Is "necessity to arrest" a ground to challenge arrest under Section 19 PMLA? Supreme Court in Arvind Kejriwal order

A three-judge bench of the Supreme Court will examine whether an arrest of a person under Section 19 of the Prevention of Money Laundering Act (PMLA) can be challenged on the ground that there was "no necessity to arrest" the person [Arvind Kejriwal v. Directorate of Enforcement].In other words, the Supreme Court will examine whether a person arrested under Section 19 PMLA can challenge the same on the ground that "there was no necessity to arrest".A Division Bench of Justices Sanjiv Khanna and Dipankar Datta framed this issue in its order granting interim bail to Delhi Chief Minister Arvind Kejriwal in the money laundering case connected to the Delhi Excise Policy.The Court framed the following questions while referring the matter for consideration by a larger bench: (a) Whether the “need and necessity to arrest” is a separate ground to challenge the order of arrest passed in terms of Section 19(1) of the PML Act? (b) Whether the “need and necessity to arrest” refers to the satisfaction of formal parameters to arrest and take a person into custody, or it relates to other personal grounds and reasons regarding necessity to arrest a person in the facts and circumstances of the said case? (c) If questions (a) and (b) are answered in the affirmative, what are the parameters and facts that are to be taken into consideration by the court while examining the question of “need and necessity to arrest”?.Section 19 provides that if the ED, on the basis of material in its possession, has "reasons to believe" that any person has been guilty of an offence punishable under PMLA, it may arrest such person.It does not spell out "necessity to arrest" as a ground to challenge an arrest, but only says ED should have "reasons to believe" that the person is guilty.Counsel for Kejriwal had argued that there was no "necessity to arrest" him on March 21, 2024 when the ED had registered the case in August 2022. Further, most of the material relied upon as part of the “reasons to believe” are prior to July 2023, it was pointed out.The ED submitted that the test of “necessity to arrest” was satisfied in view of Kejriwal failing to appear despite the issuance of 9 summons to him. It was also submitted that arrest is a part and parcel of investigation intended to secure evidence, leading to discovery of material facts and relevant information..The Court, after considering the arguments said that though Section 45 PMLA gives primacy to the opinion of the ED when it comes to grant of bail, the agenncy should act uniformly, be consistent in conduct, and have one rule for all.It also said one of the developments in the last decade is acceptance of the principle of proportionality, especially when fundamental rights such as the right to life and liberty are involved.The test of proportionality requires the Court to strike an appropriate balance between the fundamental right of the accused and the pursued public purpose. It requires the Court to examine whether there should have been a less restrictive alternative measure that is equally effective.In view of the above, the Court proceeded to refer the issues concerning 'necessity to arrest' to a larger bench.It also granted interim bail to Kejriwal while clarifying that the larger bench can extend or recall the interim bail..The Court in its order also made it clear that an accused is entitled to challenge his arrest under PMLA, and in such cases, he cannot be denied access to the grounds of arrest."The court to examine the validity of arrest must catechise both the existence and soundness of the “reasons to believe”, based upon the material available with the authorised officer. It is difficult to accept that the “reasons to believe”, as recorded in writing, are not to be furnished...it would be incongruous, if not wrong, to hold that the accused can be denied and not furnished a copy of the “reasons to believe”."Not furnishing the reasons for arrest would in effect prevent the accused from questioning the basis of the same, it was stressed."We are concerned with violation of personal liberty, and the exercise of the power to arrest in accordance with law. Scrutiny of the action to arrest, whether in accordance with law, is amenable to judicial review. It follows that the “reasons to believe” should be furnished to the arrestee to enable him to exercise his right to challenge the validity of arrest"..It further stated that the ED's exercise of power must be lawful."Given that the legislature has prescribed preconditions to prevent abuse and unauthorised use of statutory power, the wielding of such power by an authorized person or authority cannot be conclusive. The exercise of the power and satisfaction of the conditions must and should be put to judicial scrutiny and examination, if the arrestee specifically challenges their arrest. If we do not hold so, then the restraint prescribed by the legislature would, in fact and in practice, be reduced to a mere formal exercise."However, it refused to quash the existing reasons for arrest, given its limited powers in judicial review. It said that the arguments in this regard can be highlighted and relied on during the bail hearings..Kejriwal was arrested by the ED on March 21 in a case alleging that a criminal conspiracy was hatched by Aam Aadmi Party (AAP) leaders, including Manish Sisodia and others, to create loopholes in the Delhi Excise Policy of 2021-22 to favour some liquor sellers.The ED has alleged that the funds garnered from this exercise were used to fund the AAP's election campaign in Goa..The Delhi High Court had earlier rejected Kejriwal's plea against his arrest, prompting him to move the apex court by way of the present appeal.The Supreme Court reserved its verdict in the appeal against the same on May 17, before pronouncing it today.Meanwhile, Kejriwal had by way of a separate plea applied for bail. The trial court had on June 20 granted him bail.However, this order was stayed by the Delhi High Court on June 25..[Read Judgment]