Bombay High Court: PMLA arrest on material already before the court for a statement is illegal

The Bombay High Court declared the arrest of a businessman by the Enforcement Directorate under the Prevention of Money Laundering Act, 2002 illegal and in violation of Section 19(1) of the PMLA and Articles 14 and 21 of the Constitution, and ordered his immediate release. Justice Milind N. Jadhav held that once the ED had already placed material before the Special Court under Sections 50(2) and 50(3) of the PMLA to confront the petitioner and record a further statement, and the court had permitted that course, the ED could not simultaneously invoke Section 19 to arrest him on the very same material without any fresh or supervening circumstance.

Following the Supreme Court's rulings in Arvind Kejriwal v. Enforcement Directorate, Pankaj Bansal v. Union of India, Prabir Purkayastha v. State (NCT of Delhi) and Vijay Madanlal Choudhary v. Union of India, the Court reaffirmed that the power to arrest without a warrant under Section 19 is a drastic power hedged with safeguards, including that the authorised officer must have material, form a written opinion that there is reason to believe the person is guilty, and communicate the grounds of arrest; courts can judicially review the legality of an arrest to ensure these safeguards were not bypassed.