Compliance with procedural requirements of arrest and remand under the Prevention of Money Laundering Act is essential; mere non-cooperation does not justify arrest.

JUDGMENT

SWARANA KANTA SHARMA, J.(ORAL)

1. The instant petition under Section 4 82 of the Code of Criminal Procedure, 1973 (‘Cr.P.C.’) has been filed on behalf of petitioner seeking setting aside of impugned remand order dated 10.10.2023, passed by learned Additional Sessions Judge-05, Patiala House Court, New Delhi (‘Sessions Court’) in case titled „Directorate of Enforcement vs. Nitin Garg & Ors.‟ in ECIR bearing no. ECIR/STF/02/2022 for Signature Not Verified CRL.M.C.7488/2023 Page 1 of 14 Digitally Signed offence punishable under Section 3 & 4 of the Prevention of Money Laundering Act, 2002 (‘PMLA’), and for directing the release of petitioner.

2. In the present case, an FIR bearing no. 807/2021 was registered on 05.12.2021 at Police Station Kalkaji, New Delhi under Sections 417/420/120B of Indian Penal Code, 1860 (‘IPC’) and another FIR bearing no. 190/2021 was registered under Sections 417/420/468/471/120B of IPC, against one M/s. Grand Prospect International Communication Pvt. Ltd. (‘GPICPL’) on the basis of a complaint lodged by the Ministry of Corporate Affairs (‘MCA’).

3. In brief, the allegations in the said FIR are that certain Chinese shareholders of GPICPL had used forged identification documents and falsified addresses, while projecting itself to be a subsidiary company of Vivo, China. It is alleged that the company GPICPL had been incorporated by Zhengshen Ou and Zhang Jie, both Chinese nationals, with the help of one Chartered Accountant namely Nitin Garg who had facilitated the incorporation of the company by witnessing their signatures and their documents. During enquiry conducted by MCA, it was found that the said company had been incorporated to conduct fraudulent businesses. It is also alleged that the certifying professionals who had certified and filed e-forms knew that the same contained false information and false documents about the directors namely Zhengshen Ou and Zhang Jie. During inquiry, it was found that Zhengshen Ou and Zhang Jie were the shareholders of company, Zhengshen Ou and Bin Luo were directors of the company at the time of incorporation, Vivek Kumar is an ex director of company, Zhengshen Ou, Zhang Jie and Signature Not Verified CRL.M.C.7488/2023 Page 2 of 14 Digitally Signed Hong Cheng Yu are the present directors of company and the Director Identification Number (‘DIN’) of all the three present directors have been deactivated due to non-filing of KYC form with MCA. It is alleged that Director and shareholder Zhang Jie had used a false driving license for applying DIN, for giving his address at Shillong, Meghalaya and further that he had again used the false driving license for opening bank account with HDFC Bank. It is also alleged that the said company is not reported to be subsidiary of Vivo in official records, whereas the company publicly projects itself to be a subsidiary of Vivo. Since the offences under sections 120B/417/420/471 of IPC are scheduled offences under Part A of PMLA, a prima facie case for commission of offence of money laundering under Section 3 of PMLA, punishable under Section 4 of PMLA, was alleged to have been made out against the accused persons and an ECIR i.e. ECIR/STF/02/2022 dated 03.02.2022 was recorded and the case was taken up for investigation under the provisions of PMLA.

4. The present petitioner was arrested by the respondent i.e. Directorate of Enforcement on 10.10.2023 and produced before the learned Sessions Court and the Directorate of Enforcement had sought 10 days custody of the petitioner alongwith other arrested individuals. Vide impugned order dated 10.10.2023, the learned Sessions Court had remanded the present petitioner to custo