person into judicial custody is followed after the arrest of the person concerned by the Magistrate on appearance or surrender. It will be appropriate, at this, to note that in every arrest, there is custody but not vice versa and that both the words 'custody' and 'arrest' are not KL,J Crl.P. No.2109 of 2022 19 synonymous terms. Though 'custody' may amount to an arrest in certain circumstances but not under all circumstances. If these two terms are interpreted as synonymous, it is nothing but an ultra legalist interpretation which if under all circumstances accepted and adopted, would lead to a startling anomaly resulting in serious consequences, vide Roshan Beevi."
13. From a reading of the judgment of the Apex Court it is clear that in every arrest there is custody, but not vice versa.
14. The next question would be under what circumstances can a person be remanded to custody; Is it necessary that a remand of the accused can only be by the court after the arrest, or is there any other circumstance by which the Court can remand an accused under Section 167 Cr.P.C.
15. The issue came up for consideration before the Apex Court in Niranjan Singh v. Prabhakar Rajaram Kharote (4) (1980) 2 SCC 559. Justice V.R. Krishna Iyer speaking for the Bench observed as under:
"He can be in custody not merely when the police arrests him, produces him before a Magistrate and gets a remand to judicial or other custody. He can be stated to be in judicial custody when he surrenders before the Court and submits to its directions.
16. From the judgment of Niranjan Singh's case (4 supra) it is very clear that an accused can be in custody not only when the Police arrests him, but also when remanded on his surrender before the court and submitting to its jurisdiction. Therefore, as observed by the Apex Court in Anupam, J. Knlkarni 's case (1 supra) arrest shall never be a pre-condition for remand, and that one need not be arrested and produced before the KL,J Crl.P. No.2109 of 2022 20 Court, for the purpose of remand and to the judicial custody of the Court. He can be stated to be in judicial custody when remanded on his surrender before the Court and submits to its jurisdiction. However, his physical control or at least physical presence, coupled with submission to the jurisdiction and orders of Court, is a sine qua non. Be it on the production by the investigating agency, or on his own before the court. If the Court is of the opinion that he has committed cognizable offence and that his remand is warranted, it can direct him to be remanded to judicial custody under Section 167 Cr.P.C., though not arrested by any investigating agency. That being the position, the argument of the learned counsel for the petitioner that arrest is a pre-condition for remand may not be correct. But however, the power of remand is to be exercised under Section 167 Cr.P.C. only and not under Section 267 Cr.P.C. As held by us earlier, remand of an accused under Section 267 Cr.P.C. it self may not be correct, but remanding an accused by an order of court is a pre- requisite for the purpose of making an application for seeking bail.
XXX
18. In the instant case, the grievance of the petitioner is that the petitioner is involved in number of cases and that his remand is sought by the police on P.T. warrant without effecting his arrest and that the accused is being remanded on P.T. warrant, contrary to provisions of Section 267 Cr.P.C.
19. A Division Bench of the Madras High Court in State by Inspector of Police v. K.N. Nehru (Crl.O.P.(MD) No. 13683 of 2011, dated 3-11-2011) while dealing with an identical situation observed as under:
"In a case where the police officer deems it necessary to arrest when the accused is already KL,J Crl.P. No.2109 of 2022 21 in judicial custody in connection with a different case, in our considered opinion, there are two modes available for him to adopt. The first one is that, instead of effecting formal arrest, he can very well make an application before the Jurisdictional Magistrate seeking a P.T. warrant for the production of the accused from prison. If the conditions required under 267 of the Code of Criminal procedure, are satisfied, the Magistrate shall issue a P.T. Warrant for the production of the accused in court. When the accused is so produced before the Court, in pursuance of the P.T. Warrant, the police officer will be at liberty to make a request for remanding the accused, either to police custody or judicial custody, as provided in Section 167(1) of the Code of Criminal Procedure. At that time, the Magistrate shall consider the request of the police, peruse the case diary and the representation of the accused and then, pass an appropriate order, either remanding the accused or declining to remand the accused.""
iv) A reading of the above decision makes it clear that a person who is already in judicial custody can be produced in another case or proceeding under Section 267 of the Cr.P.C. Such a person can be sent to judicial custody under Section 167 of the Cr.P.C. only when a formal arrest of such a person is affected. In other words, a person who is arrested in a crime and who is remanded cannot be arrested in terms of Section 46 of the Cr.P.C. in another case as he is already in custody. In such cases, the KL,J Crl.P. No.2109 of 2022 22 investigating officer seeking his custody in another case may formally arrest such a person by informing him about the arrest and grounds of arrest through the prison authorities. Once such information of arrest is provided to the person who is in jail, the requirement of a formal arrest in another case is complied with.
v) Therefore, the investigating agency/officer who seeks judicial custody of a person who is produced in terms of Section 267 of the Cr.P.C. has to show that such a person is formally arrested. The details of the formal arrest have to be stated in the petition filed under Section 167 of the Cr.P.C. The court on satisfaction that the person has been formally arrested and his custody is required may remand the accused under Section 167 of the Cr.P.C.
