Neeraj Saluja Vs Union of India and another (Punjab and Haryana High Court)
Arrest by ED was legal as Arresting Officer had conveyed his intention, reasons, grounds and believe to arrest as per section 19 of PMLA Act
Conclusion: Since an Arresting Officer had conveyed his intention, reasons, grounds and believe to arrest assessee, the order of grounds of arrest was in conformity with the requirement of Section 19 of PMLA Act. Thus, there was no fault in the grounds of arrest and consequent arrest. Given the massive amount involved, the necessity of assessee’s arrest was primarily not because of his non-cooperation, not confessing to the guilt, but because of the magnitude of the money laundering of the mammoth proportions.
Held: In the instant case, an industrialist incarcerated on the allegations of illegally diverting Rs.1530.99 crores from the loan amount for a purpose other than it was sanctioned, and subsequently, the above-captioned complaint was registered under PMLA for proceeds of crime based on the predicate offense, instead of filing a bail petition under Section 439 CrPC/483 BNSS had come up before this under Section 482 CrPC for quashing of arrest order and subsequent remand orders being illegal and contrary to judicial precedents. Neeraj Saluja was accused of illegally diverting over Rs.1,530.99 crores from the loan amount for a purpose other than it was sanctioned. An FIR was filed against the industrialist Neeraj Saluja and his family members under Sections 120-B, 403, 420, 467, 468, 471 IPC and 13(2) read with 13(1) (d) of PC Act. On the basis of FIR, ECIR was lodged under 3 & 4 of the Prevention of Money Laundering Act, 2002. Assessee contended that assessee’s arrest was illegal as the same violated the mandate of Section 19 of PMLA and Constitutional safeguards under Art. 21 and 22 of the Constitution of India because the reasons to believe as mandated under the Act were admittedly not provided; the grounds of arrest were a mere reproduction of the CBI Challan; there was no satisfaction recorded regarding the necessity to arrest of assessee. The mandatory provisions of Section 19 of the 2002 Act had been violated, rendering assessee’s impugned arrest illegal and entitling him to release immediately. Assessee’s custody in this ECIR (around eight months) and the previous custody in CBI’s FIR of over six months was sufficient pre-trial incarceration, and the arrest of assessee was in stark violation of the law. Respondent contended that there was a statutory remedy before assessee to file a petition under Section 439 CrPC and now under Section 483 BNSS, as the case may be. Hence, resorting to an extraordinary remedy could not be exercised once the statute provided a specific remedy. On this preliminary objection alone, the petition deserveed to be dismissed. Moreover, it was one of the most extensive banking scams, and this Court should not release assessee by declaring his arrest illegal and considering the massive fraud. It was held that in compliance with the statutory mandate of S. 19 of PMLA, the arresting officer at the arrest stage had apprised assessee of his reasons of belief and the grounds that necessitated such an arrest. Consequently, the arrest conformed with the requirements of section 19 of the PMLA Act, 2002. A perusal of the memo outlining the grounds of arrest revealed that the safeguards under Section 19 were adhered to, validating the arrest, and there was no failure to entitle assessee to be released by exercising the extraordinary powers of the High Court under S. 482 CrPC, 1973. which was Rs.1580 crores, and there was ample evidence of his role, involvement, and strategy, which he deployed to siphon off the bank funds The language of Section 19 suggested discretion; however, once an arrest was effected, it must strictly adhere to the outlined statutory requirements. Failure to do so shifts the nature of the action from a permissible discretionary act to a violation of mandatory legal protocols. The concept of ‘reason to believe’ was not merely procedural but a substantive safeguard that underpins the legality of an arrest under the PMLA. It required a qualitative assessment of evidence before depriving an individual of liberty. A perusal of the above grounds of arrest clearly mentioned in detail the necessity which led to assessee’s arrest. One of the reasons which necessitated assessee’s arrest was the non-recovery of massive amount of proceeds of crime. The grounds of arrest were self-sufficient and need no other clarity from this Court.
