( 2025:HHC:16769 )

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

CWP No. 3600 of 2025

Reserved on: 22.04.2025
Decided on: 30.05.2025
Vikas Bansal .…Petitioner.

Versus
Directorate of Enforcement through its Deputy
Director, Shimla …Respondent.
Coram:
The Hon’ble Mr. Justice Ajay Mohan Goel, Judge.
Whether approved for reporting?1 Yes.

For the petitioner: Mr. Randeep S. Rai, Senior Advocate, with M/s
Vikrant Thakur, Anurag Arora, Rubina Virmani and
Shubham Guleria, Advocates.
For the respondent: Mr. Zoheb Hussain, Special Counsel for
Enforcement Directorate (through Video
Conferencing), with Mr. Ajit Singh Saklani, Retainer
Counsel and M/s Suradhish Vats, Pranjal Tripathi &
Ilma Khan, Advocates.

Mr. Rajeev Kumar, Assistant Director, in person.

Ajay Mohan Goel, Judge:

By way of this writ petition, the petitioner has prayed for

the following reliefs:-

“1. Issuance of a writ in the nature of

Certiorari or any other appropriate writ/ direction/
order, to:-
I. Set aside the arrest of the present
petitioner u/s 19 of PMLA Act (Annexure P-7), which
is in blatant and flagrant violation of the statutory
1 Whether reporters of the local papers may be allowed to see the judgment?
 2 ( 2025:HHC:16769 )

provisions enshrined in BNSS & PMLA.

II. Further to set aside the remand order
dated 30.01.2025(Annexure P-14) and all other
subsequent orders passed by the Ld. Special court,
Shimla for extending the custody of the petitioner.
2. Issue any other order, writ or direction as
this Hon'ble Court may deem fit in accordance with
the peculiar and circumstances of the case.
3. Exempt the Petitioner from filing the
Certified/true typed/photocopies / more legible copies
of the annexures.
4. Summon the entire record pertaining to
the case, if this Hon'ble Court deems fit and proper.
5. Service of advance notices upon the
Respondent Department be also be dispensed with;
6. Award cost of thee petition in favour of
the petitioner and against the respondents.”

2. The case of the petitioner is that an FIR bearing No.

RC0962019A0002 was registered by the Central Bureau of Investigation

(CBI) on 07.05.2019, for commission of offences punishable under Sections

409, 419, 465, 466 and 471 of the Indian Penal Code against unknown

persons.

3. After the lodging of FIR, CBI conducted searches and

seizure at 22 educational institutions, including the Himalayan Group of

Professional Educational Institutions and Apex Group of Educational

Institutions, which had applied for and received financial assistance under

the Post-Matric Scholarship Scheme for Scheduled Caste (SC), Scheduled

 3 ( 2025:HHC:16769 )

Tribe (ST) and Other Backward Classes (OBC) students in State of

Himachal Pradesh. The petitioner was serving as Vice Chairman of the

Himalayan Group of Professional Educational Institutions at Kala Amb,

District Sirmaur. In the course of investigation, the petitioner was arrested by

the CBI on 8th of April 2022. He was enlarged on bail by this High Court in

Cr.MP(M) No. 856 of 2022, dated 09.05.2022 (Annexure P1). After

conclusion of the investigation, multiple Charge Sheets were filed by CBI

before learned Special Judge (CBI), Shimla. The petitioner was arrayed as

an accused along with eight other individuals and challan was presented

before the Court of learned Special Judge (CBI), Shimla, on 18.04.2022.

Charges have been framed against the petitioner under Section 120-B read

with Sections 409 and 471 of the Indian Penal Code along with Section

13(2) read with Section 13 (1)(c) and (d) of the Prevention of the Corruption

Act, 1988.

4. Zonal Office of the Directorate of Enforcement recorded

an Enforcement Case Information Report (ECIR) bearing No.

ECIR/SHSZO/04-2019 on 19.07.2019, pursuant of the lodging of the FIR

referred hereinabove. The ECIR was based on predicate offence, allegedly

committed by the accused. Thereafter, the respondent filed a prosecution

complaint, dated 21.10.2023, before learned Special Court, under the

Prevention of Money Laundering Act, at Shimla. The Court has taken

cognizance of the said complaint against the accused persons named

therein on 23.04.2024. Further as per the petitioner, the respondent

 4 ( 2025:HHC:16769 )

conducted searches under Section 17 of the PMLA on 29.08.2023 at various

premises associated with the petitioner. This included the residential

premises of his brother, Rajnish Bansal, who was the Chairman of the

Himalayan Group of Profession Educational Institutions and Apex Group of

Institutions. Certain documents were seized by the respondents in the

course of the search. As per the petitioner, he was summoned only once on

5.11.2019 by the then Investigating Officer, namely, Vishal Arya. Petitioner

fully cooperated with the investigation, disclosed all facts within his

knowledge and his statement was recorded under Section 50 of the PMLA.

Thereafter, no summons were issued to the petitioner or received by him

until 30.01.2024, on which date, he was arrested by the officers of the

respondent in an illegal manner.

5. It is further the case of the petitioner that in the year

2024, the investigation was assigned to Vishal Deep, Assistant Director,

Enforcement Directorate. Said officer started abusing his official position and

unlawfully demanded a bribe of Rs.60.00 Lac from petitioner’s brother

Rajnish Bansal, under the threat of arresting him. Rajnish Bansal refused to

oblige Vishal Deep and reported the matter to the Central Bureau of

Investigation. Upon verification of the allegations, CBI registered FIR No.

RC0052024A0034, dated 22.12.2024, under Section 7(a) of the Prevention

of Corruption Act, 1988 (hereinafter to be referred as the “the PC Act”).

Thereafter, a trap was laid following the recording of the incriminating

conversations between Rajnish Bansal and Vishal Deep. However, during

 5 ( 2025:HHC:16769 )

the trap operation, Vishal Deep managed to evade the arrest and fled from

the scene. Subsequent investigation led to the recovery of money from one

Yash Deep, a close associate of Vishal Deep, to whom, he had handed over

the bribe amount while escaping. Besides this, one more FIR was

registered against Vishal Deep on the complaint of one Bhupender Sharma,

i.e. FIR No. RC0052024A0033, dated 22.12.2024, under Section 74A of the

PC Act at Police Station, CBI, ACB, Chandigarh. Copies of said two FIRs

are appended with the writ petition as Annexures P-2 and P-3 respectively.

As per the petitioner, during the course of investigation, CBI arrested Vishal

Deep. Investigation revealed the involvement of other individuals, leading to

filing of a charge sheet against four accused, namely, Vishal Deep, the

investigating Officer of the present ECIR, Balbir Singh, the investigating

officer of the CBI in the Scholarship scam case, Vikas Deep, brother of

Vishal Deep and one Neeraj. According to the petitioner, Vishal Deep even

after his arrest did not cease unlawful activities and he engaged a gangster,

namely, Rohit Gujjar, who subsequently demanded an additional amount of

Rs.50.00 lac from the petitioner. Petitioner lodged FIR No. 6, dated

09.01.2025, at Police Station Sector 14, Panchkula and Vishal Deep was

arrested in the said case. (Copy of the FIR registered in this connection is

appended with the petition as Annexure P-4). As per the petitioner, as an

act of vengeance, firstly vide Annexure P-6, dated 29.01.2025, he was

issued a summon by Rajeev Kumar, Assistant Director, Directorate of

Enforcement, Ministry of Finance, Government of India, Shimla, under

 6 ( 2025:HHC:16769 )

Sections 15(2) and (3) of the PMLA, directing him to appear before the said

officer on 30.01.2025 at 1:00 PM at Shimla, to give evidence in connection

with the investigation/proceedings going on against him under the PMLA,

but on 30.01.2025, the ED officials entered his house at Panchkula, at about

7:35 a.m., where said summon was handed over to the petitioner for his

appearance at Shimla at 1:00 p.m. After the ED officials left the house of the

petitioner at around 8:12 am, a search was commenced in the house of the

petitioner by the ED at around 8:40 a.m. on 30.01.2025 and he was not

allowed to move outside. Thereafter, at around 3:30 p.m, Rajeev Kumar,

Assistant Director, entered the house of the petitioner and approximately at

4:00 p.m., the petitioner was unlawfully arrested without any prior recording

or documentation of his statement. According to the petitioner, the search

and seizure was done with malafide intent and in complete violation of his

legal rights. No due process was followed before effecting his arrest. Copy

of the arrest order, arrest memo and grounds of arrest alongwith reasons to

believe and panchnama are placed on record as Annexures P-7 to P-11.

6. Learned Senior Counsel for the petitioner argued that the

arrest of the petitioner on 30.01.2025, besides being an act of vengeance,

was in complete derogation of the provisions of Section 19 of the PMLA.

Learned Senior Counsel argued that after the complaint was filed against

the petitioner under the PMLA, from the year 2019 up to the date of his

arrest, he was called for the purpose of investigation only once. The

petitioner not only fully participated in the investigation, but he fully

 7 ( 2025:HHC:16769 )

cooperated in the same. He submitted that it is not understood what

transpired in between 29.01.2025 and 30.01.2025, that the respondents

without allowing the petitioner to respond to the notice dated 29.01.2025,

arrested him on 30.10.2025 abruptly. Learned Senior Counsel further

submitted that the procedure prescribed in Section 19 of the PMLA is

sacrosanct and any violation thereof cannot cure the arrest of an accused.

In the present case, he submitted that as there was flagrant violation of the

statutory provisions of Section 19 of the PMLA, therefore, the arrest per se

was bad in law. Learned Senior Counsel took the Court through the grounds

of arrest and submitted that perusal thereof demonstrates that the emphasis

therein also was on the predicate offences and not on the offences alleged

to have been committed by the petitioner under the PMLA. Learned Senior

Counsel submitted that the arresting officer did not reduce in writing that on

the basis of what material in his possession, he had ‘reasons to believe’ that

the petitioner was ‘guilty’ of the offences punishable under the PMLA.

