Supreme Court of India, in its recent ruling, has underscored the importance of strict compliance with Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, for arrests made under the Act. The ruling, delivered by a division bench comprising Justice A S Bopanna and Justice M M Sundresh, holds that any failure to adhere to the provisions of Section 19 would render the arrest itself invalid.

The case in question, titled V. Senthil Balaji v. The State Represented by Deputy Director and Ors., pertained to a challenge mounted by Tamil Nadu Minister Senthil Balaji against his custody by the Enforcement Directorate in connection with a money laundering case. 

The apex court, while dismissing Balaji's plea, emphasized that non-compliance with Section 19 of the PMLA, 2002 would work to the advantage of the arrested individual. It was held that the Competent Court possesses the authority to initiate action under Section 62 of the PMLA, 2002, in response to such non-compliance.

Section 19 of the PMLA, 2002 confers specific powers on authorized officials, such as the Director, Deputy Director, or Assistant Director, to arrest individuals suspected of committing offenses under the Act, provided they have reasonable grounds to believe that the person has engaged in such offenses. Crucially, the reasons for arrest must be documented in writing, and the arrested person must be promptly informed of the grounds for their arrest.

Furthermore, the law stipulates that after an arrest is made, the arresting official is obligated to transmit a copy of the order and pertinent materials to the Adjudicating Authority in a sealed envelope. This requirement, outlined in Section 19(2), serves to ensure transparency and accountability in the arrest process.

The apex court's ruling also highlighted the imperative for an arrested person to be brought before a Special Court, Judicial Magistrate, or Metropolitan Magistrate within twenty-four hours of their apprehension, as per Section 19(3) of the Act.

The court expounded that the very act of arrest is contingent upon an authorized officer assessing and evaluating the available evidence to form a reasoned belief that an offense punishable under the PMLA, 2002 has been committed. Subsequently, upon effecting an arrest, the officer is mandated to record the reasons for the arrest and communicate them to the arrestee. The failure to adhere to the procedural mandate outlined in Section 19(1) of the PMLA, 2002, was deemed by the court as sufficient grounds to invalidate the arrest.

Moreover, the court emphasized the pivotal role of the Magistrate in upholding the integrity of the arrest process. The Magistrate is entrusted with the responsibility of ensuring that the provisions of Section 19 are rigorously complied with. Failure to meet these obligations would entitle the arrestee to immediate release. The court highlighted the interplay between Section 167 of the Criminal Procedure Code, 1973 and Section 19 of the PMLA, 2002, noting that the Magistrate's role extends to scrutinizing the compliance of safeguards mandated by the latter.

In conclusion, the Supreme Court's recent ruling underscores the critical significance of adhering to the procedural stipulations of Section 19 of the PMLA, 2002, for effecting valid arrests under the Act. This decision reiterates the courts' commitment to upholding due process and ensuring that the rights of the accused are safeguarded throughout legal proceedings

Case Details:

Title: V. SENTHIL BALAJI V. THE STATE REPRESENTED BY DEPUTY DIRECTOR AND ORS.
Criminal Appeal Nos.: 2284-2285 of 2023