7 Aug 2023 5:11 AM GMT
The Supreme Court on Monday dismissed Tamil Nadu Minister Senthil Balaji's plea challenging the custody by the Enforcement Directorate in the money laundering case. The Court allowed the Directorate of Enforcement to have Balaji's custody till August 12 in connection with the cash-for-jobs scam.A Bench comprising Justices AS Bopanna and MM Sundresh dismissed the petitions filed by Balaji and...
The Supreme Court on Monday dismissed Tamil Nadu Minister Senthil Balaji's plea challenging the custody by the Enforcement Directorate in the money laundering case. The Court allowed the Directorate of Enforcement to have Balaji's custody till August 12 in connection with the cash-for-jobs scam.
A Bench comprising Justices AS Bopanna and MM Sundresh dismissed the petitions filed by Balaji and his wife Megala challenging the Madras High Court's judgment which held that the Enforcement Directorate was entitled to take Balaji into police custody. The Court also rejected their pleas that the ED's arrest was illegal.
The Court held that writ of habeas corpus was not maintainable against the arrest by the ED. The order of remand cannot be challenged in a habeas corpus petition. If there is any violation of the procedure for arrest prescribed in Section 19 of the Prevention of Money Laundering Act, then action can be taken against the concerned officer in terms of Section 62 of the PMLA.
The 2-judge bench also referred the judgment in Anupam Kulkarni, which held that police custody is not permissible beyond first 15 days of remand, to larger bench for reconsideration. Justice Sundresh read out the operative portion of the judgment, which was reserved on August 2.
Conclusions in the judgment :
i When an arrestee is forwarded to the jurisdictional Magistrate under Section 19(3) of the PMLA, 2002 no writ of Habeus Corpus would lie. Any plea of illegal arrest is to be made before such Magistrate since custody becomes judicial.
ii. Any non-compliance of the mandate of Section 19 of the PMLA, 2002 would enure to the benefit of the person arrested. For such noncompliance, the Competent Court shall have the power to initiate action under Section 62 of the PMLA, 2002.
iii. An order of remand has to be challenged only before a higher forum as provided under the CrPC, 1973 when it depicts a due application of mind both on merit and compliance of Section 167(2) of the CrPC, 1973 read with Section 19 of the PMLA 2002.
iv. Section 41A of the CrPC, 1973 has got no application to an arrest made under the PMLA 2002.
v. The maximum period of 15 days of police custody is meant to be applied to the entire period of investigation – 60 or 90 days, as a whole.
vi. The words “such custody” occurring in Section 167(2) of the CrPC, 1973 would include not only a police custody but also that of other investigating agencies.
vii. The word “custody” under Section 167(2) of the CrPC, 1973 shall mean actual custody.
viii. Curtailment of 15 days of police custody by any extraneous circumstances, act of God, an order of Court not being the handy work of investigating agency would not act as a restriction.
ix. Section 167 of the CrPC, 1973 is a bridge between liberty and investigation performing a fine balancing act.
x. The decision of this Court in Anupam J. Kulkarni (supra), as followed subsequently requires reconsideration by a reference to a larger Bench.
Balaji, the Minister of Electricity, Prohibition and Excise, was arrested by the ED on June 15 in connection with a cash-for-jobs scam relating back to his term as Transport Minister during the 2011-16 AIADMK government. The arrest followed an order of the Supreme Court in May which set aside a direction of the Madras High Court staying the proceedings in the money laundering case against him.
On the very day of the arrest, his wife filed a habeas corpus petition before the High Court contending that the arrest and detention was illegal. The High Court denied him interim bail but allowed him to be shifted to a private hospital named Cauvery Hospital after he complained of chest pain. A division bench of the High Court delivered a split verdict in the habeas plea. Justice Nisha Banu had held that Enforcement Directorate is not entrusted with the powers to seek police custody under the Prevention of Money Laundering Act. Differing from this opinion, Justice Bharatha Chakravarthy had held that the Habeas Corpus Petition is not maintainable and the ED was entitled to police custody of the accused. In view of the split, the matter was referred to a third judge, Justice CV Kathikeyan, who ruled in favour of the ED.
What have the petitioners argued?