Learned Senior Counsel further submitted that even the Judicial Magistrate

before whom the petitioner was produced, despite recording the shortfall in

the mode and manner in which the petitioner was arrested by the

respondent erred in not returning the findings that the arrest of the petitioner

was in violation of Section 19 of the PMLA and he further erred in remanding

the petitioner to custody. Learned Senior Counsel for the petitioner also

argued that the remand granted by the learned Chief Judicial Magistrate,

Shimla was bad in law, as said Court was not a Special Court under the
 8 ( 2025:HHC:16769 )

PML Act and, therefore also, the custody of the petitioner is illegal. As per

learned Senior Counsel, learned Judicial Magistrate was not having any

jurisdiction to deal with the matter and the grant of remand by the learned

Judicial Magistrates is void ab initio.

7. On the other hand learned Counsel for the respondent-

ED argued that neither there was any illegality committed by the Arresting

Officer in the course of arrest of the petitioner nor the petition against the

order passed by the learned Judicial Magistrate was maintainable as

remand order could not be interfered by this Court under Article 226 of the

Constitution of India and incidentally, the petitioner had not invoked the

provisions of Section 482 of the Criminal Procedure Code in the matter.

Learned Counsel further argued that the petitioner, in connivance with the

officers of the State Government Education Department as well as Bank

Officer, had misappropriated scholarship funds to the tune of Rs.200 Crore

along with other accused, which were meant for deserving students

belonging to Scheduled Caste, Scheduled Tribe and Other Backward

Classes communities. The petitioner was the Vice chairman in the Apex

Group of Institutions as well as Himalayan Group of Professional

Educational Institutions. He had signed the claim letter and forwarded the

claim letters and verified the claim details of the students of said two

institutions to the Director of Higher Education for the purpose of disbursal

of the scholarship in the name of bogus Scheduled Caste/Scheduled

Tribe/OBC students. Learned Counsel further submitted that a perusal of the

 9 ( 2025:HHC:16769 )

‘reasons to believe’ clearly demonstrates that Arresting Officer, who was

duly authorized officer under Section 19(1) of the PMLA, elaborately

referred to the material available with him, which clearly proved the

involvement of the petitioner in the predicate offence as well as offences

under PMLA. He argued that there was no violation of the provisions of

Section 19 of the PMLA and the same were followed sacrosanctly. He

submitted that provisions of Section 19(1) of the PMLA were religiously

followed by the Arresting Officer and in light of the law declared by Hon’ble

Supreme Court of India, as this is not the fora where the satisfaction of the

Arresting Officer is to be tested on merit as the, arrest of the petitioner was

strictly as per the statutory provisions, the petition deserves to be dismissed.

Learned Counsel also argued that the ‘reasons to believe’ elaborately

spelled out the involvement of the petitioner in the crime which was self

explanatory. He submitted that the reason as to why the petitioner had to be

arrested forthwith on 30.01.2025 was that there was information with the

Arresting Officer that the petitioner was destroying material evidence which

was with him and therefore, to ensure that the evidence was not destroyed,

this step was taken by the Arresting Officer. Learned Counsel further

submitted that the Arresting Officer also consulted his superior officers as

was evident from the record and this also demonstrated the transparency in

the arrest of the petitioner. Learned Counsel further submitted that the

submission made in the petition with regard to demand of bribe etc. against

other officers does not render the arrest of the petitioner bad in law for the
 10 ( 2025:HHC:16769 )

reason that the Department had already initiated necessary legal action

against the persons who demanded bribe etc. and this otherwise also

cannot be a ground to release the petitioner by setting aside the order of

arrest. Learned Counsel also argued that as the petitioner presently was in

custody on account of a judicial order passed by a Court of law, therefore, in

terms of the law declared by Hon’ble Supreme Court of India, as a judicial

order was not to be interfered under Article 226 of the Constitution of India,

the petition deserves to be dismissed. Responding to the contention of

learned Senior Counsel for the petitioner that the remand granted by the

learned Chief Judicial Magistrate was without jurisdiction, learned counsel

for the respondent submitted that the petitioner was arrested on 30.01.2025.

Vide Notification No. DSJ-E-SML-Vacation-2025-738, dated 15.01.2025, the

High Court of Himachal Pradesh notified the winter vacations for the District

Judiciary from 20.01.2025 to 16.02.2025. Vide Notification dated

15.01.2025, it was stated that urgent matters pertaining to District &

Sessions Judge, Shimla will be handled by the Senior Civil Judge-Cum-

Chief Judicial Magistrate, Shimla, i.e., the Chief Judicial Magistrate, who

passed the remand order. Learned counsel further submitted that as the

validity of the Notification was not under challenge, therefore, the source of

power cannot be questioned. Learned counsel further submitted that

otherwise also, in terms of the statutory provision, in the absence of the

Special Judge, who was on vacation, the remand could have been taken

from the Judicial Magistrate in terms of Sub-section (3) of Section 19 of the

 11 ( 2025:HHC:16769 )

PMLA, 2002 and the Judicial Magistrate, who granted the custody, was

having jurisdiction in the matter, as the ECIR was registered at Shimla.

Learned counsel also submitted that in terms of the law laid down by the

Hon’ble Supreme Court in Rana Ayyub Vs. Directorate of Enforcement,

2023 SCC OnLine SC 109, Enforcement Department has the choice to file

the prosecution complaint at every such place where the offence had been

committed and the act of the Enforcement Department to produce the

petitioner before the concerned Judicial Magistrate was in compliance with

the provisions of Article 22 (2) of the Constitution of India, which requires

production of an accused within 24 hours of his arrest.

8. I have heard learned Senior Counsel for the petitioner as

well as learned Special Counsel for the respondent and have also carefully

gone through the pleadings as well as documents appended therewith.

9. Primarily, the issue before the Court is whether the

provisions of Section 19(1) of the 2002 Act have been followed in letter and

spirit by the Arresting Authority in the course of arrest of the petitioner or

not. Section 19 of the Act reads as under:-

“19. Power to arrest.- (1) If the Director,

Deputy Director, Assistant Director, or any other
officer authorized in this behalf by the Central
Government by general or special order, has on the
basis of material in his possession reason to
believe (the reason for such belief to be recorded in
writing) that any person has been guilty of an
 12 ( 2025:HHC:16769 )

offence punishable under this Act, he may arrest

such person and shall, as soon as may be, inform
him of the grounds for such arrest.
(2) The Director, Deputy Director, Assistant
Director or any other officer shall, immediately after
arrest of such person under Sub-section (1),
forward a copy of the order, alongwith the material
in his possession, referred to in that sub-section, to
the Adjudicating Authority, in a sealed envelope, in
the manner, as may be prescribed and such
Adjudicating Authority shall keep such order and
material for such period, as may be prescribed.
(3) Every person arrested under sub-
section (1) shall within twenty-four hours, be taken
to a Special Court or Judicial Magistrate or a
Metropolitan Magistrate, as the case may be,
having jurisdiction:
Provided that the period of twenty-four
hours shall exclude the time necessary for the
journey from the place of arrest to the Special
Court or Magistrate’s Court.”

Thus, in terms of Sub-section (1) of Section 19 of the Act, if the Officer

mentioned therein or any authorized officer in this behalf by the Central

Government, by general or special order, has on the basis of material in his

possession, ‘reason to believe’ (the reason for such belief is to be recorded

in writing) that any person has been ‘guilty’ of an offence punishable under

this Act, he may arrest such person and shall, as soon as may be, inform

him of the grounds for such arrest.

 13 ( 2025:HHC:16769 )

10. The ‘reasons to believe’ and ‘grounds of arrest’ are

appended with the counter-affidavit/reply filed on behalf of the Directorate of

Enforcement. The ‘reasons to believe’ are appended as Annexure A-1 and

the ‘grounds of arrest’ are appended as Annexure A-2. The copy of the

arrest order is appended with the response as Annexure A-3, perusal

whereof demonstrates that the ‘Arrest Order’ and ‘Arrest Memo’ were duly

supplied to the petitioner. The ‘Intimation of Arrest’ is also on record and the

intimation was given on 30.01.2025 itself to the wife of the petitioner.

11. The ‘reasons to believe’ mention, inter alia, that an FIR

was registered on 07.05.2019 under Sections 409, 419, 465,466 and 471 of

the Indian Penal Code against unknown persons. CBI conducted searches

and seizures at 22 private institutions, including Himalayan Group of

Professional Institutions and Apex Group of Institutions, which had applied

and received Post Matric Scholarship Scheme for SC/ST/OBC students of

Himachal Pradesh. Vikas Bansal was arrested by the Central Bureau of

Investigation on 08.04.2022 during the course of investigation. He was

released on bail by this Court on 09.05.2022, subject to fulfilment of certain

conditions. Challan No. 4 in the said FIR was filed on 18.04.2022 by the

Central Bureau of Investigation under Section 120-B read with Sections 409

and 471 of the Indian Penal Code and under Section 13(2) read with

Section 13(1)( c) and (d) of the Prevention of Corruption Act, 1988, in which,

Rajnish Bansal, Chairman of Apex Group of Professional Institutions, Indri,

Karnal and six others were arrayed as accused. Challan No. 5 in the
 14 ( 2025:HHC:16769 )

aforesaid FIR was filed on 18.04.2022 by the CBI under Section 120-B read

with Sections 409 and 471 of the Indian Penal Code and under Section

13(2) read with Section 13(1)( c) & (d) of the Prevention of Corruption Act,

1988, in which, Vikas Bansal, being Vice-Chairman of Himalayan Group of

Professional Institutions, Kala Amb, Sirmaur, H.P. and eight others,

including Rajnish Bansal, Chairman of Himalayan Group of Professional

Institutions, Kala Amb, Sirmaur, H.P. were arrayed as accused.

