An arrest under special anti-money laundering legislation requires the investigating officer to possess tangible material establishing a prima facie case. The 'reasons to believe' must be based on objective facts, and failure to consider exculpatory material or the absence of sufficient evidence renders the arrest illegal.

PER, SHREE CHANDRASHEKHAR, CJ.:

The challenge laid in this writ petition is to the arrest of the petitioner on 13th August 2025 on the ground that it was an illegal and arbitrary exercise of powers by the Arresting Officer, who by arresting the petitioner on 13th August 2025 infringed the petitioner’s fundamental rights under Articles 14, 19, 21 and 22(1) and (2) of the Constitution of India. Closely related to this challenge, a further challenge has been made to the remand orders dated 14th August 2025 and 20th August 2025 passed by the Additional Sessions Judge, Designated Special Court under the Prevention of Money-Laundering Act, 2002 (in short, PMLA), City Civil and Sessions Court, Mumbai in ECIR No. ECIR/MBZO-II/10/2025.

2. This is the case of the Enforcement Directorate (in short, ED) that illegal constructions were raised and 41 buildings were constructed during 2008 to 2010 by the accused builders and developers in connivance with the officers of the City and Industrial Development Corporation of Maharashtra (in short, CIDCO) and, in connection therewith, a First Information Report (in short, FIR) was lodged on 26th November 2019 vide FIR No.1348 of 2019 at the instance of the Assistant Commissioner, Ward Committee-D, Achole, Vasai Virar City Municipal Corporation (in short, VVCMC). Then three other FIRs vide FIR No.195 of 2022 on 26th April 2022, FIR No. 196 of 2022 on 27th April 2022 and FIR No. 69 of 2022 on 2nd February 2023 were lodged. Based on these FIRs, the ED registered ECIR No. ECIR/MBZO-II/10/2025 and an investigation thereto commenced. The case set up by the ED is that several incriminating materials including huge cash, ornaments etc. were collected from the premises of Mr. Y. S. Reddy in course of the investigation and such information was shared with the authorities. On the basis of that information, the FIR vide FIR No. 0330 of 2025 was registered at Achole Police Station on 1st August 2025 which has merged into the earlier four FIRs, and now the complicity of the petitioner in the crime has been unearthed. The case pleaded by the petitioner is that the development plan for Vasai Virar was sanctioned by the CIDCO and 41 buildings were constructed during 2008-2010. On 7th July 2010, the VVCMC came into existence and the planning functions of CIDCO were handed over to the VVCMC. The petitioner tendered joining as the Municipal Commissioner at the VVCMC on 13th January 2022 and, according to him, he played an active role in following up and pursuing the complaints against illegal construction in the VVCMC. In the meantime, Civil Writ Petition No. 15853 of 2022 was filed in the High Court by the land owners and the illegal constructions were razed by virtue of an order passed in the said proceedings. The petitioner had no role to play in granting sanction for the development plans and the said illegal constructions of 41 buildings in 2008-2010, as he was not there at that time. The learned senior counsel for the petitioner submitted that the petitioner was instrumental in issuing notices for vacating illegally constructed 41 buildings, he got 850 complaints filed against illegal constructions, supervised demolition of over 550 lakhs sq.ft. of illegal constructions, registered 206 criminal offences against the developers, builders and others, 1400 notices were issued under the provisions of the Maharashtra Regional and Town Planning Act, 1966 and three Assistant Municipal Commissioners and six Junior Engineers were suspended or terminated from service for not taking prompt action against illegal constructions. T