vi) In the present case, the Petitioner was lodged in the Presidency Correctional Home, Kolkata in relation to the offences registered pursuant to ECIR/KLZO/-II/01/2021. The Respondent sought his production before the lower court under Section 267 of the Cr.P.C. and an application was filed under Section 167 seeking judicial and police custody. The Petitioner, inter alia, contended KL,J Crl.P. No.2109 of 2022 23 that the impugned order dated 11.02.2022 is illegal as Section 19 of the PMLA was not complied with.
vii) Section 19 of the PMLA deals with the power of arrest and the procedure of arrest. This Court in Kamma Srinivas Rao (Supra) explained the scope of Section 19 of the PMLA and the requirements to be satisfied before arresting any person. The relevant paragraphs are extracted below:
"24. Section 41 of the Cr.P.C. provides that police officers have the power to arrest a person, inter alia, on the grounds of reasonable complaint or reasonable suspicion. Section 41-A of the Cr.P.C. states that, in cases of cognizable offences, where the arrest of person is not required under Section 41(1) of the Cr.P.C., the police officer shall issue a notice directing the person to appear before him and cooperate with the investigation. If the person fails to comply the notice requirements, he may be arrested. Even if the person complies with the notice, if the police officer is of the opinion that the person's arrest is required, he may arrest the person by recording the reasons for such arrest. However, the procedure for arrest under PMLA is different. Under Section 19 of the PMLA, the Director, Deputy Director, Assistant Director or any other authorised officer can make an arrest. The officer making an arrest should satisfy the following conditions:
a. The officer should have a reason to believe that the person has been guilty of an offence under PMLA.
b. The reason to believe should be based on material which should be in the officer's possession.
KL,J Crl.P. No.2109 of 2022 24 c. The reason(s) to believe should be recorded in writing.
d. The grounds should be informed to the arrested person.
25. Section 19 of the PMLA also mandates that the officer making an arrest shall immediately forward the copy of the arrest order and the material in his possession based on which the arrest was made to the Adjudicating Authority (constituted under Section 6 of PMLA) in a sealed envelope. The arrested person shall be produced before the Special Court or other Court as the case may be within twenty-four hours."
viii) As stated above, the Petitioner was already in judicial custody in Kolkata. Therefore, the Respondent authority could not have directly arrested the Petitioner. On 22.12.2021, the Respondent sent a copy of the petition under Section 267 of the Cr.P.C. r/w Section 50 of the PMLA to the Superintendent, Presidency Correctional Home, Kolkata to be served upon the Petitioner herein. In the said petition, the Respondent authority stated that the Petitioner has been arrested under Section 19 of the PMLA. The said petition was served upon the Petitioner on 23.12.2021and was duly acknowledged by him.
ix) This raises a question whether serving of a copy of a petition under Section 267 of the Cr.P.C r/w Section 50 of the KL,J Crl.P. No.2109 of 2022 25 PMLA satisfies the requirements of Section 19 of the PMLA. This Court has perused the petition which was served upon the Petitioner on 23.12.2021. The said petition is detailed and clearly explains the Respondent authority's reasons to believe that the Petitioner is guilty of an offence under PMLA and the said reasons are also recorded in writing. The said petition also indicatesthat the authority had material in its possession based on which reasons to believe were formed.
x) Further, the grounds of the arrest were stated and the Petitioner was informed that he is an accused in ECIR/HZO/08/2012 and was arrested. The Respondent authority contended that the arrest order along with the material in its possession was forwarded to the Adjudicating Authority. The said fact is not disputed by the Petitioner. Therefore, according to this Court, Section 19 of the PMLA was complied with.
xi) By informing the grounds of arrest to the Petitioner, the Respondent authority had made a formal arrest. The custody of the Petitioner could only be sought after he was produced pursuant to the P.T. warrant under Section 267 of the Cr.P.C. Once he was KL,J Crl.P. No.2109 of 2022 26 produced, the trial court considered the fact that he was formally arrested in prison and considering the application under Section 167 of the Cr.P.C. remanded him to judicial custody. According to this Court, there is no illegality in the impugned order dated 11.02.2022 remanding the Petitioner.
xii) The other contentions raised by the Petitioner relate to abuse of process and non-consideration of orders passed in Crl.P.No. 1130 of 2022 and W.P. No. 9926 of 2021. This Court has perused the prayers in the said petitions and the orders granted therein. There is no order in the said petitions staying the investigation or proceedings in ECIR/HZO/08/2012. The contention of abuse of process and a delay of five years in issuing summons cannot be accepted as the same grounds have been taken in W.P. No. 9926 of 2021 seeking to quash the entire proceedings in ECIR/HZO/08/2012.
7. Conclusion:
i) The only question before this Court was whether the impugned order dated 11.02.2022 remanding the accused was illegal. According to this Court, the impugned order dated KL,J Crl.P. No.2109 of 2022 27 11.02.2022 and the subsequent orders extending the remand are legal and valid. Therefore, the present criminal petition is liable to be dismissed.
ii) The present Criminal Petition is accordingly dismissed. As a sequel, miscellaneous petitions, if any, pending in the Criminal Petition shall stand closed.
_________________ K. LAKSHMAN, J 29th April, 2022 Mgr