12. Charge-sheet filed by CBI against Himalayan Group of

Professional Institutions reads as under:-

“(a) That HGPI is managed by Maa Saraswati

Educational Trust registered at Sirmaur, Himachal
Pradesh;
(b) That Vikas Bansal, Rajnish Bansal and
Panna Lal were the Vice Chairman, Chairman and
Registrar of HGPI respectively;
(c ) That verification of 970 B. Tech. students
affiliated to Himachal Pradesh Technical
University. Hamirpur revealed that fake
scholarship amounting to Rs.5.58 Crore were
claimed qua 734 students.
(d) That verification of 71 students of five-year
Law Course affiliated to Himachal Pradesh
University (HPU) revealed that 10 students did not
appear in the examination & record of 20 students
was not found;
(e ) Verification of three-year Law Course
revealed that 03 students did not appear in the
 15 ( 2025:HHC:16769 )

examination and record of 05 students was not

found;
(f) The CBI examined 26 SC Students who
stated that their mobile numbers mentioned in HP-
e Pass did not belong to them and they have not
opened bank accounts in OBC (now PMB) and
also that they did not authorize anybody to
transfer/withdraw the scholarship amount from
their accounts;
(g) Also out of the aforesaid 26 SC Students,
16 students were shown as student during the
academic Session 2016-17;
(h) That at the time of admission in different
streams, the signatures of students belonging to
SC/ST/OBC category who were also eligible to
take benefit of scholarship were appended on
blank account opening forms and some blank
debit vouchers/cheques in the campus of
Himalayan Group;
(i) That the Institute claimed a total 4523
scholarship claims for 2455 students amounting to
Rs.36,66,48,733/-.”

13. Charge-sheet filed by CBI against Apex Group of

Professional Institutions reads as under:-

“(a) That AGPI is managed by People

Welfare Education Trust registered at Karnal,
Haryana.
 16 ( 2025:HHC:16769 )

(b) That Rajnish Bansal was the

Chairman and Vikas Bansal was the Vice
Chairman of AGPI.
(c) That CBI selected 46 random
students belonging to SC/ST/OBC in respect of
whom scholarship was claimed under PMS
Scheme by AGPI.
(d) These 46 random students were
examined and their statements were recorded by
CBI. It was found that none of them was aware
about AGPI and they never took nor applied for
any scholarship.
(e) That bank accounts in the name of
students were opened at OBC Bank at
Naraingarh, Ambala and Union Bank of India at
Indri, Karnal without the knowledge of students;
(f) That AGPI was affiliated to Kurukshetra
University and Haryana State Board of Technical
Education. The details of students enrolled at
AGPI received from Kurukshetra University and
Haryana State Board of Technical Education
revealed that none of the students was registered
with the respective board/university.
(g) That Apex Group had fraudulently
claimed an amount of Rs.3,79,95,870/- as
scholarship during the year 2013-14 to 2016-17
under PMS Scheme for SC/ST/OBC students.
This entire amount of Rs.3,79,95,870/- was found
to be fake scholarship based on bogus claims.”
 17 ( 2025:HHC:16769 )

14. As per ‘reasons to believe’, on the basis of the above-

mentioned FIR registered by CBI, an ECIR was recorded by Shimla Sub-

Zonal Office, Directorate of Enforcement vide ECIR No.

ECIR/SHSZO/04/2019, dated 19.07.2019 and based on material in

possession, searches under Section 17 of the PML Act were conducted on

29.08.2023 at various premises, including the residential premises of

Rajnish Bansal, Chairman of HGPI and AGPI.

15. HGPI was established and managed under the aegis of

Ma Saraswati Educational Trust at Kala Amb, H.P. and AGPI was managed

and run under the aegis of People Welfare Education Trust at Indri, Karnal,

Haryana. Vikas Bansal became Trustee in the People Welfare Education

Trust in the year 2014 and in Maa Saraswati Educational Trust in the year

2012. He controlled the operations of the Bank Accounts of Maa Saraswati

Educational Trust and People Welfare Education Trust and Colleges under

these Trusts. Financial decisions, general administration, including affiliation

of Universities, fund utilization and day-to-day affairs of HGPI were

controlled and handled by Rajnish Bansal and Vikas Bansal was handling

the financial decisions and general administration of AGPI.

16. In order to target SC/ST/OBC students of Himachal

Pradesh to claim bogus scholarships under PMS, marketing teams were

formed by these institutions under the supervision of Rajnish Bansal and

Vikas Bansal. The teams were sent to various Districts in Himachal Pradesh

and other States to advertise about the courses offered by the HGPI and
 18 ( 2025:HHC:16769 )

free education for SC/ST/OBC students of Himachal Pradesh. These teams

collected documents from the interested students, including, Mark-sheets,

Caste Certificates, Bonafide Himachali proof, Income Certificates and

Aadhar Cards. Signatures of the students were also obtained on the

applications. The details of eligible students under PMS for SC/ST/OBC

students alongwith already signed documents were uploaded by the staff of

HGPI on HP-ePass Portal and subsequently, the details of such students

were verified by HGPI. Thereafter, Vikas Bansal and his Institutes, namely

HGPI and AGPI were involved in opening of bank accounts of students

through bank representatives of the Banks concerned. The first student of

AGPI, whose statement was recorded under Section 50 of the PML Act on

13.01.2025 stated that he never enrolled himself and never studied any

course from AGPI. When he was shown scholarship form filed in his name

on HP-ePass Portal, he stated that he never filled any scholarship form on

HP-ePass Portal and that the mobile number on said form did not belong to

him. He further stated that he was not aware of the bank account opened in

his name in Oriental Bank of Commerce at Narain Garh, Ambala. Analysis

of the bank account statement revealed that scholarship amount of

Rs.58,820/- was credited in said bank account on 05.09.2016 from DoHE,

Himachal Pradesh and Rs.58,000/- were withdrawn in cash on 07.09.2016.

He further stated that he was not aware of any such withdrawal. Similar

statements were recorded by the other students also on 13.01.2025 and

thereafter. Investigation under PMLA revealed that Maa Saraswati

 19 ( 2025:HHC:16769 )

Education Trust, wherein, Vikas Bansal is Trustee, had received scholarship

amounts under PMS from SC/ST/OBC students in Bank Accounts of Punjab

National Bank, Kala Amb, Sirmaur, H.P. and in the bank account of Oriental

Bank of Commerce, Kala Amb. Vikas Bansal was fully aware of the PMS

Scheme and had actively controlled the operations of HGPI and AGPI and

knowingly committed fraud by claiming scholarships in the name of bogus

SC/ST/OBC students as well as students who were never registered with

the concerned University/Board nor had ever studied in the said two

Institutions. During investigation under PMLA, Rajnish Bansal in his

statement recorded under Section 50 of the PMLA, 2002 on 09.07.2024 had

admitted that AGPI and HGPK had claimed and received scholarship under

PMS from DoHE. Said scholarship was transferred in bank accounts of the

Institutes and/or Trusts from the bank accounts of students through the

modus of pre-signed cheques which were signed by students beforehand

and of cash withdrawals from bank accounts of students. Investigation

under PMLA revealed that all the students of AGPI, for which scholarship

was claimed by AGPI, were found to be bogus since AGPI did not have any

affiliation with the concerned University/Board. As a result, the entire

scholarship amount received in the bank accounts of the students was

transferred to the bank account of AGPI illegally. As per the records of

DoHE, HGPI had sent claim letters to DOHE for an amount totalling to

Rs.39,33,54,428/- for scholarship under PMS Scheme for SC/ST/OBC

students from the academic session 2013-14 to 2017-18 and AGPI had sent
 20 ( 2025:HHC:16769 )

claim letters to DoHE for an amount totalling to Rs.3,79,97,870/- for

scholarship under PMS Scheme for SC/ST/OBC Students from the

academic Session 2014-15 to 2016-17.

17. Vikas Bansal through HGPI had generated Proceeds of

Crime (PoC) of Rs.14,49,03,665/- by submitting 1729 false and bogus

claims and through AGPI had generated PoC of Rs.3,80,28,270/- by

submitting 636 false and bogus claims to DoHE Himachal Pradesh of

students, who were not officially registered or enrolled in courses with

respective Universities/Board for HGPI and AGPI. Through the Trust named

Maa Saraswati Educational Trust, Vikas Bansal had acquired two

immovable properties separately at Kala Amb, H.P., i.e., 59.09 bighas land

for Rs.59.45 lac and 13.06 bighas land for Rs.90 lac in the year 2017 by

using the fee collected from students of HGPI and bank loans. The money

obtained as a result of bogus claims of scholarship under PMS Scheme was

mixed with the legitimate income of Maa Saraswati Educational Trust and

People Welfare Education Trust. The scholarships received from students or

scholarship amount received directly from the DoHE, Himachal Pradesh for

Maa Saraswati Educational Trust and People Welfare Education Trust were

utilized for salaries, college expansion, University/Board fees and loan

repayments for the construction of buildings for HGPI. As per ‘Reasons to

Believe’, there was sufficient evidence on record which clearly demonstrated

that above specified offences were perpetually committed with full disregard

to the process of law, with an intention to launder Proceeds of Crime. Vikas

 21 ( 2025:HHC:16769 )

Bansal actively involved himself in acquiring Proceeds of Crime. During

investigation in ECIR concerned, four persons, namely, Arvind Rajta

(Officer of DoHE), Hitesh Gandhi (Vice Chairman KC Group of Institutions),

Rajdeep Singh and Krishan Kumar (ASAMS Group of Institutions) were

earlier arrested under Section 19 of the PML Act. Vikas Bansal was in

possession of Proceeds of Crime from all the above means, which required

clear elicitation of facts and confronting the evidences gathered during the

course of investigation. Vikas Bansal had evidence in his exclusive

possession and could very well tamper with the same by planting forged

documents in his favour as evidence. Vikas Bansal was likely to abuse his

influence on the other parties including innocent students who made

disclosure of his criminal conspiracy. Investigation about other properties

generated out of Proceeds of Crimes was going on and if left free, Vikas

Bansal could very well tamper with evidence regarding Proceeds of Crime at

this crucial juncture. The continuous evasive replies on the part of Vikas

Bansal in an ongoing investigation under the provisions of the Prevention of

Money Laundering Act, 2002 had made the process of investigation arduous

and time consuming. The facts associated with the offence of money

laundering involving crucial information which were in his exclusive

knowledge were essential for further investigation under PMLA and were

essential to bring out the modus operandi and actual role of conspirators in

commission of scheduled offence as well as offence of money laundering

 22 ( 2025:HHC:16769 )

and accordingly, to complete investigation in these circumstances, his

custodial interrogation was necessary.

