Case Note & Summary
The applicants, Aditya Ishwardas Rasiwasia and Ishwardas Laxmichand Agarwal, filed an application under Section 438 of the Code of Criminal Procedure, 1973 seeking anticipatory bail in connection with a case registered by the Central Bureau of Investigation (CBI) for offences under the Prevention of Money Laundering Act, 2002 (PMLA). The applicants were not arrested at the time of filing the application. The CBI had filed a remand application seeking custody of the applicants, and the authorized officer under the PMLA issued an arrest order under Section 19 of the PMLA. The applicants challenged the arrest order on the ground that it was passed without application of mind, as it was a verbatim reproduction of the CBI's remand application. The court examined the arrest order and found that the authorized officer had not recorded any independent satisfaction or reasons as required under Section 19 of the PMLA. The court held that the arrest was illegal and that the applicants were entitled to anticipatory bail. The court directed that in the event of arrest, the applicants be released on bail on furnishing a personal bond of Rs. 1,00,000 each with one or more sureties. The court also imposed conditions that the applicants shall not tamper with evidence or influence witnesses and shall appear before the investigating officer as and when required.
Headnote
A) Criminal Procedure Code - Anticipatory Bail - Section 438 CrPC - PMLA - Arrest under Section 19 PMLA requires the authorized officer to record reasons in writing and be satisfied that the person is guilty of money laundering. In the present case, the arrest order was a verbatim reproduction of the CBI remand application, indicating non-application of mind. Held that such arrest is illegal and the applicants are entitled to anticipatory bail. (Paras 1-10) B) Prevention of Money Laundering Act - Arrest - Section 19 PMLA - The authorized officer must form an independent opinion before arresting. The arrest order in this case merely reproduced the CBI's allegations without any independent satisfaction. Held that the arrest was not in compliance with Section 19 PMLA. (Paras 1-10) C) Criminal Procedure Code - Anticipatory Bail - Section 438 CrPC - Even in PMLA cases, if the arrest is illegal, the court can grant anticipatory bail. The court directed that in the event of arrest, the applicants be released on bail on furnishing a personal bond of Rs. 1,00,000 each. (Paras 1-10)
Issue of Consideration
Whether the arrest of the applicants under Section 19 of the Prevention of Money Laundering Act, 2002 was illegal due to non-application of mind by the authorized officer, and whether anticipatory bail can be granted in such circumstances.
Final Decision
The court allowed the application and granted anticipatory bail to the applicants. In the event of arrest, they shall be released on bail on furnishing a personal bond of Rs. 1,00,000 each with one or more sureties. Conditions imposed: not to tamper with evidence, not to influence witnesses, and to appear before the investigating officer as required.
Law Points
- Arrest under PMLA requires independent satisfaction of authorized officer
- non-application of mind vitiates arrest
- anticipatory bail can be granted in PMLA cases if arrest is illegal
- Section 19 PMLA
- Section 438 CrPC
