ARVIND KEJRIWAL V. DIRECTORATE OF ENFORCEMENT

CASE CITATION ~

TITLE ~ Arvind Kejriwal v. Directorate of Enforcement NO. 5154 of 2024

COURT ~ Supreme Court of India

YEAR ~ 10 May, 2024

NATURE OF THE PROCEEDING ~ Appeal challenging arrest under PMLA: Prevention of Money Laundering Act.

SUBJECT ~ Arrest of Chief Minister of Delhi in relation with alleged money laundering in the Delhi Excise Policy 2021-22.

INTRODUCTION ~

[1]The Delhi Excise Policy 2021-22 was executed to ease liquor trade, check and control monopoly, ensure transparency, generate revenue as well as foster consumer experience, however the policy brought several shortcomings and implementation was sub-optimal. The main clause of the policy was, it laid out the framework for acquiring wholesale licenses to private entities or companies who have at least 5 years of liquor distribution experience and annual turnover of 150 crore rupees within 3 years. The manufacturers were allowed to partner exclusively with one of the licensed wholesaler or private entity. The said initiative was later discontinued by the Delhi Government on grounds of allegations of irregularities and undue benefits to the private entities.

The arrest of CM Arvind Kejriwal by the directorate of enforcement under section 19 of the Prevention of Money Laundering Act, which authorizes the Enforcement Directorate to issue an arrest against any person suspected of money laundering, was lawful and consistent with constitutional safeguards under Article 14, 19 and 21 of the Constitution of India.

FACTS OF THE CASE ~

1. [2]The irregularities in the formulation and execution of Delhi Excise Policy 2021-22 was registered by the Central Bureau of Investigation.
2. Thereafter, on the basis of the offences registered by the CBI, the Enforcement Directorate initiated judicial proceedings under the Prevention of Money Laundering Act, alleging money laundering.
3. Numerous summons were issued to Arvind Kejriwal under the ambit of Section 50 of PMLA as part of the investigation and for appearance and questioning to avoid ambiguity.
4. No summon was adhered to and Arvind Kejriwal did not make an appearance before the Enforcement Directorate, calling into question the legality and political intention behind the summons
5. The Enforcement Directorate arrested Delhi CM under Section 19 of PMLA asserting that he was guilty of money laundering. He was produced before the Special PMLA Court and remanded to ED custody.
6. Kejriwal challenged the arrest before Hon’ble Delhi High court, consenting violation of procedural safeguards and constitutional rights.
7. The Delhi High Court dismissed the petition contending that the arrest made by Enforcement Directorate was lawful and Enforcement Directorate acted within their prescribed authority. Thereafter he approached Supreme Court of India by filing a criminal appeal.

LEGAL ISSUES ~

1. Whether the arrest was made under section 19 complied with statutory requirements.
2. Whether the “reason to believe” were properly recorded and communicated by the Enforcement Directorate.
3. Whether sanction under section 197 CrPC was required at the stage of arrest.
4. Whether the arrest violated section 21 ~ Right to life and personal liberty.
5. Whether political considerations or alleged mala fide intent could disprove the arrest.
6. Whether custodial arrest was justified due to non-compliance with Enforcement Directorate summons.

[3]ARGUMENTS PRESENTED ~

 PETITIONER ~

• Violation of Section 19 under Prevention and Money Laundering Act:

It was humbly argued before the Hon’ble court that the arrest of Arvind Kejriwal was instinctive and lacked proper “reasons to believe”. Section 19 clearly states that the person should be arrested on proper grounds, having material in possession and the arrestee should be mandatorily informed about the grounds of arrest and the authorities should have a “reason to believe”.

• Non-Compliance with the Enforcement Directorate is justified:

The petitioner contended that the custodial interrogation was unlawful and unnecessary, since relevant documents regarding the case were already in Enforcement Directorate’s possession.

• Political Intent:

The time of arrest was near to the general elections, highlighting the mala-fide intention. A criminal proceeding was initiated to suppress the political power of Mr. Arvind Kejriwal.

• Sanction Requirement:

Being a public servant, Arvind Kejriwal appealed that sanctions under section 197 CrPC was evidently required before prosecuting the alleged charges done in discharge of official duties.