18. Under the Head ‘Involvement in offences and necessity

of arrest’, the following is mentioned in the ‘Reasons to Believe:-

“…..XVI. Involvement in offences and

necessity of arrest:

(a) Thus, facts and evidences explained above

and investigation conducted so far has, inter
alia, reveal that Vikas Bansal has
derived/obtained proceeds of crime directly
and/or indirectly as a result of criminal activity
related to scheduled offence and he is
involved in process or activity connected with
proceeds of crime including its concealment,
possession, use, projecting or claiming it as
untainted. Thus, Vikas Bansal has committed
the offence of money laundering as defined
under Section 3 and punishable under Section
4 of PMLA, 2002.
(b) On the basis of material collected during
investigation and placed on record, I, Rajeev
Kumar, Assistant Director have reasons to
believe under Section 19(1) of the PMLA,
2002 that Vikas Bansal has committed the
offence of money laundering and is connected
with the proceeds of crime derived/obtained
from the criminal activity related to scheduled
offence and in acquisition of the said
proceeds of crime. Under these
 23 ( 2025:HHC:16769 )

circumstances, I have no other option but to

invoke the provisions of Section 19 of PMLA,
2002 to complete investigation and also in
order to:
I. Trace out the diverted funds which are
proceeds of crime.
II. Prevent him from influencing the
persons acquainted with crucial
information and witnesses.
III. Confront him during custodial
interrogation with various records,
statements, witnesses and accused
persons involved in the offence of
money laundering.
IV. Identify other persons involved in the
offence of money laundering.
V. Prevent further layering and concealing
of the Proceeds of Crime.
VI. Prevent further tampering and
destruction of evidence.”

The grounds of arrest are also on record with the reply as Annexure P-2.

19. As already observed by me hereinabove, the requirement

of Section 19(1) of the 2002 Act is that the Arresting Officer may arrest a

person under Section 19 supra provided that he, on the basis of material in

his possession, has ‘reasons to believe’, which shall be recorded in writing

that any person is ‘guilty’ of an offence punishable under this Act.

20. At this stage, this Court would like to dwell upon the

judgments of the Hon’ble Supreme Court, as were cited before the Court by

learned counsel for the parties on the interpretation of Section 19 of the Act.

21. In V. Senthil Balaji vs. State Represented by Deputy

Director and Others, (2024) 3 SCC 51, Hon’ble Supreme Court of India
 24 ( 2025:HHC:16769 )

has been pleased to hold as under:-

“40. To effect an arrest, an officer

authorized has to assess and evaluate the
materials in his possession. Through such
materials, he is expected to form a reason to
believe that a person has been guilty of an offence
punishable under the PMLA, 2002. Thereafter, he
is at liberty to arrest, while performing his
mandatory duty of recording the reasons. The said
exercise has to be followed by way of an
information being served on the arrestee of the
grounds of arrest. Any non-compliance of the
mandate of Section 19 (1) of the PMLA, 2002
would vitiate the very arrest itself. Under sub-
section (2), the Authorized Officer shall
immediately, after the arrest, forward a copy of the
order as mandated under sub-section (1) together
with the materials in his custody, forming the basis
of his belief, to the Adjudicating Authority, in a
sealed envelope. Needless to state, compliance of
sub-section (2) is also a solemn function of the
arresting authority which brooks no exception.
42. The conclusion thus arrived is that
the Legislature in its wisdom has consciously
created the necessary safeguards for an arrestee,
keeping in mind his liberty, and the need for an
external approval and supervision. This provision
is in compliance with Articles 21 and 22(2) of the
Constitution of India.
43. Section 62:
 25 ( 2025:HHC:16769 )

"Law can never be enforced unless

fear supports them."
- Sophocles
“62. Punishment for vexatious search.—
Any authority or officer exercising powers under
this Act or any rules made thereunder, who
without reasons recorded in writing,—
(a) searches or causes to be searched
any building or place; or
(b) detains or searches or arrests any
person, shall for every such offence be liable on
conviction for imprisonment for a term which may
extend to two years or fine which may extend to
fifty thousand rupees or both.”
44. This provision is a reiteration of the
mandatory compliance of Section 19 of the PMLA,
2002. It is in the nature of a warning to an officer
concerned to strictly comply with the mandate of
Section 19 of the PMLA, 2002 in letter and spirit
failing which he would be visited with the
consequences. It is his bounden duty to record the
reasons for his belief in coming to conclusion that
a person has been guilty and therefore, to be
arrested. Such a safeguard is meant to facilitate
an element of fairness and accountability.
… …. … … … … … ….

74. We have already touched upon the

mandatory function that a Magistrate is to
undertake while dealing with a case of remand.
 26 ( 2025:HHC:16769 )

He is expected to do a balancing act. As a matter

of rule, the investigation is to be completed within
24 hours and therefore it is for the investigating
agency concerned to satisfy the Magistrate with
adequate material on the need for its custody, be
it police or otherwise. This important factor is to be
kept in mind by him while passing the judicial
order. We reiterate that Section 19 of the PMLA,
2002, supplemented by Section 167 of the
CrPC,1973 does provide adequate safeguards to
an arrested person. If Section 167 of the Cr.PC,
1973 is not applicable, then there is no role for the
Magistrate either to remand or otherwise.

75. Such a Magistrate has a distinct role

to play when a remand is made of an accused
person to an authority under the PMLA, 2002. It is
his bounden duty to see to it that Section 19 of the
PMLA, 2002 is duly complied with and any failure
would entitle the arrestee to get released. The
Magistrate shall also peruse the order passed by
the authority under Section 19(1) of the PMLA,
2002. Section 167 of the Cr.PC, 1973 is also
meant to give effect to Section 19 of the PMLA,
2002 and therefore it is for the Magistrate to
satisfy himself of its due compliance. Upon such
satisfaction, he can consider the request for
custody in favour of an authority, as Section 62 of
the PMLA, 2002, does not speak about the
authority which is to take action for non-
 27 ( 2025:HHC:16769 )

compliance of the mandate of Section 19 of the

PMLA, 2002. A remand being made by the
Magistrate upon a person being produced before
him, being an independent entity, it is well open to
him to invoke the said provision in a given case.
To put it otherwise, the Magistrate concerned is
the appropriate authority who has to be satisfied
about the compliance of safeguards as mandated
under Section 19 of the PMLA, 2002.

97. SUMMATION OF LAW:

97.1. When an arrestee is forwarded to the

jurisdictional Magistrate under Section 19(3) of
the PMLA, 2002 no writ of Habeus Corpus would
lie.
Any plea of illegal arrest is to be made before
such Magistrate since custody becomes judicial.
97.2. Any non-compliance of the mandate
of Section 19 of the PMLA, 2002 would enure to
the benefit of the person arrested. For such non-
compliance, the Competent Court shall have the
power to initiate action under Section 62 of the
PMLA, 2002.
97.3. An order of remand has to be
challenged only before a higher forum as provided
under the Cr.PC, 1973 when it depicts a due
application of mind both on merit and compliance
of Section 167(2) of the Cr.PC, 1973 read with
Section 19 of the PMLA 2002.
 28 ( 2025:HHC:16769 )

97.4. Section 41-A of the Cr.PC, 1973 has

got no application to an arrest made under the
PMLA 2002.
97.5. The maximum period of 15 days of
police custody is meant to be applied to the entire
period of investigation – 60 or 90 days, as a
whole.
97.6. The words “such custody” occurring
in Section 167(2) of the Cr.PC, 1973 would
include not only a police custody but also that of
other investigating agencies.
97.7. The word “custody” under Section
167(2) of the Cr.PC, 1973 shall mean actual
custody.
97.8. Curtailment of 15 days of police
custody by any extraneous circumstances, act of
God, an order of Court not being the handy work
of investigating agency would not act as a
restriction.
97.9. Section 167 of the Cr.PC, 1973 is a
bridge between liberty and investigation
performing a fine balancing act.
97.10. The decision of this Court in Anupam
J. Kulkarni6, as followed subsequently requires
reconsideration by a reference to a larger Bench.”

22. In Pankaj Bansal vs. Union of India and others,

(2024) 7 Supreme Court Cases 576, Hon’ble Supreme Court of India has

been pleased to hold as under:-

 29 ( 2025:HHC:16769 )

“16. Though much was stated and argued

by both sides on the merits of the matter in terms
of the involvement of the appellants in the alleged
offence of money laundering, we make it clear that
we are not concerned with that issue at this point.
The only issue for consideration presently is
whether the arrest of the appellants under Section
19 of the Act of 2002 was valid and lawful and
whether the impugned orders of remand passed
by the learned Vacation Judge/Additional
Sessions Judge, Panchkula, measure up. In that
context, we may also make it clear that the mere
passing of an order of remand would not be
sufficient in itself to validate the appellants’
arrests, if such arrests are not in conformity with
the requirements of Section 19 of the Act of 2002.
Though judgments were cited by the ED which
held to the effect that legality of the arrest would
be rendered immaterial once the competent Court
passes a remand order, those cases primarily
dealt with the issue of a writ of habeas corpus
being sought after an order of remand was passed
by the jurisdictional Court and that ratio has no
role to play here. The understanding of the ED
and its misplaced reliance upon that case law
begs the question as to whether there was proper
compliance with Section 19(1) of the Act of 2002
and as to whether the learned Vacation
Judge/Additional Sessions Judge, Panchkula,
correctly considered that issue while passing the
 30 ( 2025:HHC:16769 )

remand orders. Therefore, as the very validity of

the remand orders is under challenge on that
ground, the issue as to whether the arrest of the
appellants was lawful in its inception may also be
open for consideration.

