Supreme Court: In a petition filed Tamil Nadu Electricity Minister Senthil Balaji and his wife, challenging the Madras High Court’s judgment, wherein the Court held that the Directorate of Enforcement (‘ED’) was entitled to take Senthil Balaji into police custody, the division bench of AS Bopanna and MM Sundresh*, JJ. has dismissed the said plea challenging ED custody in the money laundering case and allowed ED to have his custody till 12-08-2023 in connection with the cash-for-jobs scam.
The Court held the following:
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When an arrestee is forwarded to the jurisdictional Magistrate under Section 19(3) PMLA, 2002 no writ of Habeus Corpus would lie. Any plea of illegal arrest is to be made before such Magistrate, since custody becomes judicial. Thus, a writ of Habeas Corpus is not maintainable as the arrest and custody have already been upheld by way of rejection of the bail application.
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Any non-compliance of the mandate of Section 19 of the PMLA, 2002 would enure to the benefit of the person arrested. For such noncompliance, the Competent Court shall have the power to initiate action under Section 62 of the PMLA, 2002.
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An order of remand has to be challenged only before a higher forum as provided under the CrPC, 1973 when it depicts a due application of mind both on merit and compliance of Section 167(2) of the CrPC, 1973 read with Section 19 of the PMLA 2002.
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Section 41-A of the CrPC, 1973 has got no application to an arrest made under the PMLA 2002.
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The maximum period of 15 days of police custody is meant to be applied to the entire period of investigation, 60 or 90 days, as a whole. The Court directed the Registry to place the matter before the Chief Justice of India for appropriate orders to decide the larger issue of the actual import of Section 167(2) CrPC, 1973 as to whether the 15 days period of custody in favour of the police should be only within the first 15 days of remand or spanning over the entire period of investigation 60 or 90 days, as the case may be, as a whole.
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The words “such custody” occurring in Section 167(2) of the CrPC, 1973 would include not only police custody but also that of other investigating agencies.
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The word “custody” under Section 167(2) of the CrPC, 1973 shall mean actual custody.
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Curtailment of 15 days of police custody by any extraneous circumstances, act of God, an order of Court not being the handy work of investigating agency would not act as a restriction.
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Section 167 of the CrPC, 1973 is a bridge between liberty and investigation performing a fine balancing act.
Background
A case was registered in the Enforcement Case Information Report by the State against V Senthil Balaji in connection with the cash-for-jobs scam. It was followed by a summons requiring his attendance. A search was conducted by the Authorised Officer invoking Section 17 of the Prevention of Money Laundering Act, 2002 at Senthil Balaji premises on 13-06-2023. Finding that Senthil Balaji was not extending adequate cooperation, the Authority had invoked Section 19 of the PMLA, 2002 by way of an arrest on 14-06-2023. An arrest memo was also prepared. Though grounds of arrest were furnished, Senthil Balaji declined to acknowledge them. The information pertaining to the arrest was also intimated to his brother, sister-in-law and wife.
Senthil Balaji was taken to the Tamil Nadu Government Multi Super Speciality Hospital, as he complained of chest pain. His wife rushed to the High Court and filed a Habeas Corpus petition on the very same day. In the meanwhile, the State filed an application before the Principal Sessions Judge seeking judicial custody for 15 days. An order of remand was passed sending him to judicial custody till 28-06-2023. Thereafter, Senthil Balaji filed an application for bail which was dismissed. Further, the State filed an application seeking custody for further investigation. and was granted custody for a period of 8 days. In the meanwhile, in the pending Habeas Corpus petition additional grounds were raised questioning the orders of the Principal Sessions Judge granting both judicial and police remand. Further, the State filed an application to exclude the period of hospitalisation for the purpose of counting custody period as no actual custody was taken.
Thereafter, the division bench of J Nisha Banu and Justice Bharatha Chakravarthy, JJ. delivered a split verdict in the habeas corpus plea filed by wife of V Senthil Balaji, Minister for Electricity, Prohibition & Excise, Tamil Nadu against his arrest by the Directorate of Enforcement (‘ED’) for money laundering in cash for job scam case. Further, placed the matter before the Chief Justice for further orders.
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The Madras High Court in its tie breaker judgment held that ED has the power to seek custody of a person arrested. Further, the Court excluded the time spent by Senthil Balaji in the Hospital from the initial 15 days’ time for grant of custody to ED. It was also held that the habeas corpus petition would be maintainable in exceptional circumstances, but this case does not attract any exceptional circumstance and consequently since an order of remand had been passed by a Court of competent jurisdiction, the relief sought in the petition cannot be granted.
Also read: Explained| Madras High Court tie breaker verdict in Senthil Balaji habeas corpus petition
Analysis
The Court said that a writ of Habeas Corpus shall only be issued when the detention is illegal. As a matter of rule, an order of remand by a judicial officer, culminating into a judicial function cannot be challenged by way of a writ of Habeas Corpus, while it is open to the person aggrieved to seek other statutory remedies. When there is a non-compliance of the mandatory provisions along with a total non-application of mind, there may be a case for entertaining a writ of Habeas Corpus and that too by way of a challenge.