• Violation of Article 22 (1):

The appellant contended that the grounds of arrest were not communicated, hence violating article 22(1) of the Indian Constitution.

RESPONDENTS ~

• Mandatory Compliance with Enforcement Directorate:

Under section 19 of the Prevention of Money Laundering Act, compliance with the procedure is mandatory. ED maintained the rules and regulations, recorded reasons in writing and provided the grounds of arrest to the accused.

• Non- Appearance despite repeated summons:

Non-Adherence to the summons issued by the Enforcement Directorate, made custodial interrogation necessary to excavate the larger conspiracy.

• Sanction not required during Arrest:

According to the Enforcement Directorate, sanction under section 197 of CrPC is essential for cognizance and not at the stage of arrest.

• Prima Facie Evidence:

The statements provided by Arvind Kejriwal and financial trails retrieved by ED established a prima facie causal nexus between the crime and accused.

• The ED contends no judicial intervention:

The ED requests no judicial intervention unless an ambiguity exists in legality of the criminal proceedings.

[4]COURTS ANALYSIS~

1. Interpretation of Section 19 under Prevention of Money Laundering Act.

      The court interpreted that an arrest under PMLA, 2002 requires ~

• Existence of material in possession,
• Recording of reasons to believe,
• Due communication of grounds of arrest,
• Production of the accused in front of the magistrate within 24 hrs.

 In the present case, all the prerequisites are completed by ED to proceed with the criminal trial as it was a prima facie demonstration.

2. Communication of Grounds of Arrest.

Article 22 of the Indian Constitution was not violated. The Court recognized that this requirement was satisfied by supplying the grounds of arrest in writing so as to enable the accused to seek bail.

3. Sanction under Section 197 CrPC is justified.

The court highlighted the difference between arrest and investigation and cognizance and prosecution. The Court emphasized that Section 197 CrPC is relevant when court takes cognizance and not when arrest is made.

4. Mala fide allegations.

Allegations regarding political intent should be backed by solid evidence, mere timing of arrest and elections, without concrete proof of abuse of power cannot lead to invalidation of statutory powers and jurisdiction of the Enforcement Directorate.

5. Judicial interference.

The court reaffirmed that judicial intervention will commence only where procedural illegality or constitutional validity is questioned.

JUDGEMENT AND RATIO DECIDENDI

The Supreme Court upheld the judgement of Delhi High court, emphasizing no illegality in the arrest has been established and hence relief against the arrest was declined.

Ratio Decidendi ~

• Arrest made under Section 19 of the Prevention of Money Laundering Ac, 2002 is valid if statutory compliance exists.
• “Reasons to believe” as stated in Section 19 requirements, must be recorded but judicial review is limited to procedural compliance
• Sanction under Section 197 CrPC is not a prerequisite for arrests made under Prevention of Money Laundering Act.
• Political intent in relation to arrest require concrete proof.

IMPLICATIONS OF THE JUDGEMENT.

• The ruling clearly showcases that public office does no grant immunity from arrest under PMLA.
• The judgement is an insightful and concrete precedent expanding powers of the Enforcement Directorate.
• The case highlighted debates on alleged misuse of central agencies and public offices.
• Centre- State dynamics are affected due to arrest of Chief Minister. It weakens the federal relations.

 CONCLUSION.

The case of 2024, Arvind Kejriwal v. Directorate of Enforcement is a landmark precedent establishing that public offices do not provide absolute immunity even highest elected officials are subjected to investigations under the Prevention of Money Laundering Act, simultaneously defining criminal and constitutional jurisprudence.

Furthermore, it clarifies the scope of arrests, power of the Enforcement Directorate, Court’s intervention and procedural safeguards under Section 19 Prevention of Money Laundering Act, 2002. It fosters framework governing money laundering investigations in India.

REFERENCE(S):

[1] Scribd ~ Delhi Excise Policy for the year 2021-22.

[2] Indian Kanoon ~ Arvind Kejriwal vs Directorate of Enforcement on 10 May, 2024.

[3] Supreme Court of India.

[4] ibid