17. At this stage, it would be apposite to

consider the case law that does have relevance to
these appeals and the issues under
consideration. In Vijay Madanlal Choudhary3, a
three-Judge Bench of this Court observed that
Section 65 of the Act of 2002 predicates that the
provisions of the Code of Criminal Procedure,
1973, shall apply insofar as they are not
inconsistent with the provisions of the Act of 2002
in respect of arrest, search and seizure,
attachment, confiscation, investigation,
prosecution and all other proceedings thereunder.
It was noted that Section 19 of the Act of 2002
prescribes the manner in which the arrest of a
person involved in money laundering can be
effected. It was observed that such power was
vested in high-ranking officials and that
apart, Section 19 of the Act of 2002 provided
inbuilt safeguards to be adhered to by the
authorized officers, such as, of recording reasons
for the belief regarding involvement of the person
in the offence of money laundering and, further,
such reasons have to be recorded in writing and
while effecting arrest, the grounds of arrest are to
 31 ( 2025:HHC:16769 )

be informed to that person. It was noted that the

authorized officer has to forward a copy of the
order, along with the material in his possession, to
the Adjudicating Authority and this safeguard is to
ensure fairness, objectivity and accountability of
the authorized officer in forming an opinion, as
recorded in writing, regarding the necessity to
arrest the person involved in the offence of money
laundering. The Bench also noted that it is the
obligation of the authorized officer to produce the
person so arrested before the Special Court or
Judicial Magistrate or a Metropolitan Magistrate,
as the case may be, within 24 hours and such
production is to comply with the requirement
of Section 167 Cr.P.C. It was pointed out that
there is nothing in Section 19 PMLA which is
contrary to the requirement of production
under Section 167 Cr.P.C and being an express
statutory requirement under Section 19(3) PMLA,
it has to be complied by the authorized officer. It
was concluded that the safeguards provided in the
Act of 2002 and the preconditions to be fulfilled by
the authorized officer before effecting arrest, as
contained in Section 19 PMLA, are equally
stringent and of higher standard when compared
to the Customs Act, 1962, and such safeguards
ensure that the authorized officers do not act
arbitrarily, by making them accountable for their
judgment about the necessity to arrest any person
involved in the commission of the offence of
 32 ( 2025:HHC:16769 )

money laundering, even before filing of the

complaint before the Special Court. It was on this
basis that the Bench upheld the validity of Section
19 PMLA.

18. The Bench further held that once the

person is informed of the grounds of arrest, that
would be sufficient compliance with the mandate
of Article 22(1) of the Constitution and it is not
necessary that a copy of the ECIR be supplied in
every case to the person concerned, as such a
condition is not mandatory and it is enough if the
ED discloses the grounds of arrest to the person
concerned at the time of arrest. It was pointed out
that when the arrested person is produced before
the Court, it would be open to the Court to look
into the relevant records presented by the
authorized representative of the ED for answering
the issue of need for continued detention in
connection with the offence of money laundering.
It was, in fact, such stringent safeguards provided
under Section 19 of the Act of 2002 that prompted
this Court to uphold the twin conditions contained
in Section 45 thereof, making it difficult to secure
bail.

19. This Court had occasion to again

consider the provisions of PMLA in V. Senthil
Balaji v. State11 and more particularly, Section
19 thereof. It was noted that the authorized officer
is at liberty to arrest the person concerned once
 33 ( 2025:HHC:16769 )

he finds a reason to believe that he is guilty of an

offence punishable under the Act of 2002, but he
must also perform the mandatory duty of
recording reasons. It was pointed out that this
exercise has to be followed by the information of
the grounds of his arrest being served on the
arrestee. It was affirmed that it is the bounden
duty of the authorized officer to record the reasons
for his belief that a person is guilty and needs to
be arrested and it was observed that this
safeguard is meant to facilitate an element of
fairness and accountability.

20. Dealing with the interplay between

Section 19 of PMLA and Section 167 Cr.P.C, this
Court observed in V. Senthil Balaji 11 that the
Magistrate is expected to do a balancing act as
the investigation is to be completed within 24
hours as a matter of rule and, therefore, it is for
the investigating agency to satisfy the Magistrate
with adequate material on the need for custody of
the accused. It was pointed out that this important
factor is to be kept in mind by the Magistrate while
passing the judicial order. This Court reiterated
that Section 19 PMLA, supplemented by Section
167 Cr.P.C., provided adequate safeguards to an
arrested person as the Magistrate has a distinct
role to play when a remand is made of an accused
person to an authority under the Act of 2002. It
was held that the Magistrate is under a bounden
 34 ( 2025:HHC:16769 )

duty to see to it that Section 19 of the Act of 2002

is duly complied with and any failure would entitle
the arrestee to get released. It was pointed out
that Section 167 Cr.P.C is meant to give effect
to Section 19 of the Act of 2002 and, therefore, it
is for the Magistrate to satisfy himself of its due
compliance by perusing the order passed by the
authority under Section 19(1) PMLA and only
upon such satisfaction, the Magistrate can
consider the request for custody in favour of an
authority. To put it otherwise, per this Court, the
Magistrate is the appropriate authority who has to
be satisfied about the compliance with safeguards
as mandated under Section 19 PMLA. In
conclusion, this Court summed up that any non-
compliance with the mandate of Section 19 of the
Act of 2002, would enure to the benefit of the
person arrested and the Court would have power
to initiate action under Section 62 PMLA, for such
non-compliance. Significantly, in this case, the
grounds of arrest were furnished in writing to the
arrested person by the authorized officer.

21. In terms of Section 19(3) PMLA and

the law laid down in the above decisions, Section
167 Cr.P.C. would necessarily have to be
complied with once an arrest is made
under Section 19 PMLA. The Court seized of the
exercise under Section 167 Cr.P.C. of remanding
the person arrested by the ED under Section
 35 ( 2025:HHC:16769 )

19(1) PMLA has a duty to verify and ensure that

the conditions in Section 19 are duly satisfied and
that the arrest is valid and lawful. In the event the
Court fails to discharge this duty in right earnest
and with the proper perspective, as pointed out
hereinbefore, the order of remand would have to
fail on that ground and the same cannot, by any
stretch of imagination, validate an unlawful arrest
made under Section 19 PMLA.

22. Madhu Limaye, In re:12 was a 3-

Judge Bench decision of this Court wherein it was
observed that it would be necessary for the State
to establish that, at the stage of remand, the
Magistrate directed detention in jail custody after
applying his mind to all relevant matters and if the
arrest suffered on the ground of violation of Article
22(1) of the Constitution, the order of remand
would not cure the constitutional infirmities
attaching to such arrest.

23. Viewed in this context, the remand

order dated 15.06.2023 passed by the learned
Vacation Judge/Additional Sessions Judge,
Panchkula, reflects total failure on his part in
discharging his duty as per the expected standard.
The learned Judge did not even record a finding
that he perused the grounds of arrest to ascertain
whether the ED had recorded reasons to believe
that the appellants were guilty of an offence under
the Act of 2002 and that there was proper
 36 ( 2025:HHC:16769 )

compliance with the mandate of Section 19

PMLA of the Act of 2002. He merely stated that,
keeping in view the seriousness of the offences
and the stage of the investigation, he was
convinced that custodial interrogation of the
accused persons was required in the present case
and remanded them to the custody of the ED! The
sentence – ‘It is further (sic) that all the necessary
mandates of law have been complied with’ follows
– ‘It is the case of the prosecution….’ and appears
to be a continuation thereof, as indicated by the
word ‘further’, and is not a recording by the
learned Judge of his own satisfaction to that
effect.

26. This chronology of events speaks

volumes and reflects rather poorly, if not
negatively, on the ED’s style of functioning. Being
a premier investigating agency, charged with the
onerous responsibility of curbing the debilitating
economic offence of money laundering in our
country, every action of the ED in the course of
such exercise is expected to be transparent,
above board and conforming to pristine standards
of fair play in action. The ED, mantled with far-
reaching powers under the stringent Act of 2002,
is not expected to be vindictive in its conduct and
must be seen to be acting with utmost probity and
with the highest degree of dispassion and
fairness. In the case on hand, the facts
 37 ( 2025:HHC:16769 )

demonstrate that the ED failed to discharge its

functions and exercise its powers as per these
parameters.

27. In this regard, we may note that,

though the appellants did not allege colourable
exercise of power or malafides or malice on the
part of the ED officials, they did assert in
categorical terms that their arrests were a wanton
abuse of power, authority and process by the ED,
which would tantamount to the same thing. On
that subject, we may refer to the observations of
this Court in State of Punjab vs. Gurdial Singh 13 :
(SCC p. 475, para 9)

9. The question, then, is what is

malafides in the jurisprudence of power? Legal
malice is gibberish unless juristic clarity keeps it
separate from the popular concept of personal
vice. Pithily put, bad faith which invalidates the
exercise of power — sometimes called colourable
exercise or fraud on power and oftentimes
overlaps motives, passions and satisfactions — is
the attainment of ends beyond the sanctioned
purposes of power by simulation or pretension of
gaining a legitimate goal. If the use of the power is
for the fulfilment of a legitimate object the
actuation or catalysation by malice is not legicidal.
The action is bad where the true object is to reach
an end different from the one for which the power
is entrusted, goaded by extraneous
considerations, good or bad, but (1980) 2 SCC
471 irrelevant to the entrustment. When the
custodian of power is influenced in its exercise by
considerations outside those for promotion of
which the power is vested the court calls it a
colourable exercise and is undeceived by illusion.
In a broad, blurred sense, Benjamin Disraeli was
not off the mark even in law when he stated: “I
 38 ( 2025:HHC:16769 )

repeat . . . that all power is a trust — that we are

accountable for its exercise — that, from the
people, and for the people, all springs, and all
must exist”. Fraud on power voids the order if it is
not exercised bona fide for the end designed.
Fraud in this context is not equal to moral
turpitude and embraces all cases in which the
action impugned is to effect some object which is
beyond the purpose and intent of the power,
whether this be malice-laden or even benign. If
the purpose is corrupt the resultant act is bad. If
considerations, foreign to the scope of the power
or extraneous to the statute, enter the verdict or
impel the action, mala fides or fraud on power
vitiates the acquisition or other official act.

