Directorate Of Enforcement vs Subhash Sharma

2025 INSC 141 REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO._______/2025 [@ SPECIAL LEAVE PETITION (CRIMINAL) NO.1136/2023]

DIRECTORATE OF ENFORCEMENT APPELLANT(S)

VERSUS

SUBHASH SHARMA RESPONDENT(S)

J U D G M E N T

ABHAY S OKA J.

1. Leave granted.

2. Heard learned counsel appearing for the appellant.

3. The appellant is the Directorate of Enforcement. By

the impugned order, the High Court has granted bail to

the respondent in connection with an offence punishable

under Section 4 of the Prevention of Money Laundering

Act, 2002 (for short, ‘the PMLA’). The High Court found

that the respondent's arrest was illegal, and on that

Signature Not Verified ground, he was granted bail.

Digitally signed by KAVITA PAHUJA Date: 2025.02.01 14:31:49 IST Reason: 1

4. In paragraph 10 of the impugned judgment, the High

Court has recorded factual findings which read thus:

“From the documents available in the case diary and the aforesaid order, it is crystal clear that the applicant was detained and taken into custody at 18.00 hours (6 pm) on 04.03.2022 at IGI Airport, New Delhi when the Bureau of Immigration executed the LOC issued against the applicant and held him in custody on behalf of ED. It is also not in dispute that ED took physical custody of the applicant from the Bureau of Immigration at 11.00 hours (11 am) at IGI Airport on 05.03.2022 and brought him to Raipur where the ED in the afternoon on 06.03.2022 before the remand Court.” (underline supplied)

5. The submission of the learned counsel appearing for

the appellant is that pursuant to the Look Out Circular

(for short, ‘the LOC’) issued against the respondent, he

was detained at IGI Airport from 11.00 hours, on 5th

March, 2022. But he was shown as arrested at 01.15 hours

on 6th March, 2022 by the appellant Enforcement

Directorate and was produced before the Court of the

learned Magistrate within 24 hours from 1.15 hours on 6 th

March, 2022.

6. This argument cannot be accepted. Admittedly, the

LOC was issued at the instance of the appellant -

Directorate of Enforcement. By executing the LOC, the

Bureau of Immigration detained the respondent at IGI

2 Airport from 4th March 2022 on behalf of the Appellant.

The finding of fact recorded in paragraph 10 is that

undisputedly, the physical custody of the respondent was

taken over by the appellant from the Bureau of

Immigration at 11.00 hours on 5th March, 2022.

Thereafter, at 1.15 hours on 6th March 2022, an arrest

memo was prepared by ED at Raipur. He was produced before

the Court at 3 p.m. on 6 th March, 2024. The perusal of

the arrest order(Annexure p-1) shows that the typed order

was kept ready. The date and time of arrest were kept

blank which appear to have been filled in by hand.

Admittedly, the respondent was not produced before the

nearest learned Magistrate within 24 hours from 11.00

a.m. on 5th March, 2022. Therefore, the arrest of the

respondent is rendered completely illegal as a result of

the violation of clause 2 of Article 22 of the

Constitution of India. Thus, the continuation of the

respondent in custody without producing him before the

nearest Magistrate within the stipulated time of 24 hours

is completely illegal and it infringes fundamental rights

under clause 2 of Article 22 of the Constitution of

India. Therefore, his arrest gets vitiated on completion

of 24 hours in custody. Since there is a violation of

Article 22(2) of the Constitution, even his fundamental

3 right to liberty guaranteed under Article 21 has been

violated.

7. The requirement of clause 2 of Article 22 has been

incorporated in Section 57 of the Code of Criminal

Procedure, 1973 (for short ‘the Cr.P.C). There is no

inconsistency between the provisions of the PMLA and

Section 57 of Cr.P.C. Hence, by virtue of Section 65 of

the PMLA, Section 57 of the Cr.P.C applies to the

proceedings under the PMLA.

8. Once a Court, while dealing with a bail application,

finds that the fundamental rights of the accused under

Articles 21 and 22 of the Constitution of India have been

violated while arresting the accused or after arresting

him, it is the duty of the Court dealing with the bail

application to release the accused on bail. The reason is

that the arrest in such cases stands vitiated. It is the

duty of every Court to uphold the fundamental rights

guaranteed under Articles 21 and 22 of the Constitution.

9. Therefore, when arrest is illegal or is vitiated, bail

cannot be denied on the grounds of non-fulfillment of

twin tests under clause (ii) of sub-section 1 of Section

45 of PMLA.

10. Hence, we find no error in the impugned order, and

accordingly, the appeal is dismissed.

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11. Pending application(s), if any, shall stand disposed

of.

..........................J. (ABHAY S.OKA)

..........................J. (UJJAL BHUYAN)

NEW DELHI;

JANUARY 21, 2025.

5 ITEM NO.14 COURT NO.5 SECTION II-C

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Petition for Special Leave to Appeal (Crl.)No.1136/2023

[Arising out of impugned final judgment and order dated 21-09-2022 in MCRC No. 5288/2022 passed by the High Court of Chhatisgarh at Bilaspur]

DIRECTORATE OF ENFORCEMENT Petitioner(s)

VERSUS

SUBHASH SHARMA Respondent(s)

(IA No. 16672/2023 - EXEMPTION FROM FILING O.T.)

Date : 21-01-2025 This matter was called on for hearing today.

CORAM : HON'BLE MR. JUSTICE ABHAY S. OKA HON'BLE MR. JUSTICE UJJAL BHUYAN

For Petitioner(s) :Mr. Suryaprakash V Raju, A.S.G. Mr. Mukesh Kumar Maroria, AOR Mr. Merusagar Samantaray, Adv.

Mr. Arkaj Kumar, Adv.

Mr. Ashok Panigrahi, Adv.

Mr. B.K. Satija, Adv.

Mr. Annam Venkatesh, Adv.

Mr. Zoheb Hussain, Adv.

Mr. Arvind Kumar Sharma, Aor, Adv.

For Respondent(s) : Mr.Shivam Batra, Adv.

6 UPON hearing the counsel the Court made the following O R D E R Leave granted.

The appeal is dismissed in terms of the signed

Reportable Judgment.

Pending application(s), if any, shall stand disposed

of.

(KAVITA PAHUJA) (AVGV RAMU) ASTT. REGISTRAR-cum-PS COURT MASTER (NSH)

[Signed Reportable Judgment is placed on the file]

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