The Hon'ble Supreme Court had a variety of matters to adjudicate upon with respect to the provision of the Code of Criminal Procedure, 1973 ("CrPC") and the Prevention of Money Laundering Act, 2002 ("PMLA") in V. Senthil Balaj Versus The State Represented by Deputy Director and Ors.¹ What was under challenge before the Division Bench were the orders passed by the majority of the Judges when a reference was made on a difference of opinion by the Division Bench of the Madras High Court, while dealing with a Writ Petition filed seeking a writ of Habeas Corpus in pursuance of an arrest made, followed by a remand to the judicial custody, and then back to the Enforcement Directorate.

The appellant, a Cabinet Minister in Tamil Nadu, has been embroiled in a legal battle and is currently accused in a scheduled offense under the PMLA. The Respondent No.1 registered a case against the appellant and others, and subsequently issued multiple summons to him. A search was conducted under the PMLA at the appellant's premises. The appellant was thereafter arrested due to lack of cooperation. Upon arrest, the appellant was immediately taken to a hospital as he complained of chest pain and simultaneously a Habeas Corpus petition was filed by his wife questioning the orders of the Principal Sessions Judge granting both judicial and police remand. The appellant was eventually directed to undergo bypass surgery in a private hospital.

The respondents sought custody of the appellant to the exclusion of hospitalization time. The consequential issue is as to whether Enforcement Directorate would be entitled to seek exclusion of time for the period of hospitalization beyond the first 15 days from the date of initial remand.

Habeas Corpus as a remedy for arrest
A writ of Habeas Corpus shall only be issued when the detention is illegal. As a matter of rule, an order of remand by a judicial officer, culminating into a judicial function cannot be challenged by way of a writ of Habeas Corpus, while it is open to the person aggrieved to seek other statutory remedies.

When there is a non-compliance of the mandatory provisions along with a total non-application of mind, there may be a case for entertaining a writ of Habeas Corpus and that too by way of a challenge.

In a case where the mandate of Section 167 of the CrPC, 1973 and Section 19 of the PMLA, 2002 are totally ignored by a cryptic order, a writ of Habeas Corpus may be entertained, provided a challenge is specifically made. However, an order passed by a Magistrate giving reasons for a remand can only be tested in the manner provided under the statute and not by invoking Article 226 of the Constitution of India, 1950. There is a difference between a detention becoming illegal for not following the statutory mandate and wrong or inadequate reasons provided in a judicial order. While in the former case a writ of Habeas Corpus may be entertained, in the latter the only remedy available is to seek a relief statutorily given. In an arrest under Section 19 of the PMLA, 2002 a writ would lie only when a person is not produced before the Court as mandated under sub- section (3), since it becomes a judicial custody thereafter and the concerned Court would be in a better position to consider due compliance.

Notice to co-operate under Section 41A of the CrPC Vis-a-Vis Section 19 of the PMLA
The provision of Section 41A of the CrPC cannot be termed as a supplement to Section 19 of the PMLA. The PMLA being a sui generis legislation, has its own mechanism in dealing with arrest in the light of its objectives. The concern of the PMLA is to prevent money laundering, make adequate recovery and punish the offender. That is the reason why a comprehensive procedure for summons, searches, and seizures etc., has been clearly stipulated under Chapter V of the PMLA, 2002. An arrest shall only be made after due compliance of the relevant provisions including Section 19 of the PMLA, 2002. Therefore, there is absolutely no need to follow and adopt Section 41A of the CrPC, 1973 especially in the teeth of Section 65 of the PMLA.

Following Section 41A of the CrPC, 1973 for an arrest under the PMLA, 2002 would only defeat and destroy the very inquiry/investigation under the PMLA, 2002. Till summons are issued to a person, he is not expected to be in the know-how. Any prior intimation, other than what is mandated under the PMLA might seriously impair the ongoing investigation. Section 19 of the PMLA postulates the manner in which arrest of person involved in money-laundering can be effected. Subsection (1) of Section 19 envisages that the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Government, if has material in his possession giving rise to reason to believe that any person has been guilty of an offence punishable under the 2002 Act, he may arrest such person.

Besides the power being invested in high-ranking officials, Section 19 provides for inbuilt safeguards to be adhered to by the authorised officers, such as:-

• Recording reasons for the belief regarding the involvement of person in the offence of money-laundering in writing and while effecting arrest of the person, the grounds for such arrest are informed to that person.
• The authorised officer has to forward a copy of the order, along with the material in his possession, in a sealed cover to the Adjudicating Authority, who in turn is obliged to preserve the same for the prescribed period as per the Rules.
• It is also the obligation of the authorised officer to produce the person so arrested before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within twenty-four hours. This production is also to comply with the requirement of Section 167 of the 1973 Code.

