Court finds compliance with statutory safeguards in high-profile money laundering case
In a significant ruling, the Calcutta High Court dismissed the writ petition filed by Yogesh Dua, challenging his arrest by the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act, 2002 (PMLA). The court, presided over by Justice Suvra Ghosh, found that the ED had adhered to the statutory safeguards mandated under Section 19 of the PMLA, ensuring fairness, objectivity, and accountability in the arrest process.
Yogesh Dua, in custody since April 2025, argued against the legality of his arrest, contending that the "reasons to believe" and "grounds of arrest" were inadequate and that the ED's investigation was not independent of the predicate offence. His legal team highlighted procedural lapses, asserting that material forwarded to the Adjudicating Authority was delayed, thus violating Section 19(2) of the PMLA.
However, the court meticulously examined the statutory requirements and the procedural adherence by the ED. It noted that the material was forwarded within a reasonable time frame, considering public holidays immediately following the arrest. The court emphasized that the ED conducted an independent investigation, collecting sufficient material to justify the arrest, independent of the predicate offence investigation.
Justice Ghosh cited precedents where the Supreme Court outlined the conditions under Section 19 of the PMLA, emphasizing the necessity for an independent investigation and recording "reasons to believe" in writing. The ruling underscored that judicial review in such matters should focus on compliance with statutory safeguards rather than the adequacy of material leading to an arrest.
The court clarified that its decision did not delve into the merits of the allegations against Dua but strictly addressed the compliance with procedural norms under the PMLA. Justice Ghosh emphasized that the sufficiency or adequacy of evidence should be evaluated at trial, not at the stage of arrest.
The judgment serves as a reaffirmation of the stringent requirements under the PMLA for arresting authorities, maintaining a balance between effective law enforcement and safeguarding individual rights. The court's decision underscores the importance of procedural compliance, ensuring that authorities do not act arbitrarily, thus upholding the rule of law.
Bottom Line:
Compliance with Section 19 of the Prevention of Money Laundering Act (PMLA) - Arrest under PMLA requires adherence to stringent safeguards, including recording "reasons to believe," informing the arrestee of the grounds of arrest, and forwarding relevant materials to the Adjudicating Authority within a reasonable timeframe.
Statutory provision(s): Prevention of Money Laundering Act, 2002, Sections 19(1), 19(2)