Senior Advocate Kapil Sibal earlier argued that the power to make an arrest under the Prevention of Money Laundering Act could not be conflated with the power to seek police remand, and the Enforcement Directorate’s custody of the minister flew in the face of the 2022 judgment of the Supreme Court in Vijay Madanlal Choudhary. In other words, it was illegal inasmuch as ED officers were not ‘police officers’ under the Prevention of Money Laundering Act, as per the Vijay Madanlal Choudhary decision. The senior counsel also, inter alia, explained that there was a bar on the officers of the Enforcement Directorate from seeking police remand since ‘investigation’ under the governing statute was interpreted to be an ‘inquiry’ in this judgment, in addition to officers not being held to be police officers.
Section 167 of the Code cannot apply ‘wholesale’ to the Prevention of Money Laundering Act, Sibal insisted. His contention was that only a ‘truncated’ form of the section would apply, starting from the time when an accused is produced before a magistrate leading to the magistrate taking cognisance of the offences.
Senior Advocate Mukul Rohatgi supplemented these contentions by arguing that investigating agencies like the Directorate of Enforcement (ED) had no vested right to take an accused into police custody, even within the first 15 days since the permission of a magistrate was a necessary prerequisite then. The senior counsel insisted that judicial custody was the rule, and police custody the exception. In support of this contention, he relied on the 1992 Anupam Kulkarni ruling, in which the top court had said that an accused could not be detained in police custody after the expiry of 15 days from their initial arrest. Notably, Rohatgi also questioned the correctness of the Supreme Court’s decision in the April 2023 Vikas Mishra judgment, in which a bench headed by former judge MR Shah called for reconsideration of the Anupam Kulkarni bar on police custody beyond 15 days from the date of arrest. This ruling, the senior counsel told the bench, was made in per incuriam since it ignored the decision of a coordinate bench. Owing to the conflicting positions adopted by previous benches, Rohatgi urged the court to refer the matter to a larger bench.
Both Sibal and Rohatgi have also doubted the necessity of custodial interrogation saying that the minister, who is currently in a prison hospital under judicial custody, may still be interrogated by the Enforcement Directorate without police remand.
What has ED argued?
The main thrust of the Enforcement Directorate’s objection to Senthil Balaji and his wife’s pleas was the applicability of Section 167 of the Code of Criminal Procedure to the provisions of the Prevention of Money Laundering Act dealing with police remand.
“Section 167 of the Code applies to the Prevention of Money Laundering Act. They cannot have a ‘made to measure’ provision, where the section will only apply with respect to judicial custody, default bail, and other things, but not to the grant of police remand…This is the ratio of Deepak Mahajan. Section 167 applies to all special statutes, unless there is anything contrary, in which case the concerned provision of the special statute will prevail. For them to succeed, they will have to show that there is some provision contrary to Section 167", SG argued.
Besides this, Solicitor-General Mehta argued that the conduct of the accused prevented the Enforcement Directorate from exercising its right of custodial interrogation, owing to an order of the court. To ‘bring truth to life’ was not just a right, but also a duty owed to the victims of the crimes the embattled legislator is accused of committing, the law officer told the bench. “This is a duty that the ED was not allowed to perform owing to intervening circumstances and the order of a constitutional court.”
The 15 days rule, he further argued, would apply only to the magistrate which has no inherent jurisdiction. Seeking to distinguish the precedents relied on by the petitioners, Mehta added, “In the first instance, we requested the high court to pass an order in exercise of its constitutional jurisdiction excluding the period that Senthil Balaji was under hospitalisation. Note that in none of the cases the petitioners have relied on, including Anupam Kulkarni, was there a contemporaneous high court order preventing custody, nor did the prosecution continuously request to take the accused into custody since it was prevented by intervening circumstances beyond its control.”
Even if the bar of Section 167 were to disentitle the Enforcement Directorate from seeking police custody of the DMK leader beyond 15 days, the period would only be calculated from the date on which the agency secured ‘actual physical custody’ of the accused, Solicitor General Mehta argued.
The law officer also invoked the doctrine of relation back to argue that once the high court came to the conclusion that the Enforcement Directorate was entitled to seek custody, by a majority of judges, it ought to have restored position as on date on which remand was sought. He asserted that the litigation was an attempt the legislator to ‘frustrate’ the process and evade custodial interrogation, saying, “Ultimately, the game is, he wanted to wait out the first 15 days to frustrate the process and rely upon the technicality of a judgment that does not apply to his case.”
Case Title: V. SENTHIL BALAJI V. THE STATE REPRESENTED BY DEPUTY DIRECTOR AND ORS., CRIMINAL APPEAL NOS. 2284-2285 of 2023
Citation : 2023 LiveLaw (SC) 611