There is nothing in Section 19, which is contrary to the requirement of production under Section 167 of the 1973 Code, but being an express statutory requirement under the PMLA in terms of Section 19(3), it has to be complied by the authorised officer.

In light of the aforesaid discussion, an Authorized Officer under the PMLA, 2002 is not duty bound to follow the rigor of Section 41A of the CrPC, 1973 as against the binding conditions under Section 19 of the PMLA, 2002.

Thus, the Supreme Court held that Section 41A CrPC was meant not to be applied to certain categories of offences, including economic offences, but only to minor offences under the Indian Penal Code, 1860.

Interplay between Section 19 of the PMLA and Section 167 of the CrPC
Seeds of liberty are sown in this provision while facilitating further investigation, upon being satisfied that the same cannot be completed within 24 hours. It is not a mere procedural provision but one having an inherent element of substantivity. While facilitating a fair play, it is introduced as a limb of Article 21 and 22(2) of the Constitution of India, 1950.

According to Section 167(1) of the CrPC, when an investigation cannot be finished within 24 hours, the accused must be presented before a Magistrate. The Magistrate has broad discretion in deciding whether to detain the accused. This decision-making process is a judicial function, requiring a well-reasoned order to show careful consideration. The Magistrate determines custody - whether judicial or with an investigating agency - depending on the case.

A maximum custody period of 15 days is allowed, but this should be viewed considering the investigation timeframe specified in the proviso. Section 167(2) of the CrPC authorizes Magistrates to order the detention of the accused. It differentiates between custody (either by the court or an investigating agency) and detention (typically by an investigating agency before court presentation). A custody order from the court can change custody from being judicial to police-based.

When custody transitions from judicial to an investigating agency due to a court order, the custody period starts from the moment the person is produced before the court, taking it away from the agency

Section 19 of the PMLA supplemented by Section 167 of the CrPC provide adequate safeguards to an arrested person. If Section 167 of the CrPC is not applicable, then there is no role for the Magistrate either to remand or otherwise. Such a Magistrate has a distinct role to play when a remand is made of an accused person to an authority under the PMLA. It is his bounden duty to see to it that Section 19 of the PMLA is duly complied with and any failure would entitle the arrestee to get released.

The Magistrate shall also peruse the order passed by the authority under Section 19(1) of the PMLA. Section 167 of the CrPC is also meant to give effect to Section 19 of the PMLA and therefore it is for the Magistrate to satisfy himself of its due compliance. The Magistrate concerned is the appropriate authority who has to be satisfied about the compliance of safeguards as mandated under Section 19 of the PMLA.

Does Section 167(2) of the CrPC restrict a police custody only to the first 15 days of remand?
Section 167(2) of the CrPC does a fine balancing act between the liberty of an individual and a proper investigation. In the present case, admittedly, physical custody has not been given to the respondents. Admission of the appellant to the hospital of his choice cannot be termed as a physical custody in favour of the respondents. Custody could not be taken on the basis of the interim order passed by the High Court allowing him to be sent to a private hospital to undergo a bypass surgery, which certainly would not come in the way of calculating the period of 15 days. An investigating agency is expected to be given a reasonable freedom to do it's part. To say that the respondents ought to have examined the appellant in the hospital, and that too with the permission of the doctors, can never be termed as an adequate compliance. Therefore, the said period of hospitalization when the appellant was not in the custody of the respondents cannot be included in the 15 day limitation.

Summation of law

1. When an arrestee is forwarded to the jurisdictional Magistrate under Section 19(3) of the PMLA no writ of Habeus Corpus would lie. Any plea of illegal arrest is to be made before such Magistrate since custody becomes judicial.
2. Any non-compliance of the mandate of Section 19 of the PMLA, would be to the benefit of the person arrested. For such non- compliance, the Competent Court shall have the power to initiate action under Section 62 of the PMLA.
3. An order of remand has to be challenged only before a higher forum as provided under the CrPC when it depicts a due application of mind both on merit and compliance of Section 167(2) of the CrPC read with Section 19 of the PMLA.
4. Section 41A of the CrPC has got no application to an arrest made under the PMLA.
5. 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.
6. 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.
7. The word "custody" under Section 167(2) of the CrPC shall mean actual custody.
8. 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.

Since the Bench were unable to concur with the views expressed in CBI v. Anupam J. Kulkarni, (1992) 3 SCC 141 to the effect that a police custody shall only be within the first 15 days of remand, the Hon'ble Court directed to place the matter before the Hon'ble Chief Justice of India for appropriate orders to decide the larger issue of the actual import of Section 167(2) of the CrPC as to whether the 15 days period of custody in favour of the police should be only within the first 15 days of remand or spanning over the entire period of investigation - 60 or 90 days, as the case may be, as a whole.

By - Lakshmi Raman