The court upheld that arrest under the Prevention of Money Laundering Act was lawful as procedural requirements of Section 19 were sufficiently met, emphasizing limits of judicial review on subjective satisfaction by arresting officers.

JUDGMENT :

SUVRA GHOSH, J.

1. The petitioner who is in custody since April 4, 2025 in connection with the present case has challenged the legality of his arrest and remand on the following grounds:-

i. The arrest is violative of the safeguards contained in Section 19(1) and 19(2) of the Prevention of Money Laundering Act , (hereinafter referred to as the PMLA).

ii. Both “reasons to believe” and “grounds of arrest”are a mere sham and pretence lacking the spirit, substance and sanctity.

iii. “Material in possession” on the basis of which the arresting officer has arrived at a subjective satisfaction of guilt of the petitioner is incomplete, inchoate and inconclusive as extraneous material has been taken into consideration and the relevant has been eschewed.

iv. Alleged non-cooperation could not be the basis of arrest under Section 19 (1) of the PMLA which contemplates arrest only if the arresting officer is in possession of the “material” on the basis of which he may “record reasons in writing” that the person to be arrested is guilty of an offence.

v. It is not clear when, what and how material in possession was sent to the Adjudicating Authority in compliance with Section 19 (2).

2. Seeking release of the petitioner forthwith, learned counsel for the petitioner has submitted has hereunder:-

FIR No. 60 dated June 17, 2024 was registered at Cyber P.S., Kolkata, under Section 66C /66D of the I.T. Act read with Sections 120B /170/384/419/420/465/467/468/471 of the Indian Penal Code and eight accused persons were arrested. The FIR relates to an alleged financial fraud of Rs. 47,00,000/-. The petitioner was neither named in the FIR, nor has any nexus with the accused persons arrested. The petitioner was arrested on February 23, 2025. The FIR was treated as a predicate offence and ECIR KLZO-I/06/2025 was registered by the Enforcement Directorate (for short the E.D.) on March 24, 2025. On prayer of the E.D. the petitioner was produced before the learned Chief Judge, City Sessions Court, Calcutta on April 4, 2025 and was arrested on the same day by the E.D. upon being permitted by the Court. The “grounds of arrest” and “reasons to believe” were furnished to the petitioner on the same date. The learned Court did not satisfy itself regarding compliance of Section 19 (1) of the PMLA before directing issuance of production warrant or arrest. The E.D. primarily relied upon the investigation conducted by the cyber team and from March 24, 2025 when the ECIR was registered till April 4, 2025 when the petitioner was arrested, no investigation appears to have been held. The incriminating material referred to in the grounds of arrest and reasons to believe are borrowed from the investigation of the scheduled offence.

3. The material was forwarded to the Adjudicating Authority by the E.D. by a letter dated April 7, 2025, i.e., three days after the arrest. There are several inconsistencies and contradictory representations in the grounds of arrest which indicate that accusations against the petitioner therein are speculative and unsupported by investigation. The predicate offence consistently identifies Chirag Kapoor as the individual responsible for the alleged activities without implicating the petitioner in the said role.

4. The details of the petitioner’s ICICI Bank account are with the E.D. and reflects a total cash deposit of Rs. 5,44,100/- in the last five financial years. These deposits were made by the petitioner himself at the ATM cash machine located near his residence and pertains to his declared income received in cash which is dis