# Arvind Kejriwal v. Directorate of Enforcement

- **Citation:** 2024 INSC 512
- **Court:** Supreme Court of India
- **Decided:** 2024-07-12
- **Case number:** Criminal Appeal No. 2493 of 2024
- **Bench:** Sanjiv Khanna, Dipankar Datta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/arvind-kejriwal-v-directorate-of-enforcement-37895
- **Pages:** 64

## Headnote

Validity of arrest of the appellant under Section 19 of the Prevention
of Money Laundering Act, 2002; scope and ambit of the Courts to
examine the legality of the arrest under Section 19; whether the
Court while examining the validity of arrest in terms of Section 19(1)
of the PML Act will also go into and examine the necessity and
need to arrest; whether interim bail ought to be granted to the
appellant.
Headnotes†
Prevention of Money Laundering Act, 2002 - s.19(1) -
"need and necessity to arrest", if a separate ground to be
considered beyond the conditions stipulated in s.19(1) -
Appellant challenged his arrest by ED in the Excise Policy
case wherein he was described as the key conspirator in
formulation of the said policy framed for the sale of liquor
in NCT of Delhi, which allegedly favoured certain persons
in exchange for kickbacks from liquor businessmen and
resulted in huge losses to the government exchequer - It
was further inter alia alleged that the appellant was involved
in the use of proceeds of crime generated in the Goa election
campaign of Aam Aadmi Party - Arrest was challenged as
illegal contending that he was arrested in violation of s.19(1),
the "reasons to believe" did not mention and record reasons
for "necessity to arrest" and there was no necessity to arrest
the appellant on 21.03.2024 as the RC (by CBI)/ECIR (by ED)
were registered in August 2022 and also most of the material
relied upon in the "reasons to believe" were prior to July 2023 -
Whether mere satisfaction of the formal parameters to arrest
sufficient or is the satisfaction of necessity and need to arrest,
beyond mere formal parameters required:
* Author
2364
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Held: Such review might be conflated with stipulations in s.41 of
the Code of Criminal Procedure, 1973 which lays down certain
conditions for the police to arrest without warrant - However,
s.19(1) does not permit arrest only to conduct investigation -
Conditions of s.19(1) have to be satisfied - Clauses (a), (c), (d)
and (e) to s.41(1)(ii) of the CrPC, apart from other considerations,
may be relevant - Vijay Madanlal Choudhary, a three Judge Bench
decision states that the safeguards provided as pre-conditions in
s.19(1) of the PML Act have to be fulfilled by the designated officer
before affecting arrest - The safeguards are of a higher standard
and ensure that the designated officer does not act arbitrarily, and
is made accountable for their judgment about the 'necessity to
arrest' the person alleged to be involved in the offence of money
laundering, at the stage before the complaint is filed - "necessity
to arrest" is not mentioned in s.19(1) however, it has been
judicially recognised in Arnesh Kumar laying down that "necessity
to arrest" must be considered by an officer before arresting
a person - Power to arrest must be exercised cautiously to
prevent severe repercussions on the life and liberty of individuals
and such power must be restricted to necessary instances and
must not be exercised routinely - Right to life and liberty is
sacrosanct, and the appellant has suffered incarceration of over
90 days and as the questions of law inter alia as regards whether the
"need and necessity to arrest" is a separate ground to challenge
the arrest u/s.19(1) of the PML Act is referred to larger Bench,
the appellant is granted interim bail in the ECIR recorded by
respondent-ED, on the conditions as imposed, which may be
extended/recalled by the larger Bench. [Paras 18, 67, 74, 84, 85]
Prevention of Money Laundering Act, 2002 - s.19(1) - Validity
of arrest - "Need and necessity to arrest" - Parameters to
be considered - Questions of law referred to larger Bench:
Held: Questions as regards whether the"need and necessity
to arrest" is a separate ground to be considered beyond the
conditions stipulated in s.19(1); whether it refers to the satisfaction
of formal parameters to arrest and take a person into custody,
or it relates to other personal grounds

## Text

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[2024] 7 S.C.R. 2363 : 2024 INSC 512
Arvind Kejriwal
v.
Directorate of Enforcement
(Criminal Appeal No. 2493 of 2024)
12 July 2024
[Sanjiv Khanna* and Dipankar Datta, JJ.]
Issue for Consideration
Validity of arrest of the appellant under Section 19 of the Prevention
of Money Laundering Act, 2002; scope and ambit of the Courts to
examine the legality of the arrest under Section 19; whether the
Court while examining the validity of arrest in terms of Section 19(1)
of the PML Act will also go into and examine the necessity and
need to arrest; whether interim bail ought to be granted to the
appellant.