39. We may also note that the language

of Section 19 PMLA puts it beyond doubt that the
authorized officer has to record in writing the
reasons for forming the belief that the person
proposed to be arrested is guilty of an offence
punishable under the Act of 2002. Section
19(2) requires the authorized officer to forward a
copy of the arrest order along with the material in
his possession, referred to in Section 19(1), to the
Adjudicating Authority in a sealed envelope.
Though it is not necessary for the arrested person
to be supplied with all the material that is
forwarded to the Adjudicating Authority
under Section (2), he/she has a constitutional and
statutory right to be ‘informed’ of the grounds of
arrest, which are compulsorily recorded in writing
by the authorized officer in keeping with the
mandate of Section 19(1) PMLA. As already noted
hereinbefore, It seems that the mode of informing
 39 ( 2025:HHC:16769 )

this to the persons arrested is left to the option of

the ED’s authorized officers in different parts of
the country, i.e., to either furnish such grounds of
arrest in writing or to allow such grounds to be
read by the arrested person or be read over and
explained to such person.
45. On the above analysis, to give true
meaning and purpose to the constitutional and the
statutory mandate of Section 19 (1) PMLA of
informing the arrested person of the grounds of
arrest, we hold that it would be necessary,
henceforth, that a copy of such written grounds of
arrest is furnished to the arrested person as a
matter of course and without exception. The
decisions of the Delhi High Court in Moin Akthar
Quereshi and the Bombay High Court in Chhagan
Chandrakant Bhujbal19, which hold to the
contrary, do not lay down the correct law. In the
case on hand, the admitted position is that the
ED’s Investigating Officer merely read out or
permitted reading of the grounds of arrest of the
appellants and left it at that, which is also disputed
by the appellants. As this form of communication
is not found to be adequate to fulfil compliance
with the mandate of Article 22(1) of the
Constitution and Section 19(1)PMLA, we have no
hesitation in holding that their arrest was not in
keeping with the provisions of Section 19(1)
PMLA. Further, as already noted supra, the
clandestine conduct of the ED in proceeding
 40 ( 2025:HHC:16769 )

against the appellants, by recording the second

ECIR immediately after they secured interim
protection in relation to the first ECIR, does not
commend acceptance as it reeks of arbitrary
exercise of power. In effect, the arrest of the
appellants and, in consequence, their remand to
the custody of the ED and, thereafter, to judicial
custody, cannot be sustained.”

23. In Arvind Kejriwal vs. Directorate of Enforcement,

(2025) 2 Supreme Court Cases 248, Hon’ble Supreme court after referring

to the earlier adjudications on the issue held as under:-

“11. Arrest under Section 19(1) of the

PML Act may occur prior to the filing of the
prosecution complaint and before the Special
Judge takes cognizance.11 Till the prosecution
complaint is filed, there is no requirement to
provide the accused with a copy of the ECIR.12
The ECIR is not a public document. Thus, to
introduce checks and balances, Section19
(1) imposes safeguards to protect the rights and
liberty of the arrestee. This is in compliance with
the mandate of Article 22(1) of the Constitution
of India.

12. V. Senthil Balaji vs. State8 similarly

states that the designated officer can only arrest
once they record “reasons to believe” in writing,
that the person being arrested is guilty of the
offence punishable under the PML Act. It is
 41 ( 2025:HHC:16769 )

mandatory to record the “reasons to believe” to

arrive at the opinion that the arrestee is guilty of
the offence, and to furnish the reasons to the
arrestee. This ensures an element of fairness
and accountability.

13. The decision in V. Senthil Balaji has

also examined the interplay between Section
19 of the PML Act and Section 167 of the
Code. The magistrate is expected to do a
balancing act as the investigation is to
be concluded within 24 hours as a matter of rule.
Therefore, the investigating agency has to
satisfy the magistrate with adequate material on
the need for custody of the arrestee. Magistrates
must bear this crucial aspect in mind while
examining and passing an order on the DoE’s
prayer for custodial remand. More significantly,
the magistrate is under the bounden duty to
ensure due compliance with Section 19(1) of the
PML Act. Any failure to comply would entitle the
arrestee to be released. Section 167 of the
Code, therefore, enjoins upon the magistrate the
necessity to satisfy due compliance of the law by
perusing the order passed by the authority
under Section 19(1) of the PML Act. Upon such
satisfaction, the magistrate may consider the
request for custodial remand.

14. Pankaj Bansal reiterates V. Senthil

Balaji8 to hold that the magistrate/court has the
 42 ( 2025:HHC:16769 )

duty to ensure that the conditions in Section 19

(1) of the PML Act are duly satisfied and that the
arrest is valid and lawful. This is in lieu of the
mandate under Section 167 of the Code. If the
court fails to discharge its duty in right earnest
and with proper perspective, the remand order
would fail on the ground that the court cannot
validate an unlawful arrest made under Section
19(1). The Court relied on the matter of Madhu
Limaye and others, which held that it is
necessary for the State to establish that, at the
stage of remand, while directing detention in
custody, the magistrate has applied their mind to
all relevant matters. If the arrest itself is
unconstitutional viz. Article 22(1) of the
Constitution, the remand would not cure the
constitutional infirmities attached to such arrest.
The principle stands (1969) 1 SCC 292.
expanded, as the violation of Section 19(1) of
the PML Act will equally vitiate the arrest.

15. In Pankaj Bansal4, one of the

contentions raised by the DoE was that the
legality of arrest is rendered immaterial once the
competent court passes an order of remand.
Reliance was placed on certain judgments.
However, these judgments were distinguished
on the ground that they primarily addressed writs
of habeas corpus following remand orders by the
jurisdictional court. Therefore, the ratios therein
 43 ( 2025:HHC:16769 )

are not applicable to this scenario. In the context

of statutory compliance, the Court observed in
clear terms that if the arrest is not in conformity
with Section 19(1) of the PML Act, the mere
passing of an order of remand, in itself, would
not be sufficient to validate the person’s arrest.
Thus, notwithstanding the order of remand, the
issue whether the arrest of the person is lawful
at its inception, is open for consideration and
must be answered.

16. Recently, in Prabir Purkayastha vs.

State (NCT of Delhi)10, this Court reiterated the
aforesaid principles expounded in Pankaj
Bansal4. The said principles were applied to the
pari materia provisions16 of the Unlawful
Activities (Prevention) Act, 1967. The Court
explained that Section 19(1) of the PML Act is
meant to serve a higher purpose, and also to
enforce the mandate of Article 22(1) of the
Constitution. The right to life and personal liberty
is sacrosanct, a fundamental right guaranteed
under Article 21 and protected by Articles 20 and
22 of the Constitution. Reference was made to
the observations of this Court in Roy V.D. vs.
State of Kerala 12 that the right to be informed
about the grounds of arrest flows from Article
22(1) of the Constitution and any infringement of
this fundamental right vitiates the process of
arrest and remand. The fact that the
 44 ( 2025:HHC:16769 )

chargesheet has been filed in the matter would

not validate the otherwise illegality and
unconstitutionality committed at the time of
arrest and grant of remand custody of the
accused. Reference is also made to the principle
behind Article 22(5) of the Constitution. Thus,
this Court held that not complying with the
constitutional mandate under ? Article 22(1) and
the statutory mandate of the UAPA, on the
requirement to communicate grounds of arrest
or grounds of detention, would lead to the
custody or detention being rendered illegal.

17. In Vijay Madanlal Choudhary v.

Union of India13, a three Judge Bench of this
Court distinguished between the stringent
requirements stipulated in Section 19(1) of the
PML Act, and the power of arrest given to the
police in cognizable offences under Section
41 of the Code14.Reference was made to
Section 104 of the Customs Act, 1962,20 which
was elucidated and considered by the
Constitution Bench of this Court in Ramesh
Chandra Mehta vs. State of W./B.15, and in
Union of India vs. Padam Narain
Aggarwal16. On the safeguards against the
abuse of the power of arrest in case of
the Customs Act, Padam Narain Aggarwal
(supra) observes that the power to arrest by a
Customs Officer is statutory in character. Such
 45 ( 2025:HHC:16769 )

power can be exercised only in cases where the

customs officer has the “reason to believe” that
the person sought to be arrested is guilty of the
offence punishable under the prescribed
sections.”

19. Vijay Madanlal Choudhary 13

affirms the aforesaid ratio, and states that the
safeguards provided as preconditions in Section
19(1) of the PML Act have to be fulfilled by the
designated officer before affecting arrest. The
safeguards are of a higher standard. They
ensure that the designated officer does not act
arbitrarily, and is made accountable for their
judgment about the ‘necessity to arrest’ the
person23 alleged to be involved in the offence of
money laundering, at the stage before the
complaint is filed. Paras 215 and 216 read as
under: (SCC pp. 221-22, para 215-16)

“215. The safeguards provided in the

2002 Act and the preconditions to be fulfilled
by the authorised officer before effecting
arrest, as contained in Section 19 of the 2002
Act, are equally stringent and of higher
standard. Those safeguards ensure that the
authorised officers do not act arbitrarily, but
make them accountable for their judgment
about the necessity to arrest any person as
being involved in the commission of offence of
money-laundering even before filing of the
 46 ( 2025:HHC:16769 )

complaint before the Special Court

under Section 44(1)(b) of the 2002 Act in that
regard. If the action of the authorised officer is
found to be vexatious, he can be proceeded
with and inflicted with punishment specified
under section 62 of the 2002 Act. The
safeguards to be adhered to by the
jurisdictional police officer before effecting
arrest as stipulated in the 1973 Code, are
certainly not comparable. Suffice it to observe
that this power has been given to the high-
ranking officials with further conditions to
ensure that there is objectivity and their own
accountability in resorting to arrest of a person
even before a formal complaint is filed
under section 44(1)(b) of the 2002 Act.
216. Investing of power in the high-
ranking officials in this regard has stood the
test of reasonableness in Premium
Granites19, wherein the court restated the
position that requirement of giving reasons for
exercise of power by itself excludes chances
of arbitrariness. Further, in Sukhwinder Pal
Bipan Kumar 20, the court restated the
position that where the discretion to apply the
provisions of a particular statute is left with the
Government or one of the highest officers, it
will be presumed that the discretion vested in
such highest authority will not be abused.
Additionally, the Central Government has
 47 ( 2025:HHC:16769 )

framed Rules under Section 73 in 2005,

regarding the forms and the manner of
forwarding a copy of order of arrest of a
person along with the material to the
Adjudicating Authority and the period of its
retention. In yet another decision in Ahmed
Noormohmed Bhatti 21, this court opined that
the provision cannot be held to be
unreasonable or arbitrary and, therefore,
unconstitutional merely because the authority
vested with the power may abuse his
authority. (Also see Manzoor Ali Khan 22.”
20. We respectfully agree with the ratio
of the decisions in Pankaj Bansal4) and Prabir
Purkayastha 10, which enrich and strengthen
the view taken in Vijay Madanlal Choudhary), on
the interpretation of Section 19 of the PML Act.
Power to arrest a person without a warrant from
the court and without instituting a criminal case
is a drastic and extreme power. Therefore, the
legislature has prescribed safeguards in the form
of exacting conditions as to how and when the
power is exercisable. The conditions are salutary
and serve as a check against the exercise of an
otherwise harsh and pernicious power.
21. 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
 48 ( 2025:HHC:16769 )

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. Given the conditions imposed,
the nature of the power and the effect on the
rights of the individuals, it is nobody’s case, and
not even argued by the DoE, that the authorised
officer is entitled to arrest a person without
following the statutory requirements.

