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The Power of Judicial Review Shall Prevail: Analyzing the Supreme Court's Judgement on Arvind Kejriwal's Arrest under PMLA

Updated: Jul 15

Summary of the Judgement


  • Case Name: Arvind Kejriwal vs Directorate of Enforcement

  • Date: 12th July 2024

  • Judges: Honorable Justice Sanjiv Khanna

  • Acts and Sections Involved: Prevention of Money Laundering Act, 2002 (PMLA) - Section 19 Code of Criminal Procedure, 1973 (CrPC) - Section 482 Indian Penal Code, 1860 (IPC) - Section 120B, Section 477A Prevention of Corruption Act, 1988 - Section 7

  • Cited Judgements: Pankaj Bansal v. Union of India and others, 2023 SCC Online SC 1244 Vijay Madanlal Choudhary and others v. Union of India and others, 2022 SCC OnLine SC 929 V. Senthil Balaji v. State and others, 2024 SCC Online SC 51 Tarsem Lal v. Directorate of Enforcement, Jalandhar Zonal Office, 2024 SCC Online SC 971 Prabir Purkayastha v. State (NCT of Delhi), 2024 SCC OnLine SC 934 Roy V.D. v. State of Kerala, 2000 SCC 8 590

Introduction


The judgement delivered by Honorable Justice Sanjiv Khanna in the case of Arvind Kejriwal vs Directorate of Enforcement (DoE) addresses significant legal questions surrounding the legality of arrests under Section 19 of the Prevention of Money Laundering Act, 2002 (PMLA). The case emerged from an appeal against a Delhi High Court decision, which upheld the arrest and remand of Arvind Kejriwal by the Directorate of Enforcement. This article delves into the critical aspects and implications of the judgement, providing insights for legal professionals in India.

Case Background


The appeal challenges the judgement and order dated 9th April 2024, by the High Court of Delhi, which rejected Arvind Kejriwal's writ petition challenging his arrest by the Directorate of Enforcement. The arrest was based on alleged violations of Section 19 of the PMLA, related to a broader investigation initiated by the Central Bureau of Investigation (CBI) involving charges of conspiracy and corruption under IPC and the Prevention of Corruption Act.

Legal Issues Addressed


The Supreme Court's analysis focused on several pivotal issues:

  1. Scope and Ambit of Section 19 of PMLA: The Court examined whether the arrest under Section 19 of the PMLA complied with the statutory requirements, specifically the necessity for the Directorate to have "reasons to believe" that the accused is guilty of an offence under the Act.

  2. Judicial Review of Arrests: A significant aspect of the judgement is the assertion that courts have the authority to scrutinize the legality of arrests under Section 19, ensuring compliance with both statutory and constitutional mandates.

  3. Interpretation of "Reasons to Believe": The Court elucidated the interpretation of "reasons to believe" as required under Section 19, emphasizing that this belief must be founded on objective material and not merely on suspicion.

Key Judgement Points


1. Stringent Safeguards in Section 19:

Honorable Justice Sanjiv Khanna highlighted that Section 19 of the PMLA provides stringent safeguards to prevent arbitrary arrests. The conditions include:

  • Possession of material by the officer.

  • Recording of "reasons to believe" in writing.

  • Informing the arrestee of the grounds of arrest.

These safeguards ensure that the life and liberty of individuals are protected against arbitrary actions by the authorities.

2. Judicial Review and Constitutional Mandate:

The Court underscored that judicial review of arrests under Section 19 is essential to uphold the constitutional rights of individuals. The arresting authority must demonstrate compliance with the statutory preconditions. The judgement asserts:

"The power of judicial review shall prevail, and the court/magistrate is required to examine that the exercise of the power to arrest meets the statutory conditions."

3. Interpretation of "Reasons to Believe":

In interpreting "reasons to believe," the Court referred to several precedents, including Pankaj Bansal and Prabir Purkayastha cases, reiterating that the belief must be based on objective facts and material. It was stated that:

"Suspicion is much less than belief; belief includes or absorbs suspicion. The belief must be held in good faith; it cannot merely be a pretence."

4. Difference between Grounds of Arrest and Reasons to Believe:

The Court distinguished between the "grounds of arrest" which must be communicated to the arrestee and the "reasons to believe" which form the internal basis for the arrest. This distinction ensures that the arrestee is informed of the specific allegations while protecting sensitive investigative details.

Implications for Legal Practice


This judgement has profound implications for legal practitioners in India, particularly in cases involving the PMLA. Key takeaways include:

  • Enhanced Scrutiny of Arrests: Lawyers must ensure that any arrest under Section 19 of the PMLA adheres strictly to the statutory safeguards. Failure to do so could render the arrest invalid.

  • Documentation and Transparency: Practitioners should advise clients on the importance of maintaining proper documentation and transparency in all stages of the investigative process to avoid arbitrary arrests.

  • Preparation for Judicial Review: Legal professionals must be prepared to challenge arrests by scrutinizing the "reasons to believe" recorded by the authorities, ensuring that these are based on solid, objective material.

Conclusion


The judgement in Arvind Kejriwal vs Directorate of Enforcement reinforces the need for stringent adherence to statutory requirements when exercising the power of arrest under the PMLA. By upholding judicial scrutiny and emphasizing the need for objective "reasons to believe," the Supreme Court has provided a robust framework to safeguard individual rights against arbitrary state actions. Legal professionals in India must heed these principles to ensure justice and due process in cases involving economic offences.

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