Headnotes†
Prevention of Money Laundering Act, 2002 - s.19(1) -
"need and necessity to arrest", if a separate ground to be
considered beyond the conditions stipulated in s.19(1) -
Appellant challenged his arrest by ED in the Excise Policy
case wherein he was described as the key conspirator in
formulation of the said policy framed for the sale of liquor
in NCT of Delhi, which allegedly favoured certain persons
in exchange for kickbacks from liquor businessmen and
resulted in huge losses to the government exchequer - It
was further inter alia alleged that the appellant was involved
in the use of proceeds of crime generated in the Goa election
campaign of Aam Aadmi Party - Arrest was challenged as
illegal contending that he was arrested in violation of s.19(1),
the "reasons to believe" did not mention and record reasons
for "necessity to arrest" and there was no necessity to arrest
the appellant on 21.03.2024 as the RC (by CBI)/ECIR (by ED)
were registered in August 2022 and also most of the material
relied upon in the "reasons to believe" were prior to July 2023 -
Whether mere satisfaction of the formal parameters to arrest
sufficient or is the satisfaction of necessity and need to arrest,
beyond mere formal parameters required:
* Author
2364
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Held: Such review might be conflated with stipulations in s.41 of
the Code of Criminal Procedure, 1973 which lays down certain
conditions for the police to arrest without warrant - However,
s.19(1) does not permit arrest only to conduct investigation -
Conditions of s.19(1) have to be satisfied - Clauses (a), (c), (d)
and (e) to s.41(1)(ii) of the CrPC, apart from other considerations,
may be relevant - Vijay Madanlal Choudhary, a three Judge Bench
decision states that the safeguards provided as pre-conditions in
s.19(1) of the PML Act have to be fulfilled by the designated officer
before affecting arrest - The safeguards are of a higher standard
and ensure that the designated officer does not act arbitrarily, and
is made accountable for their judgment about the 'necessity to
arrest' the person alleged to be involved in the offence of money
laundering, at the stage before the complaint is filed - "necessity
to arrest" is not mentioned in s.19(1) however, it has been
judicially recognised in Arnesh Kumar laying down that "necessity
to arrest" must be considered by an officer before arresting
a person - Power to arrest must be exercised cautiously to
prevent severe repercussions on the life and liberty of individuals
and such power must be restricted to necessary instances and
must not be exercised routinely - Right to life and liberty is
sacrosanct, and the appellant has suffered incarceration of over
90 days and as the questions of law inter alia as regards whether the
"need and necessity to arrest" is a separate ground to challenge
the arrest u/s.19(1) of the PML Act is referred to larger Bench,
the appellant is granted interim bail in the ECIR recorded by
respondent-ED, on the conditions as imposed, which may be
extended/recalled by the larger Bench. [Paras 18, 67, 74, 84, 85]
Prevention of Money Laundering Act, 2002 - s.19(1) - Validity
of arrest - "Need and necessity to arrest" - Parameters to
be considered - Questions of law referred to larger Bench:
Held: Questions as regards whether the"need and necessity
to arrest" is a separate ground to be considered beyond the
conditions stipulated in s.19(1); whether it refers to the satisfaction
of formal parameters to arrest and take a person into custody,
or it relates to other personal grounds and reasons regarding
necessity to arrest a person; and if questions (a) and (b) are
affirmatively answered, what are the parameters and facts to be
taken into consideration while examining the question of "need
and necessity to arrest". [Para 85]
[2024] 7 S.C.R.
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Arvind Kejriwal v. Directorate of Enforcement
Prevention of Money Laundering Act, 2002 - s.19(1) -
Preconditions to arrest under - Power to arrest - Judicial
review - Plea of the respondent-Directorate of Enforcement
that there should not be judicial scrutiny of the power to arrest
as it will interfere with the investigation:
Held: Rejected - The exercise of the power to arrest is not exempt
from the scrutiny of courts - A decision-making error u/s.19(1)
can lead to the arrest and deprivation of liberty of the arrestee -
Courts have the power of judicial review and must examine that
the exercise of the power to arrest meets the statutory conditions -
The legislature imposed strict conditions as preconditions to arrest
and was aware that the arrest may be before or prior to initiation
of the criminal proceedings/prosecution complaint and did not
exclude the examination of the said preconditions being satisfied
in a particular case - This flows from the mandate of s.19(3)
which requires that the arrestee must be produced within 24 hours
and taken to the Special Court, or court of judicial/metropolitan
magistrate having jurisdiction - The power of judicial review
remains both before and after the filing of criminal proceedings/
prosecution complaint. [Paras 21, 61]
Prevention of Money Laundering Act, 2002 - s.19(1) - Penal
Code, 1860 - s.26 - "reasons to believe" - Rights of the
accused - Whether the arrestee is entitled to be supplied with
a copy of the "reasons to believe":
Held: Yes - Providing the written "grounds of arrest", though a
must, does not in itself satisfy the compliance requirement - The
authorized officer's genuine belief and reasoning based on the
evidence that establishes the arrestee's guilt is also the legal
necessity - As the "reasons to believe" are accorded by the
authorised officer, the onus to establish satisfaction of the said
condition will be on the ED and not on the arrestee - s.26 defines
the expression "reason to believe" as sufficient cause to believe a
thing and not otherwise - "reasons to believe" are the reasons for
the formation of the belief which must have a rational connection
with or an element bearing on the formation of belief - The reason
should not be extraneous or irrelevant for the purpose of the