22. However, it has been argued by the

DoE that the power to arrest is neither an
administrative nor a quasi-judicial power as the
arrest is made during investigation. Judicial
scrutiny is not permissible as it will interfere with
investigation, or at best should be limited to
subversive abuse of law. Discretion and right to
arrest vests with the competent officer, whose
subjective opinion should prevail.

23. We do not agree and must reject

this argument. We hold that the power of judicial
review shall prevail, and the court/magistrate is
required to examine that the exercise of the
power to arrest meets the statutory conditions.
The legislature, while imposing strict conditions
as preconditions to arrest, was aware that the
arrest may be before or prior to initiation of the
 49 ( 2025:HHC:16769 )

criminal proceedings/prosecution complaint. The

legislature, neither explicitly nor impliedly,
excludes the court surveillance and examination
of the preconditions of Section 19(1) of the PML
Act being satisfied in a particular case. This
flows from the mandate of Section 19(3) which
requires that the arrestee must be produced
within 24 hours and taken to the Special Court,
or court of judicial/metropolitan magistrate
having jurisdiction. The exercise of the power to
arrest is not exempt from the scrutiny of courts.
The power of judicial review remains both before
and after the filing of criminal
proceedings/prosecution complaint. It cannot be
said that the courts would exceed their power,
when they examine the validity of arrest
under Section 19(1) of the PML Act, once the
accused is produced in court in terms of Section
19(3) of the PML Act.”

27. In the present case, we are

examining Section 19(1) of the PML Act and the
rights of the accused. We are not concerned
with the ECIR. The relevant question arising is –
whether the arrestee is entitled to be supplied
with a copy of the “reasons to believe”?
Paragraph 89 in Vijay Madanlal
Choudhary (supra) refers to the importance of
recording the “reasons to believe” in writing, and
states this is mandatory. Further, both Pankaj
 50 ( 2025:HHC:16769 )

Bansal (supra) and Prabir Purkayastha (supra)

hold that the failure to record “reasons to
believe” in writing will result in the arrest being
rendered illegal and invalid. Paragraph 131 of
Vijay Madanlal Choudhary (supra), which has
been quoted subsequently, states that Section
19(1) requires in-depth scrutiny by the
designated officer. A higher threshold is required
for making an arrest, necessitating a review of
the material available to demonstrate the
person’s guilt. Production of the “reasons to
believe” before the Special Court/magistrate,
cannot be construed and is not the same as
furnishing or providing the “reasons to believe”
to the arrestee who has a right to challenge his
arrest in violation of Section 19(1) of the PML
Act.

31. Providing the written “grounds of

arrest”, though a must, does not in itself satisfy
the compliance requirement. The authorized
officer’s genuine belief and reasoning based on
the evidence that establishes the arrestee’s guilt
is also the legal necessity. As the “reasons to
believe” are accorded by the authorised officer,
the onus to establish satisfaction of the said
condition will be on the DoE and not on the
arrestee.

32. On the necessity to satisfy the

preconditions mentioned in Section 19(1) of the
 51 ( 2025:HHC:16769 )

PML Act, we have quoted from the judgment of

this Court in Padam Narain Aggarwal (supra)
and also referred to and quoted from the
Canadian judgment in Gifford (supra). Existence
and validity of the “reasons to believe” goes to
the root of the power to arrest. The subjective
opinion of the arresting officer must be founded
and based upon fair and objective consideration
of the material, as available with them on the
date of arrest. On the reading of the “reasons to
believe” the court must form the ‘secondary
opinion’ on the validity of the exercise
undertaken for compliance of Section 19(1) of
the PML Act when the arrest was made. The
“reasons to believe” that the person is guilty of
an offence under the PML Act should be
founded on the material in the form of
documents and oral statements.

41. Once we hold that the accused is

entitled to challenge his arrest under Section
19(1) of the PML Act, 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. As observed above, the
requirements in Section 19(1) are the
jurisdictional conditions to be satisfied for arrest,
 52 ( 2025:HHC:16769 )

the validity of which can be challenged by the

accused and examined by the court.
Consequently, 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”. In reality, this would effectively prevent
the accused from challenging their arrest,
questioning the “reasons to believe”. 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.

42. We would accept that in a one-off

case, it may not be feasible to reveal all material,
including names of witnesses and details of
documents, when the investigation is in
progress. This will not be the position in most
cases. DoE may claim redaction and exclusion
of specific particulars and details. However, the
onus to justify redaction would be on the DoE.
The officers of the DoE are the authors of the
“reasons to believe” and can use appropriate
wordings, with details of the material, as are
necessary in a particular case. As there may
only be a small number of cases where
 53 ( 2025:HHC:16769 )

redaction is justified for good cause, this reason

is not a good ground to deny the accused’s
access to a copy of the “reasons to believe” in
most cases. Where the non-disclosure of the
“reasons to believe” with redaction is justified
and claimed, the court must be informed. The
file, including the documents, must be produced
before the court. Thereupon, the court should
examine the request and if they find justification,
a portion of the “reasons to believe” and the
document may be withheld. This requires
consideration and decision by the court. DoE is
not the sole judge.

43. Section 173(6) of the Code, permits

the police officer not to furnish statements or
make disclosures to the accused when it is
inexpedient in public interest. In such an event,
the police officer is to indicate the specific part of
the statement and append a note requesting the
magistrate to exclude that part from the copy
given to the accused. He has to state the
reasons for making such request. The same
principle will apply.

44. We now turn to the scope and

ambit of judicial review to be exercised by the
court. Judicial review does not amount to a mini-
trial or a merit review. The exercise is confined
to ascertain whether the “reasons to believe” are
based upon material which ‘establish’ that the
 54 ( 2025:HHC:16769 )

arrestee is guilty of an offence under the PML

Act. The exercise is to ensure that the DoE has
acted in accordance with the law. The courts
scrutinize the validity of the arrest in exercise of
power of judicial review. If adequate and due
care is taken by the DoE to ensure that the
“reasons to believe” justify the arrest in terms
of Section 19(1) of the PML Act, the exercise of
power of judicial review would not be a cause of
concern. Doubts will only arise when the
reasons recorded by the authority are not clear
and lucid, and therefore a deeper and in-depth
scrutiny is required. Arrest, after all, cannot be
made arbitrarily and on the whims and fancies of
the authorities. It is to be made on the basis of
the valid “reasons to believe”, meeting the
parameters prescribed by the law. In fact, not to
undertake judicial scrutiny when justified and
necessary, would be an abdication and failure of
constitutional and statutory duty placed on the
court to ensure that the fundamental right to life
and liberty is not violated.

50. In our opinion, the key distinction

between Section 19(1) and Section 45 is the
authority undertaking the exercise, in each case.
Under Section 19(1), it is the
designated/authorised officer who records in
writing, their “reasons to believe” that the
arrestee is ‘guilty’ of an offence under the PML
 55 ( 2025:HHC:16769 )

Act. Thus, the arrest is based on the opinion of

such officer, which opinion is open to judicial
review, however not merits review, in terms of
the well-settled principles of law. Contrastingly,
under Section 45, it is the Special Court which
undertakes the exercise. The Special Court
independently examines pleas and contentions
of both the accused and the DoE, and arrives at
an objective opinion. The Special Court is not
bound by the opinion of the
designated/authorised officer recorded in the
“reasons to believe”. A court’s opinion is different
and cannot be equated to an officer’s opinion.
While the Special Court’s opinion is
determinative, and is only subject to appeal
before the higher courts, the DoE’s opinion is not
in the same category as it is open to judicial
review.

79. In Vijay Mandanlal Choudhary

(supra), a substantive threshold test is not laid
down on the ‘necessity to arrest’. However, in
paragraph 88 of the judgment, the Court has
observed that the safeguard provided in Section
19(1) of the PML Act is to ensure fairness,
objectivity and accountability of the authorised
officer in forming opinion, as recorded in writing,
regarding necessity to arrest a person involved
in the offence of money laundering. Similar
 56 ( 2025:HHC:16769 )

observations are made in paragraphs 17 and 24

of Pankaj Bansal.

82. Therefore, the issue which arises

for consideration is whether the court while
examining the validity of arrest in terms
of Section 19(1) of the PML Act will also go into
and examine the necessity and need to arrest. In
other words, is the mere satisfaction of the
formal parameters to arrest sufficient? Or is the
satisfaction of necessity and need to arrest,
beyond mere formal parameters, required? We
would concede that such review might be
conflated with stipulations in Section 41 of the
Code which lays down certain conditions for the
police to arrest without warrant:

(i) Section 41(1)(ii)(a) – preventing a person

from committing further offence.
(ii) Section 41(1)(ii)(b) – proper investigation of
the offence.
(iii) Section 41(1)(ii)(c) – preventing a person
from disappearing or tampering with evidence in
any manner.
(iv) Section 41(1)(ii)(d) – preventing the person
from making any inducement or threat or
promise to any person acquainted with the facts
of the case so as to dissuade him from
disclosing such facts to the court or police.
 57 ( 2025:HHC:16769 )

(v) Section 41(1)(ii)(e) – to ensure presence of

the person in the Court, whenever required,
which without arresting cannot be ensured.
However, Section 19(1) of the PML Act does not
permit arrest only to conduct investigation.
Conditions of Section 19(1) have to be satisfied.
Clauses (a), (c), (d) and (e) to Section 41(1)(ii) of
the Code, apart from other considerations, may
be relevant.”