As per the Court in a case where the mandate of Section 167 of the Code of Criminal Procedure, 1973 (‘CrPC’), and Section 19 of the PMLA, 2002 are totally ignored by a cryptic order, a writ of Habeas Corpus may be entertained, provided a challenge is specifically made. However, an order passed by a Magistrate giving reasons for a remand can only be tested in the manner provided under the statute and not by invoking Article 226 of the Constitution of India. There is a difference between detention becoming illegal for not following the statutory mandate and wrong or inadequate reasons provided in a judicial order. A challenge to an order of remand on merit has to be made in tune with the statute, while noncompliance of a provision may entitle a party to invoke the extraordinary jurisdiction. Thus, in an arrest under Section 19 of the PMLA, 2002 a writ would lie only when a person is not produced before the Court as mandated under subsection (3), since it becomes a judicial custody thereafter and the Court would be in a better position to consider due compliance.
Further, while interpreting Section 41-A CrPC, the Court said that this provision cannot be termed as a supplement to Section 19 PMLA, 2002. The PMLA, 2002 being a sui generis legislation, has its own mechanism in dealing with arrest in the light of its objectives. The concern of the PMLA is to prevent money laundering, make adequate recovery and punish the offender. That is the reason why a comprehensive procedure for summons, searches, and seizures etc., has been clearly stipulated under Chapter V of the PMLA, 2002. An arrest shall only be made after due compliance of the relevant provisions including Section 19 PMLA. Therefore, there is no need to follow and adopt Section 41-A CrPC, especially in the teeth of Section 65 PMLA, 2002.
The Bench said that in the absence of any mandate, one cannot force the Authorized Officer to ensure due compliance of Section 41-A CrPC, especially when a clear, different and distinct methodology is available under the PMLA, 2002. Following Section 41-A CrPC, 1973 for an arrest under the PMLA would only defeat and destroy the very inquiry/investigation under the PMLA. Till summons are issued to a person, he is not expected to be in the know-how. Any prior intimation, other than what is mandated under the PMLA, 1973 might seriously impair the ongoing investigation.
The Court took note of relevant provisions of Prevention of Money Laundering Act and said that the Legislature in its wisdom has consciously created the necessary safeguards for an arrestee, keeping in mind his liberty, and the need for an external approval and supervision. This provision is in compliance with Article 21 and 22(2) of the Constitution of India.
Further, the Court said that Section 62 is a reiteration of the mandatory compliance of Section 19 of the PMLA, 2002. It is a warning to an officer concerned to strictly comply with the mandate of Section 19 of the PMLA, 2002 in letter and spirit, failing which he would be visited with the consequences. It is his bounden duty to record the reasons for his belief in coming to the conclusion that a person has been guilty and therefore, to be arrested. Such a safeguard is meant to facilitate an element of fairness and accountability.
The Court noted that Section 65 provides for the application of the CrPC with respect to arrest, search and seizure, etc., and said that the provisions of CrPC are expected to be supplementary to the provisions of the PMLA, 2002. Further Section 4 CrPC amplifies the fact that any inquiry or investigation, along with their process, over an offence should necessarily be only under that statute and not under the CrPC. The aforesaid position has been reiterated under Section 5 CrPC, ,whereby a distinct clarification has been given that the CrPC will not stand in the way of the operation of special law.
Thus, a conjoint reading of Section 65 of the PMLA, 2002 along with Sections 4 and 5 of the CrPC, 1973 states that PMLA has precedence over CrPC, when it comes to investigation.
The Court noted that under proviso (a) of Section 167(2) of the CrPC, a Magistrate may authorize the detention beyond a period of 15 days, other than in the custody of the police. This period of 15 days has to be reckoned, qua either a police custody or a custody in favour of the investigating officer, spanning over the entire period of investigation. The Bench said that a proviso has to be understood from the language used in the main provision and not vice versa., Thus, the period of 15 days being the maximum period that can be granted in favour of the police would span from time to time with the total period of 60 or 90 days. Any other interpretation would seriously impair the power of investigation. It is to protect the interest of an accused person by restricting the period of investigation, a failure of which would entitle an arrestee to be released. This again is yet another facet of Article 21 of the Constitution of India.
After taking note of Section 167(3) CrPC, 1973 that warrants a Magistrate to record reasons by speaking, reasoned order while granting authorisation, said that in a judicial order, touching upon the rights of an accused, adequate reasons are expected to be recorded. Any such order passed is amenable to challenge before the higher judicial forum, though not by way of a Habeas Corpus petition.
Thus, the Bench held that the word “such custody” under 167(2) CrPC would include not only police but other such custody. Further, it held that the habeas corpus petition was not maintainable, as the order of remand cannot be challenged in a habeas corpus petition. The Bench also rejected their plea that the ED’s arrest was illegal.
The Court further said that in case of any violation of the procedure for arrest prescribed in Section 19 of the Prevention of Money Laundering Act, 2002 (‘PMLA’), then action can be taken against the officer concerned in terms of Section 62 PMLA.
The Bench referred the judgment in CBI v. Anupam J. Kulkarni, (1992) 3 SCC 141, wherein it was held that police custody is not permissible beyond the first 15 days of remand, to a larger bench for reconsideration.
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[V. Senthil Balaji v State, 2023 SCC OnLine SC 934, decided on 07-08-2023]
Judgment Authored by: Justice MM Sundresh
Know Thy Judge | Supreme Court of India: Justice M.M. Sundresh
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