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Breaking | Nawab Malik Arrest: Bombay High Court Denies Interim Relief, Judicial Custody To Continue

Sharmeen Hakim
15 March 2022 6:15 AM GMT
Breaking | Nawab Malik Arrest: Bombay High Court Denies Interim Relief, Judicial Custody To Continue
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The Bombay High Court refused to direct the release of Maharashtra Cabinet Minister Nawab Malik in a money laundering case over his "involvement in terror funding" based on a 1999- 2005 land deal concerning Dawood Ibrahim's sister. A division bench of Justices PB Varale and SM Modak passed the order on Malik's habeas corpus petition seeking interim reliefs of "immediate...

The Bombay High Court refused to direct the release of Maharashtra Cabinet Minister Nawab Malik in a money laundering case over his "involvement in terror funding" based on a 1999- 2005 land deal concerning Dawood Ibrahim's sister.

A division bench of Justices PB Varale and SM Modak passed the order on Malik's habeas corpus petition seeking interim reliefs of "immediate release."

"As certain debatable issues are raised, they require to be heard at length. Considering the grounds assigned by us we are not inclined to allow the prayers in the interim application. Applications rejected," it said.

The Nationalist Congress Party (NCP) leader has challenged the PMLA proceedings against him, including the Special court's orders remanding him in custody. He sought to quash the ECIR against him and also declaration that his arrest is "illegal arrest."

The Enforcement Directorate had arrested the NCP leader on February 23.

The ED questioned the maintainability of Malik's petition stating that Section 19 (arrest under PMLA) was surreptitiously followed and the remand order was not passed mechanically and reflected application of mind.

"Habeas corpus is the Brahmashirsha astra of the judiciary to protect personal liberty. It's the most powerful weapon. After 23, without even a semblance of an opportunity, he was picked up and charged under PMLA based on unreliable statements," Malik's counsel had argued.

The Case

The ED alleged that Malik connived with D-gang members i.e. Haseena Parker (late), her drive Salim Patel (late) and Sardar Khan (1993 bomb blast convict), and usurped one Munira Plumber's 3 acre ancestral property in Kurla for Rs 20 lakhs despite ready reckoner rate of Rs 3.54 crore between 2003-05.

According to the agency a power of attorney given by Plumber to Patel and Khan for removing encroachments on her land was misused to sell the property to a company owned by Malik's family.

Malik's Arguments

Malik was represented by Senior counsel Amit Desai and advocate Kushal Mor instructed by Rashmikant and Partners. He argued that PMLA couldn't be applied retrospectively against Malik for two reasons.

The first that Malik the alleged transactions date back to 1999-2005, while PMLA as enacted only in 2005. Moreover, while remanding Malik in custody, the special court had used the amended definition of Section 3 of PMLA instead of the original simplistic definition of Section 3 from 2005. He argued that "possession" and "concealment" with which Malik is charged was added to the explanation of section 3 through amendments after 2013.

He submitted that Malik's arrest is against the "doctrine of retrospectivity and expost facto laws" and questioned the credibility of claims made by the original owner of the Kurla compound who came forward to complain after 22 years and called it a bonafide sale transaction.

Ipso facto possession of proceeds of the crime is not an offence, Desai says while citing Section 5 of the PMLA. He distinguished continuous possession of banned substances like narcotics from possession of property.

ED's Arguments

Continues Offence

The ED represented by Additional Solicitor General Anil Singh, assisted by Advocates Hiten Venegavkar and Shreeram Shirsat argued that an ECIR, was an internal document unlike an FIR. Therefore, it couldn't be quashed.

Malik's petition seeking to combine multiple causes of action being habeas corpus, quashing of the ECIR and release/bail in one writ petition, which is not maintainable, they argued.

Regarding retrospective application of PMLA the ASG submitted that the original definition of Section 3 of PMLA includes the words "process" and "activity", which itself would consist of Malik's activities. The finance minister had merely clarified the offences that would fall under Section 3.

He asserted that "the offence of money laundering is a continuing offence as even provided in the statute. There is no challenge to the provisions of the statue." Therefore, there was no question of retrospective application. Moreover, Malik was still in possession of the plot therefore the offence was continuing in nature.

Singh submitted that proceeds of crime, knowledge and projection, all the three ingredients are present against Malik in this case.

Maintainability

Desai argued that a habeas corpus plea was perfectly maintainable in the present case. He cited the Supreme Court judgement in the case of senior journalist and Bhima Koregaon accused Gautam Navlakha, who had also challenged the remand in a habeas corpus petition.

However, Singh observed that since the remand order is neither 'mechanical' or 'manifestly illegal,' the judgement in Gautam Navalakha's case wouldn't apply.

Twin Conditions for Bail Would Apply

ASG argued that Malik was basically seeking bail in a petition under Article 226. However, he could not escape the twin conditions that have to be met for grant of bail in PMLA. The conditions require the court to record its satisfaction of the accused's innocence and second that he is unlikely to commit a similar offence when released can bail be granted.

Desai argued that would go against the basic structure of a remedy under Article 226 of the Constitution as self - restraint under Art 266 cannot be created by the legislature. Desai argued that the remand order was descriptive but failed to show application of mind.

Moreover, Malik voluntarily came to the ED office and was arrested after his statement was recorded, the agency claimed.

Citation: 2022 LiveLaw (Bom) 82

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