provision - Existence and validity of the "reasons to believe" goes
to the root of the power to arrest - The subjective opinion of the
arresting officer must be founded and based upon fair and objective
consideration of the material available on the date of arrest - On
the reading of the "reasons to believe" the court must form the
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'secondary opinion' on the validity of the exercise undertaken for
compliance of s.19(1) when the arrest was made - The "reasons
to believe" that the person is guilty of an offence under the PML
Act should be founded on the material in the form of documents
and oral statements - Accused is entitled to challenge his arrest
u/s.19(1) - Not furnishing a copy of the "reasons to believe" would
prevent the accused from challenging their arrest, questioning the
"reasons to believe", violating the personal liberty - The "reasons
to believe" should be furnished to the arrestee to enable him to
exercise his right to challenge the validity of arrest - However, in
a one-off case, ED may claim redaction and exclusion of specific
particulars and details however, the onus to justify redaction would
be on the ED - This requires consideration and decision by the
court and ED is not the sole judge. [Paras 28, 29, 33, 34, 36, 37]
Prevention of Money Laundering Act, 2002 - s.19(1) - Legality
of arrest - Judicial review - Scope and ambit:
Held: Judicial review of arrest u/s.19(1) which is based on the
opinion of the designated/authorised officer who records in
writing, their "reasons to believe" that the arrestee is 'guilty' of an
offence under the PML Act, is not merit based review - Judicial
review does not amount to a mini-trial or a merit review - The
exercise is confined to ascertain whether the "reasons to believe"
are based upon material which 'establish' that the arrestee is
guilty of an offence under the PML Act and to ensure that the
ED acted in accordance with the law - The courts scrutinize
the validity of the arrest in exercise of power of judicial review -
In-depth judicial scrutiny is required when the reasons recorded
by the authority are not clear and lucid - Arrest is to be made on
the basis of the valid "reasons to believe", meeting the parameters
prescribed by the law. [Paras 39, 44]
Prevention of Money Laundering Act, 2002 - s.19(1) - "reasons
to believe" - Chats retrieved after the arrest of the appellant,
not mentioned in the "reasons to believe" were referred in the
additional note of ED - Examination of validity of the arrest
of the appellant u/s.19(1) on basis thereof:
Held: Chats being retrieved after the arrest of the appellant and not
being mentioned in the "reasons to believe" cannot be examined
to determine the validity of the arrest in terms of s.19(1) - The
legality of the "reasons to believe" have to be examined based
on what is mentioned and recorded therein and the material on
[2024] 7 S.C.R.
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Arvind Kejriwal v. Directorate of Enforcement
record - However, the officer acting u/s.19(1) cannot ignore or
not consider the material which exonerates the arrestee - An
officer cannot be allowed to selectively pick and choose material
implicating the person to be arrested - The power to arrest u/s.19(1)
cannot be exercised as per the whims and fancies of the officer -
The opinion of the officer is subjective, but formation of opinion
should be in accordance with the law. [Paras 54-56]
Prevention of Money Laundering Act, 2002 - s.19(1) - Code
of Criminal Procedure, 1973 - s.41 - Distinction:
Held: Arrest u/s.41 can be made on the grounds mentioned in
clauses (a) to (i) of s.41(1) which include a reasonable complaint,
credible information or reasonable suspicion that a person has
committed an offence, or the arrest is necessary for proper
investigation of the offence, etc. - Grounds mentioned in s.41 are
different from the juridical preconditions for exercise of power of
arrest u/s.19(1) of the PML Act - s.19(1) conditions are more rigid
and restrictive and the two provisions cannot be equated. [Para 40]
Prevention of Money Laundering Act, 2002 - s.19(1) -
"reasons to believe" - Power of judicial review to set aside
the "reasons to believe" is limited - Contents of the "reasons
to believe" records the subjective satisfaction that the
appellant is guilty inter alia stating the role of the appellant
as the kingpin in formulation of the policy; his involvement
in the use of proceeds of crime generated in the Goa election
campaign of Aam Aadmi Party; being guilty as an individual
as a part of the conspiracy in the formulation of the excise
policy, and, also vicariously as the in-charge of AAP; and not
cooperating with the investigation despite nine summons being
issued to him - "reasons to believe" also referred to the
"material" to show appellant's involvement in the offence of
money laundering - However, the appellant contended that
the "reasons to believe" did not mention and evaluate "all"
or "entire" material and selectively referred to "incriminating"
material and ignored the exculpatory material:
Held: Though the arguments raised on behalf of the appellant as
against the "reasons to believe", are worthy of consideration, but
are in the nature of propositions or deductions - The power of
judicial review to set aside and quash the "reasons to believe" is
limited and accepting the arguments raised would be equivalent
to undertaking a merits review. [Para 65]
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Prevention of Money Laundering Act, 2002 - Policy on arrest by
ED - Lack of uniformity, consistency - Data on the website of
ED as regards the number of ECIRs recorded and the arrests
made, raise questions as regards the policy on arrest by ED
as to when a person involved in offences committed under
the PML Act should be arrested:
Held: ED should act uniformly, consistent in conduct, confirming
one rule for all. [Para 79]
Prevention of Money Laundering Act, 2002 - Fundamental
rights - Right to life and liberty - Review - Principle of
proportionality test, discussed.
Prevention of Money Laundering Act, 2002 - ss.19, 45 -
Distinction between.
