Supreme Court Judgment In 'Arvind Kejriwal' Requiring ED To Supply 'Reasons To Believe' To Arrestee Cannot Apply Retrospectively: Delhi HC

The Delhi High Court has held that the condition of supplying the “reasons to believe” by ED to a person arrested under PMLA as a separate document as per Supreme Court's ruling in Arvind Kejriwal case ought to be applied prospectively. Justice Anish Dayal said that the ED could not be expected to comply with the additional condition, if the arrest was made in the pre-Arvind Kejriwal judgment period. On July 12, the Supreme Court, while granting bail to Kejriwal in the liquor policy case, had held that arrest under Section 19 of PMLA cannot be made simply for the purposes of investigation. Rather, the power can be exercised only when the concerned officer is able to form an opinion, based on material in possession, and upon recording reasons in writing, that the arrestee is guilty.Section 19 says that the ED officers can arrest only if they have reasons to believe, which are recorded in writing, that the accused is guilty of an offence under PMLA.Justice Dayal made the observations while dismissing the plea moved by an accused, Arvind Dham, challenging the arrest memo, his arrest order and subsequent remand orders in a money laundering case. It was his case that there was violation of Section 19 of PMLA as well as of the constitutional safeguards against allegedly arbitrary detention.He contended that the exculpatory material, which exonerated him, was not considered in the “grounds of arrest” and that he was not provided with “reasons to believe.”An issue arose in the case as to whether the condition imposed by the Supreme Court in Arvind Kejriwal case, ought to be applied prospectively or retrospectively.Rejecting the plea, the Court said that while challenging the legality of arrest, the position to be assessed is at the time when the arrest was originally made and what the authorities, as per law crystallised at that time, were obligated to do.“In this case, the arrest was made on 09th July 2024, whereas the decision in Arvind Kejriwal (supra) was pronounced on 12th July 2024. It would be difficult to assume that on 09th July 2024 the ED could have foreseen that this additional requirement would be stipulated by the Supreme Court in the coming week,” the Court said. It added: “To hold the ED to have complied with that requirement of supplying the reasons to believe would defy logic. In any event, as argued by Special Counsel for ED, the grounds of arrest itself contain the substance of reasons to believe, being detailed in its narrative; same is evident from a perusal of the case file requisitioned from the ED.”The Court noted that the grounds of arrest which accompanied the arrest order were substantially detailed, running into 36 paragraphs. It further noted that rhe remand application was detailed, and contained the same set of facts as were stated in the grounds of arrest. “The “reasons to believe” were not provided by the ED as a separate document since, as discussed above, the ED was not obligated to do so since the arrest was in the pre-Arvind Kejriwal (supra) period which introduced this additional condition,” the Court said. It said that the compliance of Section 19(2) of PMLA regarding forwarding a copy of the order along with material in possession immediately after ED made the arrest was done on July 10, the morning after the arrest. The Court referred to the Supreme Court ruling in question and highlighted the law on the subject of legality of arrest under Section 19 of PMLA.The Court reiterated that an officer who makes an arrest under the PMLA cannot ignore the material which exonerates the arrestee. On relevancy of exculpatory material, the Court reiterated that any such non-consideration of the material would negate the legislative intent and give undue latitude to the ED. It concluded that Dham's arrest did not fall foul of provision of Section 19 of PMLA and the judicial review (not merits review) of the grounds for arrest, which subsume the reasons to believe, did not invite an adverse inference from the Court.“Needless to state that, as pointed out by the Supreme Court itself in Arvind Kejriwal (supra), all grounds can be agitated by the petitioner/accused at the stage of plea of bail, and the Court may have a larger canvas before itself to consider the petitioner's plea, if and when taken up,” the Court said.Senior Advocates Vikram Chaudhari and Pramod Kumar Dubey appeared for Dham. CGSC Anurag Ahluwalia represented Union of India. Zoheb Hossain, Special Counsel, appeared for ED.Title: ARVIND DHAM v. UNION OF INDIA & ORS.Citation: 2024 LiveLaw (Del) 1312Click here to read order

Supreme Court Judgment In 'Arvind Kejriwal' Requiring ED To Supply 'Reasons To Believe' To Arrestee Cannot Apply Retrospectively: Delhi HC

Nupur Thapliyal

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Supreme Court Judgment In 'Arvind Kejriwal' Requiring ED To Supply 'Reasons To Believe' To Arrestee Cannot Apply Retrospectively: Delhi HC

Nupur Thapliyal

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