Introduction
Arvind Kejriwal, the former Chief Minister of Delhi, was accused of money laundering under the Prevention of Money Laundering Act (hereinafter as PMLA) and accordingly was arrested. He was under custody following his arrest. He challenged his arrest on the grounds that his arrest was arbitrary, against the law, and didn’t comply with the principles of criminal jurisprudence in India. He also argued that he was arrested on insufficient grounds. Accordingly, he challenged his order of arrest in the Supreme Court. And Supreme Court dealt with the issue.
The present article aims to present before the readers the nature and purpose of the Prevention of Money Laundering Act 2002, an overview of the case Arvind Kejriwal v. Enforcement Directorate, and also how different guidelines have been issued by the apex court to regulate the power of arrest in the country.
About the Prevention of Money Laundering Act
Money laundering is a kind of deceiving act wherein active steps are taken to legitimize the illegally obtained money. It may be done in various forms, like covering or layering the source of illegally obtained money or channeling illegal funds in the economy of the nation. To manage, regulate, and prohibit these activities, the Prevention of Money Laundering Act, 2002, was enacted with stringent provisions.
Since money laundering involves a direct disruption of the economy of the nation and gives rise to terrorism activities, the Prevention of Money Laundering Act contains strict provisions like reverse burden of proof, attachment, and confiscation of properties, and investigation is done by the Enforcement Directorate (ED), which doesn’t require prior sanction.
The procedural aspects are also covered under the Act itself relating to arrest, seizure, investogatio, and others. Only when the Act is silent over any particular subject are the provisions of the Code of Criminal Procedure, now Bhartiya Nyaya Suraksha Sanhita, 2024, applicable. Because it provides the general provisions for all the criminal acts in the country.
Facts of the case (Arvind Kejriwal v. Enforcement Directorate)
- In this case, Arvind Kejriwal was arrested under the Prevention of Money Laundering Act under Section 19 for his alleged involvement in money laundering in Delhi’s liquor policy. He was accused of framing and implementing the policy in such a way as to make personal profits for himself and the alleged illegal use of money.
- He challenged his arrest on the grounds that the arresting authorities didn’t comply with the proper provisions of the Act in effecting his arrest. He argued that to make a legal arrest under Section 19 of the Act, the following requirements have to be fulfilled:
- There must be material in possession.
- Reasons for arrest must be recorded in writing.
- The person must also be informed of his ground of arrest.
- However, in the instant case, these requirements were not followed. Therefore, he challenged his arrest. Subsequent to his arrest, he was taken on remand. He also challenged his remand order on the same ground that since his arrest was illegal, the subsequent order of remand was also illegal.
Arguments presented on behalf of Arvind Kejriwal
Arvind Kejriwal presented various arguments to challenge his order of arrest.
- Article 22 of the Constitution and the principles of criminal jurisprudence provide certain rights against the arbitrary and illegal arrest. Article 22 requires that the grounds of arrest must be communicated to the arrestee, and in the PMLA case, the material on which the arrest is made is also required to be presented.
- All the factors must be considered before arresting the accused. Exculpatory and inculpatory factors must be considered; however, in the present case only the inculpatory factors were considered.
- The grounds of arrest as mentioned under the Crpc under Section 41 are less stringent as compared to the PMLA Act. Here, Section 19 of the Act specifically uses the word “reason to believe.” Therefore, it means the arresting authorities must have valid, sufficient, and prima facie grounds to effect the arrest because of the presence of the words reason to believe.
- The Supreme Court has, at some occasions, in the fields of arrest raised the requirement of need and necessity of arrest. Since the prosecution has failed to prove the need and necessity of arrest, the arrest was illegal.
Arguments presented by the Enforcement Directorate
The following arguments were presented from the other side:
- Article 22 requires only the communication of grounds of arrest and not the material on which such grounds are formed.
- The power of arrest is not subject to judicial review and is outside the scrutiny of the courts. The Courts have itself, at various instances, clarified that investigation is the sole realm of the executive, and the judiciary doesn’t interfere.
- There was sufficient material on the basis of which arrest was made. Evidence taken or collected during the investigation clearly shows the involvement of Arvind Kejriwal in the alleged offense.
- Therefore, arrest was followed after complying with all the procedures.
Observations made by the Supreme Court and the final order
The Supreme Court, in deciding the case, referred to various provisions and earlier decisions and made the following observations.
- Firstly, when any arrest is made, the same is subject to judicial review. However, not on merits, but the legality of arrest may be adjudged.
- Secondly, Article 22 of the Constitution not only requires conveying the grounds of arrest but also the material on which such grounds are formed so as to enable the accused to determine the legality of the arrest and approach the courts in the case of illegal arrest. The Supreme Court also referred to the case of Pankaj Bansal v. Union of India (2013) to uphold that even in PMLA cases, the grounds of arrest must be communicated.
- Definitely, there must be strong reason to believe to order the arrest under Section 19 of the PMLA, and general guidelines relating to arrest as given in Arnesh Kumar v. State of Bihar (2014) must be followed.
- However, with respect to the argument that prosecution needs to show the need and necessity of arrest even in the PMLA cases, the Supreme Court didn’t make any comment and stated that the same must be decided by the larger bench and accordingly referred this question to the larger bench.
- Meanwhile, till that question is decided, release the former Delhi CM, Arvind Kejriwal, on bail.
And finally, bail was granted to him.
Conclusion
The case of Arvind Kejriwal v. Enforcement Directorate has made important observations with respect to the rights of arrested persons and the significance of Article 22 in the PMLA Act. The case is also significant to uphold the rights of the arrestee.
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