Prevention of Money Laundering Act, 2002 - s.45 - Right to
bail under, if dependant on the stage of the proceedings:
Held: No - The power of the court u/s.45 is unrestricted with
reference to the stage of the proceedings - s.45 does not stipulate
the stage when the accused may move an application for bail
and it can be submitted at any stage, either before or after the
complaint is filed - It is immaterial whether the charge is framed or
evidence is recorded or not recorded - All material and evidence
that can be led in the trial and admissible, whether relied on by
the prosecution or not, and can be examined - On the question
of burden of proof, s.24 of the PML Act can be relied on by the
prosecution. [Para 46]
Word and Phrases - "material", "reason to believe", and
"guilty of the offence" - Interpretation.
Word and Phrases - "reasons to believe" and "suspicion" -
Discussed.
Case Law Cited
Dukhishyam Benupani, Asst. Director, Enforcement Directorate
(FERA) v. Arun Kumar Bajoria [1997] Supp. 5 SCR 566 : (1998) 1
SCC 52; State of Bihar and another v. J.A.C. Saldanha and others
[1980] 2 SCR 16 : (1980) 1 SCC 554; M.C. Abraham and another
v. State of Maharashtra and others [2002] Supp. 5 SCR 677 :
(2003) 2 SCC 649 - held inapplicable.
[2024] 7 S.C.R.
2369
Arvind Kejriwal v. Directorate of Enforcement
The King Emperor v. Khawaja Nazir Ahmad AIR 1945 PC 18 -
held inapplicable.
Vijay Madanlal Choudhary and others v. Union of India and others
[2022] 6 SCR 382 : (2022) SCC OnLine SC 929; Pankaj Bansal
v. Union of India and others [2023] 12 SCR 714 : 2023 SCC
Online SC 1244; V. Senthil Balaji v. State and others [2023] 12
SCR 853 : (2024) 3 SCC 51; Prabir Purkayastha v. State (NCT
of Delhi) (2024) SCC OnLine SC 934; Union of India v. Padam
Narain Aggarwal and others [2008] 14 SCR 179 : (2008) 13 SCC
305; Dr. Partap Singh and Another v. Director of Enforcement,
Foreign Exchange Regulation Act and others [1985] 3 SCR 969 :
(1985) 3 SCC 72 - relied on.
Roy V.D. v. State of Kerala [2000] Supp. 4 SCR 539 : (2000) 8
SCC 590; Ramesh Chandra Mehta v. State of West Bengal [1969]
2 SCR 461; In the matter of Madhu Limaye and others [1969]
3 SCR 154 : (1969) 1 SCC 292; Barium Chemicals Ltd. and
another v. Company Law Board and others [1966] Supp. 1 SCR
311 : AIR 1967 SC 295; Joseph Kuruvilla Vellukunnel v. Reserve
Bank of India and others [1962] Supp. 3 SCR 632 : AIR 1962 SC
1371; Joti Parshad v. State of Haryana (1993) Supp 2 SCC 497;
A.S. Krishnan and others v. State of Kerala [2004] 3 SCR 44 :
(2004) 11 SCC 576; Gurcharan Singh and others v. State (Delhi
Administration) [1978] 2 SCR 358 : (1978) 1 SCC 118; Ranjitsing
Brahmajeetsing Sharma v. State of Maharashtra and another [2005]
3 SCR 345 : (2005) 5 SCC 294; State of Orissa v. Debendra Nath
Padhi [2004] Supp. 6 SCR 460 : (2005) 1 SCC 568; M. Ravindran
v. Intelligence Officer, Directorate of Revenue Intelligence [2020]
12 SCR 915 : (2021) 2 SCC 485; Amarendra Kumar Pandey v.
Union of India and others [2022] 12 SCR 223 : (2022) SCC Online
SC 881; Centre for PIL and another v. Union of India and another
[2011] 4 SCR 445 : (2011) 4 SCC 1; Ram Manohar Lohia v. State
of Bihar and another [1966] 1 SCR 709 : AIR 1966 SC 740; Moti
Lal Jain v. State of Bihar and others [1968] 3 SCR 587 : AIR 1968
SC 1509; Uttamrao Shivdas Jankhar v. Ranjitsinh Vijaysinh Mohite
Patil [2009] 9 SCR 538 : (2009) 13 SCC 131; Manish Sisodia
v. Central Bureau of Investigation [2023] 15 SCR 480 : 2023
SCC OnLine SC 1393; Arnesh Kumar v. State of Bihar [2014] 8
SCR 128 : (2014) 8 SCC 273; Mohammed Zubair v. State of NCT of
Delhi [2022] 18 SCR 494 : (2022) SCC OnLine SC 897; Joginder
Kumar v. State of Uttar Pradesh [1994] 3 SCR 661 : (1994) 4
SCC 260; Siddharth v. State of Uttar Pradesh (2022) 1 SCC 676;
2370
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P. Chidambaram v. Directorate of Enforcement [2019] 12 SCR 172 :
(2019) 9 SCC 24; Chairman, All India Railway Recruitment Board
v. K. Shyam Kumar [2010] 6 SCR 291 : (2010) 6 SCC 614; State
of Uttar Pradesh v. Lal [2006] 2 SCR 656 : (2006) 3 SCC 276;
Modern Dental College & Research Centre v. State of Madhya
Pradesh [2016] 3 SCR 575 : (2016) 4 SCC 346; K.S. Puttaswamy
(Retired) and Anr. (Aadhar) v. Union of India and Anr. [2015] 9
SCR 99 : (2019) 1 SCC 1; Anuradha Bhasin v. Union of India and
Others [2020] 1 SCR 812 : (2020) 3 SCC 637; Association for
Democratic Reforms v. Union of India [2024] 2 SCR 420 : (2024)
