High Court: Arrest of Roop Bansal in M3M money laundering case is illegal
Chandigarh, October 31
Nearly six months after Roop Bansal, one of the directors of M3M group of companies, was arrested in a case under the Prevention of Money Laundering Act (PMLA), the Punjab and Haryana High Court has held his arrest as illegal. Among other things, the Bench made it clear that the arrest could not be sustained following the non-conveying of the grounds of arrest in writing.
Allowing the petition, the Bench of Justice Arun Palli and Justice Vikram Aggarwal also made it clear that his arrest and subsequent orders remanding him to the custody of the Enforcement Directorate (ED) could not be sustained.
The Bench also set aside the arrest order dated June 8, along with remand orders dated June 9, June 16 and June 20, before directing his release forthwith, unless his custody was required in connection with any other case. Bansal was represented, among others, by senior advocates Abhishek Manu Singhvi, Randeep S Rai, Chetan Mittal and Aashish Chopra.
The Bench observed that certain FIRs were registered from 2018 to 2020 with different law enforcement agencies –– Haryana Police, Delhi Police and Delhi EOW –– for cheating and other offences under Sections 120-B, 420, 467, 471 of the IPC against M/s IREO Private Limited and others at the instance of allottees of the residential projects developed by the IREO group.
The ED subsequently recorded an enforcement case information report to investigate the offence of money laundering. It was allegedly found during the further course of investigation that in addition to identified ‘proceeds of crime’ of Rs 1,376 crore, IREO group had further diverted its funds of more than Rs 400 crore through M3M Group of Companies.
Referring to Section 19 of the PMLA, the Bench observed the Supreme Court had categorically held in the case of Pankaj Bansal versus the Union of India and others that the grounds of arrest would have to be conveyed in writing.
The Bench added the remand orders also did not clear the test laid down by the apex court and Section 19 of the PMLA. The court concerned did observe that all mandatory provisions had been complied with. But the orders, especially the first order of remand dated June 9, did not mention the court had perused the grounds of arrest to ascertain whether the ED had recorded reasons to believe that the petitioner was guilty of an offence under the PMLA and there was proper compliance with the mandate of Section 19.
“In any case, once the arrest itself is held to be illegal, all other subsequent actions would be of no consequence and would have to fail,” the Bench added.
