2024 Supreme(SC) 576

SUPREME COURT OF INDIA
SANJIV KHANNA, DIPANKAR DATTA, JJ.
Arvind Kejriwal – Appellant
Versus
Directorate Of Enforcement – Respondent
Criminal Appeal No. 2493 of 2024
Decided on : 12-07-2024

IMPORTANT POINTS
(1) Legality of arrest – Power to arrest is fenced with preconditions and requirements, which must be satisfied prior to arrest of a person.
(2) Legality of arrest – Delhi liquor scam – Special Court is not bound by opinion of designated/authorised officer recorded in “reasons to believe” – Court’s opinion is different and cannot be equated to an officer’s opinion.
(3) Principle of parity or equality enshrined under Article 14 of Constitution cannot be invoked for repeating or multiplying irregularity or illegality – If any advantage or benefit has been wrongly given, another person cannot claim same advantage as a matter of right on account of error or mistake.

Headnote:

(A) Prevention of Money Laundering Act, 2002 – Section 19 – Constitution of India – Article 22(1) – Legality of arrest – Power to arrest is fenced with preconditions and requirements, which must be satisfied prior to arrest of a person – These preconditions act as stringent safeguards to protect life and liberty of individuals – Section 19 includes inbuilt checks that designated officers must adhere to – First, “reasons to believe” of alleged involvement of arrestee have to be recorded in writing – Secondly, while affecting arrest, reasons shall be furnished to arrestee – Lastly, a copy of order of arrest along with material in possession have to be forwarded to safe custody of adjudicating authority – This ensures fairness, objectivity and accountability of Designated Officer while forming their opinion, regarding involvement of arrestee in offence of money laundering – To introduce checks and balances, Section 19(1) imposes safeguards to protect rights and liberty of arrestee – This is in compliance with mandate of Article 22(1) of Constitution of India – If arrest is not in conformity with Section 19(1) of PML Act, mere passing of order of remand, in itself, would not be sufficient to validate person’s arrest. (Paras 9, 10, 11 and 15)

(B) Prevention of Money Laundering Act, 2002 – Section 19 – Legality of arrest – Power to arrest a person without warrant from court and without instituting criminal case is a drastic and extreme power – Legislature has prescribed safeguards in the form of exacting conditions as to how and when power is exercisable – Conditions are salutary and serve as a check against exercise of an otherwise harsh and pernicious power – Given that Legislature has prescribed preconditions to prevent abuse and unauthorised use of statutory power, wielding of such power by an authorized person or authority cannot be conclusive – Exercise of power and satisfaction of conditions must and should be put to judicial scrutiny and examination, if arrestee specifically challenges their arrest – Power of judicial review shall prevail and court/magistrate is required to examine that exercise of power to arrest meets statutory conditions – Power of judicial review remains both before and after filing of criminal proceedings/prosecution complaint. (Paras 18, 19, 21 and 23)

(C) Prevention of Money Laundering Act, 2002 – Section 19 – Legality of arrest – There is difference between “reasons to believe” and “suspicion” – “Suspicion” requires lower degree of satisfaction, and does not amount to belief – Belief is beyond speculation or doubt and threshold of belief “conveys conviction founded on evidence regarding existence of a fact or doing of an act” – Providing written “grounds of arrest”, though a must, does not in itself satisfy compliance requirement – Authorized officer’s genuine belief and reasoning based on evidence that establishes arrestee’s guilt is also legal necessity – As “reasons to believe” are accorded by authorised officer, onus to establish satisfaction of the condition will be on DoE and not on arrestee – Subjective opinion of arresting officer must be founded and based upon fair and objective consideration of material as available with them on date of arrest. (Paras 27, 28 and 29)

(D) Indian Penal Code, 1860 – Section 26[Section 2(29) of BNS, 2023] – Prevention of Money Laundering Act, 2002 – Section 19 – Legality of arrest – “Reason to believe” is not the same thing as “suspicion” or “doubt” – “Reason to believe” has to be distinguished and is not the same as grave suspicion – It refers to reasons for formation of belief which must have a rational connection with or an element bearing on formation of belief – Reason should not be extraneous or irrelevant for the purpose of provision – Requirements in Section 19(1) are jurisdictional conditions to be satisfied for arrest, validity of which can be challenged by accused and examined by court – Circumstances need not necessarily be capable of absolute conviction or inference but it is sufficient if circumstances are such that it creates a chain of probable reasoning leading to conclusion or inference about nature of thing – Requirements in Section 19(1) are jurisdictional conditions to be satisfied for arrest, validity of which can be challenged by accused and examined by court – “Reasons to believe” should be furnished to arrestee to enable him to exercise his right to challenge validity of arrest – Courts scrutinize validity of arrest in exercise of power of judicial review – If adequate and due care is taken by DoE to ensure that “reasons to believe” justify arrest in terms of Section 19(1) of PML Act, exercise of power of judicial review would not be a cause of concern – Doubts will only arise when reasons recorded by authority are not clear and lucid and a deeper and in-depth scrutiny is required. (Paras 34, 35, 36 and 39)

(E) Indian Penal Code, 1860 – Section 26[Section 2(29) of BNS, 2023] – Prevention of Money Laundering Act, 2002 – Sections 19 and 45 – Legality of arrest – Delhi liquor scam – Appellant is sitting Chief Minister of Delhi – Special Court is not bound by opinion of designated/authorised officer recorded in “reasons to believe” – Court’s opinion is different and cannot be equated to an officer’s opinion – While Special Court’s opinion is determinative, and is only subject to appeal before higher courts, DoE’s opinion is not in same category as it is open to judicial review – Section 45 of PML Act does not stipulate stage when accused may move application for bail – Bail application can be submitted at any stage, either before or after complaint is filed – Right to bail under Section 45 of PML Act is not dependent on stage of proceedings – An officer cannot be allowed to selectively pick and choose material implicating person to be arrested – Power to arrest under Section 19(1) of PML Act cannot be exercised as per whims and fancies of officer – Subjectivity of opinion is not a carte blanche to ignore relevant absolving material without explanation – Section 19(1) of PML Act does not permit arrest only to conduct investigation – Section 45 gives primacy to opinion of DoE when it comes to grant of bail – DoE should act uniformly, consistent in conduct, confirming one rule for all – Matter concerning legality of arrest referred to larger Bench – Interim bail granted to Arvind Kejriwal against conditions – Interim bail may be extended or recalled by larger Bench. (Paras 44, 46, 55, 56, 74, 79, 84 and 85)

(F) Constitution of India – Article 14 – Right to equality – Principle of parity or equality enshrined under Article 14 of Constitution cannot be invoked for repeating or multiplying irregularity or illegality – If any advantage or benefit has been wrongly given, another person cannot claim same advantage as a matter of right on account of error or mistake – However, this principle may not apply where two or more courses are available to authorities. (Para 79)

Facts of the case:

This is not an appeal against refusal or grant of bail. Instead, this appeal impugns the validity of arrest under Section 19 of Prevention of Money Laundering Act, 2002. It raises a pivotal question regarding scope and ambit of trial court/courts to examine legality of arrest under Section 19 of Prevention of Money Laundering Act, 2002. The issue is legal in nature.

Findings of Court:

Observations made in this judgment are for deciding present appeal and will not be construed as findings on merits of case/allegations. Facts, as alleged, have to be established and proved. Application for regular bail, if pending consideration or required to be decided, shall be decided on its own merits.

Result : Matter referred to larger Bench.