5 SCC 1 - referred to.
Gifford v. Kelson (1943) 51 Man. R 120; Nakkuda Ali v. Jayaratne
1951 AC 66; Council of Civil Services Union v. Minister of State
for Civil Services (1984) 3 All. ER 935; R v. Secretary of State
(1991) 1 All ER 710 - referred to.
List of Acts
Prevention of Money Laundering Act, 2002; Code of Criminal
Procedure, 1973; Penal Code, 1860.
List of Keywords
Section 19 of the Prevention of Money Laundering Act, 2002;
Validity of arrest; Necessity and need to arrest; Delhi excise policy;
Liquor; Excise policy; Excise Policy case; Kickbacks; Bribes;
Enforcement Directorate; ECIR; "reasons to believe"; Preconditions
to arrest; Proceeds of crime; Aam Aadmi Party; Formal parameters
to arrest; Grounds of arrest; Money laundering; Principles
of Wednesbury reasonableness; Principle of proportionality;
Proportionality test; Judicial review.
Case Arising From
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 2493
of 2024
From the Judgment and Order dated 09.04.2024 of the High Court
of Delhi at New Delhi in WPCRL No. 985 of 2024
Appearances for Parties
Dr. Abhishek Manu Singhvi, Amit Desai, Vikram Chaudhari,
Sr. Advs., Vivek Jain, Mohd. Irshad, Rajat Bhardwaj, Karan Sharma,
[2024] 7 S.C.R.
2371
Arvind Kejriwal v. Directorate of Enforcement
Amit Bhandari, Shadan Farasat, Rajat Jain, Sadiq Noor, Mohit
Siwach, Kaustubh Khanna, Gopal Shenoy, Shailesh Chauhan, Advs.
for the Appellant.
Tushar Mehta, Solicitor General, Suryaprakash V Raju, A.S.G.,
Mukesh Kumar Maroria, Kanu Agarwal, Annam Venkatesh, Zoheb
Hussain, Vivek Gurnani, Hitarth Raja, Ms. Shweta Desai, Ms. Nidhi
Saini, Ms. Abhipriya, Ms. Agrimaa Singh, Kartik Sabarwal, Vivek
Gaurav, Samrat Goswami, Advs. for the Respondent.
Judgment / Order of the Supreme Court
Judgment
Sanjiv Khanna, J.
This appeal filed by the appellant - Arvind Kejriwal assails the
judgment and order dated 09.04.2024 passed by the single Judge
of the High Court of Delhi whereby the Criminal Writ Petition filed
by Arvind Kejriwal under Articles 226 and 227 of the Constitution
of India read with Section 482 of the Code of Criminal Procedure,
1973,1 challenging his arrest by the Directorate of Enforcement,2
vide the arrest order dated 21.03.2024, on the ground of violation
of Section 19 of the Prevention of Money Laundering Act, 2002,3
and the proceedings pursuant thereto including the order of remand
dated 22.03.2024 to the custody of DoE passed by the Special
Judge, has been rejected.
2.
At the outset, we must clarify that this is not an appeal against
refusal or grant of bail. Instead, this appeal impugns the validity of
arrest under Section 19 of the PML Act. It raises a pivotal question
regarding the scope and ambit of the trial court/courts to examine the
legality of the arrest under Section 19. The issue is legal in nature,
and with the ratio being propounded in detail, the decision becomes
complex and legalistic.4
1
For short, the "Code".
2
For short, "DoE".
3
For short, the "PML Act".
4
While introducing the Prevention of Money Laundering (Amendment) Bill, 2012 in the Rajya Sabha
on 17.12.2012, the then Finance Minister, Mr. P Chidambaram, stated, "Firstly, we must remember
that money-laundering is a very technically-defined offence. It is not the way we understand 'moneylaundering in a colloquial sense." This has been quoted with approval in Vijay Madanlal Choudhary and
others v. Union of India and others, (2022) SCC OnLine SC 929, at paragraph 35.
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3.
On 17.08.2022, the Central Bureau of Investigation5 registered
RC No. 0032022A0053 for the offences punishable under
Section 120B read with Section 477A of the Indian Penal Code,
18606 and Section 7 of the Prevention of Corruption Act, 1988. The
registration was based on a complaint dated 20.07.2022, made by the
Lieutenant Governor of the Government of National Capital Territory7
of Delhi, and on the directions of the competent authority conveyed
by the Director, Ministry of Home Affairs, Government of India.
4.
