IMPORTANT POINT
Compliance with Section 19 of PMLA and satisfaction of twin conditions under Section 45 of PMLA are crucial for determining the validity of arrest and granting bail.

JUDGMENT :

Virender Singh, J.

Applicant-Hitesh Gandhi has filed the present application, under Section 439 of the Code of Criminal Procedure (hereinafter referred to as ‘CrPC’), seeking, his release on bail, during the pendency of trial, in case No. ECIR/SHSZO/04/2019, dated 22nd July, 2019, registered with the Enforcement Directorate office (ED), Sub Zonal office, Rani Villa, Bagrian House, Strawberry Hills, Chotta Shimla, Shimla, Himachal Pradesh.

2. According to the applicant, the necessary facts, giving rise to the present case, are as under:

3. The Central Bureau of Investigation, Shimla, Railway Board Building, The Mall, Shimla (hereinafter referred to as ‘CBI’) had registered RC0962019A0002,dated 7th May, 2019, under Sections 409, 419, 465, 466, 467 read with Section 120-B of the Indian Penal Code (hereinafter referred to as ‘IPC’) and Sections 13(1) (c), 13 (1) (d) read with Section 13 (2) of the Prevention of Corruption Act (hereinafter referred to as ‘PC Act’).

4. As per the case set up by CBI, the applicant, who is Vice Chairman of KC Group of Institutes, Pandoga, Una, H.P., has wrongly claimed the scholarship of the students belonging to certain class, who, without completing the concerned course, left the institute. After registration of the FIR by the CBI, the case was taken up by the Directorate of Enforcement (hereinafter referred to as ‘ED’), on the basis of which ECIR/SHSZO/04/2019, dated 22nd July, 2019, was registered, under the provisions of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as ‘PMLA’).

5. It is the further case of the applicant that on 29th August, 2023, raid was conducted by ED, in the premises of the applicant. Thereafter, summons were issued to the applicant, by hand, without specifying therein the place and date. Thereafter, the applicant was arrested on 29th August, 2023, from Chandigarh, at 09.20 p.m. at Nawashaher. These facts have been highlighted to plead that the arrest of the applicant was in violation of the provisions of Section 19 (3) of the PMLA.

6. According to the applicant, in order to cover up the delay, the arrest of the applicant has been shown at Chandigarh, instead of Navashaher. It is the case of the applicant that the applicant, through summons, was directed to appear before the authorized officer forthwith and those summons were issued at Nawashaher, when the raid was completed.

7. As per the further case of the applicant, he was to appear in the office of the Authority at Shimla and the date for the same was not specified.

8. Apart from this, it has been pleaded that the provisions of Section 19 (1) of PMLA have been violated, which mandated that the authorized officer, on the basis of the material in his possession, is bound to record the reasons to believe that any person has been guilty of the offence, punishable under PMLA. Not only this, the grounds of arrest are to be informed to him, as soon as, the said person is arrested. The reasons to believe, according to the applicant, have to be recorded before the arrest of the accused. Highlighting the fact that as per the arrest order, no grounds of arrest have been supplied to the applicant, which is complete violation of Section 19 (a) of PMLA.

9. It has further been pleaded, in the application, that during the course of investigation, the applicant was associated eight times since the year 2019 and lastly, he was associated on 29th August, 2023. He was arrested on 29th August, 2023 at 09.20 p.m., from his house at Mohal Bhatti Colony, Navashaher, Punjab.

10. The applicant has also tried his luck by moving bail application, under Section 439 CrPC, before the learned Special Judge, Shimla. However, his application has been dismissed, vide order, dated 16th September, 2023.

11. According to the applicant, no offence is made out against him, under the provisions of PMLA. Reproducing the allegations, which have been levelled against the applicant, it has been prayed that the entire case of the ED is based u