Vikas Bansal vs. Directorate Of Enforcement

Held

The Court held that the arrest of the petitioner under Section 19 of the PMLA, 2002, was not in violation of statutory provisions. The Court found that the Arresting Officer was authorized under Section 19(1) of the PMLA, and the 'reasons to believe' that the petitioner was guilty of money laundering offenses were based on material in possession. The Court also found that the petitioner was informed about the grounds of arrest soon after his arrest. Regarding the remand order, the Court held that the Judicial Magistrate had territorial jurisdiction to grant the remand, as the ECIR was registered in the Shimla Zonal Office and the Magistrate was exercising the powers of the Sessions Judge during the winter vacation. The Court reiterated that in exercise of its power of judicial review under Article 226, it cannot go into the legality of a judicial order, including a remand order, except for specific exceptions. The Court found that statutory safeguards were properly complied with, and the 'reasons to believe' clearly spelled out the petitioner's involvement in generating Proceeds of Crime through false claims and the acquisition of immovable properties using such proceeds. Therefore, the petition was dismissed.

Facts

The petitioner, Vikas Bansal, Vice Chairman of Himalayan Group of Professional Educational Institutions, challenged his arrest under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, and subsequent remand orders. An FIR was registered by CBI in 2019 concerning alleged fraud in the Post-Matric Scholarship Scheme. The Directorate of Enforcement (ED) recorded an ECIR in 2019 based on this FIR. The petitioner was arrested by ED on January 30, 2025, after an earlier arrest by CBI in April 2022 for which he was granted bail. The petitioner alleged illegal arrest and demanded a bribe by an ED officer, leading to a separate CBI FIR. He also claimed the arrest was an act of vengeance. The petitioner sought to set aside his arrest and remand orders, arguing violations of PMLA and BNSS provisions.

Key Issues

1. Whether the arrest of the petitioner under Section 19 of the PMLA, 2002, was in violation of statutory provisions, including the PMLA and BNSS? 2. Whether the remand order dated January 30, 2025, and subsequent orders extending the petitioner's custody were illegal? Petitioner's Arguments: The petitioner contended that his arrest was illegal and in flagrant violation of statutory provisions. He argued that the ED officer demanded a bribe, leading to a CBI FIR, and his arrest was an act of vengeance. He also questioned the territorial jurisdiction of the Magistrate who granted the remand, as the Special Court was not functioning due to winter vacations. He relied on the principle that High Courts can interfere in cases of illegal arrest and detention. Respondent's Arguments: The respondent (Directorate of Enforcement) argued that the arrest and remand were lawful. They contended that the arrest was made by an authorized officer under Section 19(1) of the PMLA based on 'reasons to believe' that the petitioner was guilty of money laundering offenses. They asserted that the petitioner was informed of the grounds of arrest and that the Magistrate had the territorial jurisdiction to grant remand, especially given the unavailability of the Special Court. They emphasized that the sufficiency of material for arrest and the correctness of facts forming the basis of belief cannot be re-examined by the High Court in its writ jurisdiction, as per Supreme Court pronouncements.