Later, on 25.11.2022, the CBI filed a chargesheet. Thereafter, on
25.04.2023 and 08.07.2023, two supplementary chargesheets were
filed. On 15.12.2022, the Special Court took cognisance of the
offences. The chargesheets inter alia allege that the excise policy,
framed for the sale of liquor in NCT of Delhi, was a product of criminal
conspiracy. It was hatched by a cartel of liquor manufacturers,
wholesalers and retailers and it provided undue pecuniary gain to
public servants and other accused in the conspiracy. It resulted in
huge losses to the government exchequer and ultimately to the
public. Arvind Kejriwal is not an accused in the said chargesheets.
5.
On 22.08.2022, the DoE recorded ECIR No. HIU-II/14/2022 based
on offences detailed under the RC registered by CBI. The offences
under the RC are the predicate offence for investigation/inquiry into
the scheduled offences under the PML Act. On 26.11.2022, the DoE
filed the first prosecution complaint. On 20.12.2022, the Special Court
took cognisance. Since then, the DoE has filed seven supplementary
prosecution complaints. In the last complaint, that is, the Seventh
Supplementary Prosecution Complaint dated 17.05.2024, Arvind
Kejriwal has been named as an accused.
6.
On 30.10.2023, Arvind Kejriwal was issued notice under Section 50
of the PML Act for his appearance and recording of statement.
Thereafter, eight summons were issued till his arrest on 21.03.2024.
DoE states that Arvind Kejriwal failed to appear and join the
investigation. Arvind Kejriwal claims that the summons and notices
under Section 50 were illegal, bad in law and invalid.8
5
For short, "CBI".
6
For short, "IPC".
7
For short, "NCT".
8
We are not directly examining the question of validity of the summons and notices, though the effect and
failure to appear is one of the aspects which will be noticed subsequently.
[2024] 7 S.C.R.
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Arvind Kejriwal v. Directorate of Enforcement
7.
The cardinal ground taken in the present appeal is that Arvind
Kejriwal was arrested in violation of Section 19(1) of the PML Act.
It is contended that the arrest was illegal, which makes the order of
remand to custody of the DoE passed by the Special Court dated
01.04.2024 also illegal. Therefore, it would be apt to begin by referring
to Section 19 and elucidating how the Courts have interpreted and
applied the section.
8.
Section 19 of the PML Act reads:
"19. Power to arrest.-(1) If the Director, Deputy Director,
Assistant Director or any other officer authorised in this
behalf by the Central Government by general or special
order, has on the basis of material in his possession,
reason to believe (the reason for such belief to be recorded
in writing) that any person has been guilty of an offence
punishable under this Act, he may arrest such person and
shall, as soon as may be, inform him of the grounds for
such arrest.
(2) The Director, Deputy Director, Assistant Director or
any other officer shall, immediately after arrest of such
person under sub-section (1), forward a copy of the order
along with the material in his possession, referred to in
that sub-section, to the Adjudicating Authority, in a sealed
envelope, in the manner as may be prescribed and such
Adjudicating Authority shall keep such order and material
for such period, as may be prescribed.
(3) Every person arrested under sub-section (1) shall,
within twenty-four hours, be taken to a Special Court or
Judicial Magistrate or a Metropolitan Magistrate, as the
case may be, having jurisdiction:
Provided that the period of twenty-four hours shall exclude
the time necessary for the journey from the place of arrest
to the Special Court or Magistrate's Court."
9.
A bare reading of the section reflects, that while the legislature has
given power to the Director, Deputy Director, Assistant Director, or an
authorised officer to arrest a person, it is fenced with preconditions
and requirements, which must be satisfied prior to the arrest of a
person. The conditions are -
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⇒
The officer must have material in his possession.

⇒
On the basis of such material, the authorised officer should
form and record in writing, "reasons to believe" that the
person to be arrested, is guilty of an offence punishable
under the PML Act.

⇒
The person arrested, as soon as may be, must be informed
of the grounds of arrest.
These preconditions act as stringent safeguards to protect life and
liberty of individuals. We shall subsequently interpret the words
"material", "reason to believe", and "guilty of the offence". Before that,
we will refer to some judgments of this Court on the importance of
Section 19(1) and the effect on the legality of the arrest upon failure
to comply with the statutory requirements.
10. In Pankaj Bansal v. Union of India and others,9 interpreting Section
19 of the PML Act with reference to Article 22(1) of the Constitution
of India,10 this Court has observed:
"32. In this regard, we may note that Article 22(1) of
the Constitution provides, inter alia, that no person who
is arrested shall be detained in custody without being
informed, as soon as may be, of the grounds for such
arrest. This being the fundamental right guaranteed to
the arrested person, the mode of conveying information
of the grounds of arrest must necessarily be meaningful
so as to serve the intended purpose. It may be noted
that Section 45 of the Act of 2002 enables the person
arrested under Section 19 thereof to seek release on bail
but it postulates that unless the twin conditions prescribed
thereunder are satisfied, such a person would not be
entitled to grant of bail. The twin conditions set out in the
provision are that, firstly, the Court must be satisfied, after
giving an opportunity to the public prosecutor to oppose the
application for release, that there are reasonable grounds
9
[2023] 12 SCR 714 : 2023 SCC Online SC 1244
10
"22. Protection against arrest and detention in certain cases.-(1) No person who is arrested shall be
detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall
he be denied the right to consult, and to be defended by, a legal practitioner of his choice."
