ED Arrest Illegal: Businessman's Arrest Declared Illegal in Money Laundering Case

Mumbai, Jul 25 (PTI) A special PMLA court in Mumbai on Thursday declared the arrest of a 70-year-old businessman in a money laundering case as "illegal" after the Enforcement Directorate (ED) failed to provide him a copy of the document listing "reasons to believe" that he is guilty of the offence.
Special judge AC Dagga, handling cases under the Prevention of Money Laundering Act (PMLA), after perusal of the ED's arrest order, noted the "reasons to believe" had been seen by the accused, Purushottam Mandhana.
However, its copy was not provided to the accused prior to the arrest and even till date, he said.
The ED argued the "reasons to believe" had been submitted before the court in a sealed envelope at the time of the businessman's first remand and the document was not required to be given to the accused because of the nature of certain information contained in it.
The special judge referred to a recent Supreme Court ruling in the Arvind Kejriwal case where the SC observed that "in case certain part of the reasons to believe is not required to be shown to the accused then it is for the court to consider and decide, as to whether a part is required to be withheld or not".
"In this matter, no such application was moved by the prosecution giving an opportunity to decide, as to whether reasons to believe is required to be withheld from the accused. As such, there is no force in the arguments of the prosecutor," the PMLA court noted.
Therefore, the arrest of the accused itself is illegal. It follows that the remand itself is not tenable and the accused is entitled to be set at liberty, the special judge observed.
In its July 12 ruling, the SC held that “reason to believe” for arresting a person under the Prevention of Money Laundering Act must be furnished to the arrestee to enable him to challenge his detention.
A bench of justices Sanjiv Khanna and Dipankar Datta, which granted interim bail to Delhi Chief Minister Arvind Kejriwal in the money laundering case linked to alleged excise policy scam, said section 19 of the PMLA, which gives power to arrest, puts stringent safeguards to protect life and liberty of individuals.
Businessman Mandhana, promoter and chairman of a Palghar-based textile firm, was arrested on July 19 in connection with a Rs 975-crore bank fraud case. He had been remanded to the ED custody till July 25 by the special court.
On Thursday, he was produced before the court at the end of his initial remand.
While the central probe agency sought extension of his remand, Mandhana's lawyer pointed out that his arrest was illegal as he was not provided with a copy of "reasons to believe" that his client was involved in money laundering.