The court ruled that procedural non-compliance in arrest under PMLA does not obstruct bail denial when factors like severity of charges and risk of flight are significant.

JUDGMENT

Yogesh Khanna, J.(Through video conferencing) These petitions are for grant of bail to the applicant Bimal Jain (Bail Application No.112/2021) and Naresh Jain (Bail Application No.122/2021).

2. On 01.07.2017, an enquiry under FEMA, 2019 was commenced by the respondent and searches were carried out at various places against accused Naresh Jain and others. It is alleged petitioners and others had appeared on numerous occasions before the Enforcement Directorate and the enquiry was conducted for two years under Section 47 of the FEMA.

3. On 13.09.2018, the Enforcement Directorate got registered FIR No.179/2018 with the EOW Cell for Scheduled Offences under the Prevention of the Money Laundering Act, 2002 (hereinafter referred as PMLA) i.e. Sections 419 /420/467/468/471/476/120B IPC..Thereafter, instant ECIR No.05/HIU/2018 was recorded by the Enforcement Directorate and petitioners appeared before the Enforcement Directorate from November 2018 on several occasions. It is alleged the petitioner Naresh Jain appeared at least 25 times, however, on 01.09.2020 he was arrested under Section 19 PMLA. Searches were conducted by the Enforcement Directorate on 23.10.2020 under PMLA at the residential premises of the petitioner Bimal Jain also.

4. On 28.10.2020, the prosecution complaint was filed before the learned Special Judge, PMLA against eight accused persons, including the petitioners herein. Petitioner Bimal Kumar Jain also joined the investigation of FEMA as also PMLA on various occasions. However, on 02.11.2020, an application was filed by the Assistant Director of Enforcement Directorate claiming inter alia Bimal Jain had not deliberately received the summons and prayer was made for issuance of NBWs. Such NBWs were issued on 02.11.2020. In the meanwhile, one of the co-accused Puneet Jain approached this Court by way of CRL.M.C. 2283/2020 and NBWs were set aside against Puneet Jain by this Court. On the basis of the order dated 23.11.2020 of this Court, on 27.11.2020 in Crl.M.C.No.2283/2020 Bimal Jain moved an application for cancellation of NBWs, but during the pendency of this application, Bimal Jain was arrested on 30.11.2020, so he remained in judicial custody.

5. Petitioner Bimal Jain then moved an application for bail but it was rejected on the ground he did not co-operate with the Investigating Officer; furnished fake addresses; and also on gravity of the offence.

6. The arguments of the learned senior counsel for the petitioner is three folds a) while arresting Bimal Jain, procedure under Section 19 PMLA was not followed; b) the Enforcement Directorate cannot be the complainant and the Investigating Officer at the same time; and c) effect of declaration of twin conditions under Section 45 of the PMLA have been declared unconstitutional and ultra virus in view of decision in Nikesh Tarachand Shah vs. Union of India and Anr., (2018) 11 SCC 1.

7. It is argued by the learned senior counsel for the petitioner Bimal Jain, per Section 19 (1) PMLA the Investigating Officer must have the material in his possession; and he has reasons to believe (the reasons for such belief to be recorded in writing); that such person is guilty of offence under the Act; and after arrest of such person under sub section (1), he has to forward the copy of order along with material in his possession to the adjudicating authority in a sealed envelope. The rules qua form and the manner of forwarding the copy of the arrest order of the person along with material to the adjudicating authority were also quoted viz Rule 2, 3, 6, Form III under Rule 6 of the PMLA.

8. It was argued it is obliga