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to believe that the arrested person is not guilty of the
offence and, secondly, that he is not likely to commit any
offence while on bail. To meet this requirement, it would
be essential for the arrested person to be aware of the
grounds on which the authorized officer arrested him/her
under Section 19 and the basis for the officer's 'reason
to believe' that he/she is guilty of an offence punishable
under the Act of 2002. It is only if the arrested person
has knowledge of these facts that he/she would be in a
position to plead and prove before the Special Court that
there are grounds to believe that he/she is not guilty of
such offence, so as to avail the relief of bail. Therefore,
communication of the grounds of arrest, as mandated by
Article 22(1) of the Constitution and Section 19 of the Act
of 2002, is meant to serve this higher purpose and must
be given due importance."
In the Court's view, Section 19 includes inbuilt checks that designated
officers must adhere to. First, the "reasons to believe" of the
alleged involvement of the arrestee have to be recorded in writing.
Secondly, while affecting the arrest, the reasons shall be furnished
to the arrestee. Lastly, a copy of the order of arrest along with the
material in possession have to be forwarded to the safe custody
of the adjudicating authority. This ensures fairness, objectivity and
accountability of the designated officer while forming their opinion,
regarding the involvement of the arrestee in the offence of money
laundering.
11. Arrest under Section 19(1) of the PML Act may occur prior to the
filing of the prosecution complaint and before the Special Judge
takes cognizance.11 Till the prosecution complaint is filed, there is
no requirement to provide the accused with a copy of the ECIR.12
The ECIR is not a public document. Thus, to introduce checks and
balances, Section 19(1) imposes safeguards to protect the rights
and liberty of the arrestee. This is in compliance with the mandate
of Article 22(1) of the Constitution of India.
11
See Tarsem Lal v. Directorate of Enforcement, Jalandhar Zonal Office (2024) SCC Online SC 971.
12
It appears that in several cases multiple complaints in same ECIR are filed. Whether a copy of the
ECIR must be supplied to an accused has been examined in Vijay Madanlal Choudhary (supra) which
has been referred to subsequently.
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12. V. Senthil Balaji v. State and others13 similarly states that the
designated officer can only arrest once they record "reasons to
believe" in writing, that the person being arrested is guilty of the
offence punishable under the PML Act. It is mandatory to record
the "reasons to believe" to arrive at the opinion that the arrestee is
guilty of the offence, and to furnish the reasons to the arrestee. This
ensures an element of fairness and accountability.
13. The decision in V. Senthil Balaji (supra) has also examined the
interplay between Section 19 of the PML Act and Section 167 of
the Code. The magistrate is expected to do a balancing act as the
investigation is to be concluded within 24 hours as a matter of rule.
Therefore, the investigating agency has to satisfy the magistrate
with adequate material on the need for custody of the arrestee.
Magistrates must bear this crucial aspect in mind while examining
and passing an order on the DoE's prayer for custodial remand. More
significantly, the magistrate is under the bounden duty to ensure due
compliance with Section 19(1) of the PML Act. Any failure to comply
would entitle the arrestee to be released. Section 167 of the Code,
therefore, enjoins upon the magistrate the necessity to satisfy due
compliance of the law by perusing the order passed by the authority
under Section 19(1) of the PML Act. Upon such satisfaction, the
magistrate may consider the request for custodial remand.
14. Pankaj Bansal (supra) reiterates V. Senthil Balaji (supra) to hold
that the magistrate/court has the duty to ensure that the conditions
in Section 19(1) of the PML Act are duly satisfied and that the arrest
is valid and lawful. This is in lieu of the mandate under Section 167
of the Code. If the court fails to discharge its duty in right earnest
and with proper perspective, the remand order would fail on the
ground that the court cannot validate an unlawful arrest made under
Section 19(1). The Court relied on In the matter of Madhu Limaye
and others,14 which held that it is necessary for the State to establish
that, at the stage of remand, while directing detention in custody,
the magistrate has applied their mind to all relevant matters. If the
arrest itself is unconstitutional viz. Article 22(1) of the Constitution,
the remand would not cure the constitutional infirmities attached
13
[2023] 12 SCR 853 : (2024) 3 SCC 51
14
[1969] 3 SCR 154 : (1969) 1 SCC 292
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to such arrest. The principle stands expanded, as the violation of
Section 19(1) of the PML Act will equally vitiate the arrest.
15. In Pankaj Bansal (supra), one of the contentions raised by the
DoE was that the legality of arrest is rendered immaterial once the
competent court passes an order of remand. Reliance was placed
on certain judgments. However, these judgments were distinguished
on the ground that they primarily addressed writs of habeas corpus
following remand orders by the jurisdictional court. Therefore, the
ratios therein are not applicable to this scenario. In the context of
statutory compliance, the Court observed in clear terms that if the
arrest is not in conformity with Section 19(1) of the PML Act, the
mere passing of an order of remand, in itself, would not be sufficient
to validate the person's arrest. Thus, notwithstanding the order of
remand, the issue whether the arrest of the person is lawful at its
inception, is open for consideration and must be answered.
16. Recently, in Prabir Purkayastha v. State (NCT of Delhi),15 this
Court reiterated the aforesaid principles expounded in Pankaj
Bansal (supra). The said principles were applied to the pari materia
provisions16 of the Unlawful Activities (Prevention) Act, 1967. The
Court explained that Section 19(1) of the PML Act is meant to serve
a higher purpose, and also to enforce the mandate of Article 22(1) of
the Constitution. The right to life and personal liberty is sacrosanct,
a fundamental right guaranteed under Article 21 and protected by
Articles 20 and 22 of the Constitution. Reference was made to the
observations of this Court in Roy V.D. v. State of Kerala17 that the right
to be informed about the grounds of arrest flows from Article 22(1) of
the Constitution and any infringement of this fundamental right vitiates
the process of arrest and remand. The fact that the chargesheet has
been filed in the matter would not validate the otherwise illegality
and unconstitutionality committed at the time of arrest and grant
of remand custody of the accused. Reference is also made to the
principle behind Article 22(5) of the Constitution. Thus, this Court held
that not complying with the constitutional mandate under Article 22(1)
and the statutory mandate of the UAPA, on the requirement to
15
2024 SCC OnLine SC 934
16
Sections 43A, 43B and 43C of the UAPA.
17
[2000] Supp. 4 SCR 539 : (2000) 8 SCC 590
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communicate grounds of arrest or grounds of detention, would lead
to the custody or detention being rendered illegal.
17. In Vijay Madanlal Choudhary and others v. Union of India and
others,18 a three Judge Bench of this Court distinguished between
the stringent requirements stipulated in Section 19(1) of the PML Act,
and the power of arrest given to the police in cognisable offences
under Section 41 of the Code.19 Reference was made to Section 104
of the Customs Act, 1962,20 which was elucidated and considered
18
[2022] 6 SCR 382 : (2022) SCC Online SC 929
19
"41. When police may arrest without warrant. - (1) Any police officer may without an order from a
Magistrate and without a warrant, arrest any person-
(a) who commits, in the presence of a police officer, a cognizable offence;
(b) against whom a reasonable complaint has been made, or credible information has been received, or
a reasonable suspicion exists that he has committed a cognizable offence punishable with imprisonment
for a term which may be less than seven years or which may extend to seven years whether with or
without fine, if the following conditions are satisfied, namely:-
(i) the police officer has reason to believe on the basis of such complaint, information, or suspicion that
such person has committed the said offence;
(ii) the police office is satisfied that such arrest is necessary-
(a) to prevent such person from committing any further offence; or
(b) for proper investigation of the offence; or
(c) to prevent such person from causing the evidence of the offence to disappear or tampering with such
evidence in any manner; or
(d) to prevent such person from making any inducement, threat or promise to any person acquainted
with the facts of the case so as to dissuade him from disclosing such facts to the Court or to the police
officer; or
(e) as unless such person is arrested, his presence in the Court whenever required cannot be ensured,
and the police officer shall record while making such arrest, his reasons in writing.
Provided that a police officer shall, in all cases where the arrest of a person is not required under the
provisions of this sub-section, record the reasons in writing for not making the arrest.
(ba) against whom credible information has been received that he has committed a cognizable offence
punishable with imprisonment for a term which may extend to more than seven years whether with or
without fine or with death sentence and the police officer has reason to believe on the basis of that
information that such person has committed the said offence;
(c) who has been proclaimed as an offender either under this Code or by order of the State Government;
or
(d) in whose possession anything is found which may reasonably be suspected to be stolen property
and who may reasonably be suspected of having committed an offence with reference to such thing; or
(e) who obstructs a police officer while in the execution of his duty, or who has escaped, or attempts to
escape, from lawful custody; or
(f) who is reasonably suspected of being a deserter from any of the Armed Forces of the Union; or
(g) who has been concerned in, or against whom a reasonable complaint has been made, or credible
information has been received, or a reasonable suspicion exists, of his having been concerned in, any
act committed at any place out of India which, if committed in India, would have been punishable as an
offence, and for which he is, under any law relating to extradition, or otherwise, liable to be apprehended
or detained in custody in India; or
(h) who, being a released convict, commits a breach of any rule made under sub-section (5) of Section
356; or
(i) for whose arrest any requisition, whether written or oral, has been received from another police officer,
provided that the requisition specifies the person to be arrested and the offence or other cause for which
the arrest is to be made and it appears therefrom that the person might lawfully be arrested without a
warrant by the officer who issued the requisition."
20
For short, "Customs Act".
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by the Constitution Bench of this Court in Ramesh Chandra Mehta
v. State of West Bengal,21 and in Union of India v. Padam Narain
Aggarwal and others.22 On the safeguards against the abuse of the
power of arrest in case of the Customs Act, Padam Narain Aggarwal
(supra) observes that the power to arrest by a customs os anfficer
is statutory in character. Such power can be exercised only in cases
where the customs officer has the "reason to believe" that the person
sought to be arrested is guilty of the offence punishable under the
prescribed sections. Padam Narain Aggarwal (supra) observes:
"36. From the above discussion, it is amply clear that
power to arrest a person by a Customs Officer is statutory
in character and cannot be interfered with.