24. In Y. Balaji v. Karthik Desari, 2023 SCC Online 645,

Hon’ble Supreme Court has been pleased to hold as under:-

“97. If the main part of Section 3 is

dissected with forensic precision, it will be clear
that Section 3 addresses itself to three things
(we may call them 3 ‘P’s) namely, (i) person; (ii)
process or activity; and (iii) product. Insofar as
persons covered by Section 3 are concerned,
they are, (i) those who directly or indirectly
attempt to indulge; or (ii) those who knowingly
assists; or (iii) those who are knowingly a party;
or (iv) those who are actually involved. Insofar
as process is concerned, the Section
identifies six different activities, namely (i)
concealment; (ii) possession; (iii) acquisition;
(iv) use; (v) projecting; or (vi) claiming as
untainted property, any one of which is
sufficient to constitute the offence. Insofar as
product is concerned, Section 3 identifies
 58 ( 2025:HHC:16769 )

“proceeds of crime” or the property representing

the proceeds of crime as the product of the
process or activity.”

25. In Radhika Aggarwal Versus Union of India and

others, (2025) 150 GSTR 121: 2025 SCC Online SC 449, which is a three

Judge Bench judgment of Hon’ble Supreme Court, while concurring with the

judgment delivered by Hon’ble the Chief Justice, Hon’ble Justice Bela M.

Trivedi, was pleased to hold as under on the jurisdictionary power of judicial

review under Articles 32 and 226 of the Constitution of India, when the

arrest of a person is challenged: -

“....79. While completely agreeing with the

well-considered opinion expressed by the
Hon’ble Chief Justice, on when and how the
power of arrest should be exercised by the
authorized officers, I have thought it expedient to
pen down my views on the jurisdictionary
powers of judicial review under Article
32 and Article 226 of the Constitution of India,
when the arrest of a person is challenged.

80. At the outset, it may be noted that

as well settled, though the powers of judicial
review under Article 32 and 226 of the
Constitution of India are very wide and
untrammeled and are vested in the superior
courts to protect the legal and fundamental
rights of the citizens and even non-citizens, the
 59 ( 2025:HHC:16769 )

courts over the years have evolved certain self-

restraints for exercising these powers. They
have done so in the interest of the administration
of justice and for better and more efficient and
informed exercise of the said powers. The self-
restraints or limitations are imposed as a matter
of prudence, propriety, policy and practice. The
extra- ordinary jurisdiction under Article
32 and 226, by its very nature is used sparingly
and in the extraordinary circumstances…..

82. Whenever the jurisdiction of the

High Court or the Supreme Court is invoked
under Article 226 or Article 32 as the case may
be, challenging the punitive or preventive
detention, the Court is expected to take into
consideration the nature of right infringed, the
scope and object of the legislation under which
such arrest or detention is made, the need to
balance the rights and interests of the individual
as against those of the society, the
circumstances under which and the persons by
whom the jurisdiction is invoked etc. In exercise
of their discretionary jurisdiction, the High Courts
and the Supreme Court do not, as courts of
appeal or revision, correct errors of law or of
facts. The judicial intervention is warranted only
in exceptional circumstances when the arrest is
prima facie found to be malafide; or is prompted
by extraneous circumstances, or is made in
 60 ( 2025:HHC:16769 )

contravention of or in breach of provisions of the

concerned statute; or when the authority acting
under the concerned statute does not have the
requisite authority etc......

87. However, when the legality of such

an arrest made under the Special Acts like
PMLA, UAPA, Foreign Exchange, Customs Act,
GST Acts, etc. is challenged, the Court should
be extremely loath in exercising its power of
judicial review. In such cases, the exercise of the
power should be confined only to see whether
the statutory and constitutional safeguards are
properly complied with or not, namely to
ascertain whether the officer was an authorized
officer under the Act, 2022 SCC OnLine SC 929
whether the reason to believe that the person
was guilty of the offence under the Act, was
based on the “material” in possession of the
authorized officer or not, and whether the
arrestee was informed about the grounds of
arrest as soon as may be after the arrest was
made. Sufficiency or adequacy of material on
the basis of which the belief is formed by the
officer, or the correctness of the facts on the
basis of which such belief is formed to arrest the
person, could not be a matter of judicial review.

88. It hardly needs to be reiterated that

the power of judicial review over the subjective
satisfaction or opinion of the statutory authority
 61 ( 2025:HHC:16769 )

would have different facets depending on the

facts and circumstances of each case. The
criteria or parameters of judicial review over the
subjective satisfaction applicable in Service
related cases, cannot be made applicable to the
cases of arrest made under the Special Acts.
The scrutiny on the subjective opinion or
satisfaction of the authorized officer to arrest the
person could not be a matter of judicial review,
in as much as when the arrest is made by the
authorized officer on he having been satisfied
about the alleged commission of the offences
under the special Act, the matter would be at a
very nascent stage of the investigation or
inquiry. The very use of the phrase “reasons to
believe” implies that the officer should have
formed a prima facie opinion or belief on the
basis of the material in his possession that the
person is guilty or has committed the offence
under the relevant special Act. Sufficiency or
adequacy of the material on the basis of which
such belief is formed by the authorized officer,
would not be a matter of scrutiny by the Courts
at such a nascent stage of inquiry or
investigation.”

26. In Vihan Kumar vs. State of Haryana and another,

2025 SCC Online SC 269, Hon’ble Supreme Court has been pleased to

held as under:-
 62 ( 2025:HHC:16769 )

“21. Therefore, we conclude:

a) The requirement of informing a person

arrested of grounds of arrest is a mandatory
requirement of Article 22(1);

b) The information of the grounds of arrest

must be provided to the arrested person in such
a manner that sufficient knowledge of the basic
facts constituting the grounds is imparted and
communicated to the arrested person effectively
in the language which he understands. The
mode and method of communication must be
such that the object of the constitutional
safeguard is achieved;

c) When arrested accused alleges non-

compliance with the requirements of Article
22(1), the burden will always be on the
Investigating Officer/Agency to prove compliance
with the requirements of Article 22(1);
d) Non-compliance with Article 22(1) will be a
violation of the fundamental rights of the accused
guaranteed by the said Article. Moreover, it will
amount to a violation of the right to personal
liberty guaranteed by Article 21 of the
Constitution. Therefore, non-compliance with the
requirements of Article 22(1) vitiates the arrest of
the accused. Hence, further orders passed by a
criminal court of remand are also vitiated.
Needless to add that it will not vitiate the
investigation, charge sheet and trial. But, at the
 63 ( 2025:HHC:16769 )

same time, filing of chargesheet will not validate

a breach of constitutional mandate under Article
22(1);
e) When an arrested person is produced
before a Judicial Magistrate for remand, it is the
duty of the Magistrate to ascertain whether
compliance with Article 22(1) and other
mandatory safeguards has been made; and
f) When a violation of Article 22(1) is
established, it is the duty of the court to forthwith
order the release of the accused. That will be a
ground to grant bail even if statutory restrictions
on the grant of bail exist. The statutory
restrictions do not affect the power of the court to
grant bail when the violation of Articles
21 and 22 of the Constitution is established.”

27. In terms of the law declared by the Hon’ble Supreme

Court, the subjective opinion of the Arresting Officer must be founded and

based upon fair and objective consideration of the material as is available

with him on the date of arrest. The scope of judicial review does not amount

to a mini-trial or a merit review. The exercise is confined to ascertain

whether the ‘reasons to believe’ are based upon material which establish

that the arrestee is ‘guilty’ of an offence under the PML Act. The exercise is

to ensure that DoE has acted in accordance with the law. The Courts

scrutinize the validity of the arrest in exercise of power of judicial review and

if adequate and due care is taken by DoE to ensure that the “reasons to
 64 ( 2025:HHC:16769 )

believe” justify the arrest in terms of Section 19(1) of the PML Act, the

exercise of power of judicial review would not be a cause of concern.

Hon’ble Supreme Court has further held that under Section 19(1) of the PML

Act, it is the designated/authorized officer who record in writing, their

“reasons to believe” that the arrestee is “guilty” of an offence under the PML

Act. Thus, the arrest is based on the opinion of such Officer, which opinion

is open to judicial review, however, not merit review. Section 19(1) of the

PML Act does not permit arrest only to conduct investigation. Conditions of

Section 19(1) have to be satisfied. It is the bounden duty of the authorized

officer to record the reasons for his belief that a person is guilty and needs

to be arrested and the safeguard is meant to facilitate an element of fairness

and accountability. To effect an arrest, an officer authorized has to assess

and evaluate the materials in his possess. Through such material, he is

expected to form a reason to believe that a person has been guilty of an

offence punishable under the PMLA, 2002. Thereafter, he is at liberty to

arrest, while performing his mandatory duty of recording the reasons. Said

exercise has to be followed by way of information being served on the

arrestee of the grounds of arrest. Any non-compliance of the mandate of

Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. When

legality of an arrest made under the Special Acts like PMLA, UAPA, Foreign

Exchange, Customs Act, GST Acts etc. is challenged, the Court should be

extremely loath in exercising its power of judicial review. In such cases, the

exercise of the power should be confined only to see whether the statutory
 65 ( 2025:HHC:16769 )

and constitutional safeguards ae properly complied with or not, namely, to

ascertain whether the officer was an authorized officer under the Act,

whether the ‘reason to believe’ that the person was guilty of the offence

under the Act, was based on the “material” in possession of the authorized

officer or not, and whether the arrestee was informed about the grounds of

arrest as soon as may be after the arrest was made. Sufficiency or

adequacy of material on the basis of which the belief is formed by the

officer, or the correctness of the facts on the basis of which such belief is

formed to arrest the person, could not be a matter of judicial review. It hardly

needs to be reiterated that the power of judicial review over the subjective

satisfaction or opinion of statutory authority would have different facets

depending on the facts and circumstances of each case. The criteria or

parameters of judicial review over the subjective satisfaction applicable in

service related cases cannot be made applicable to the cases of arrest

made under the Special Acts. The scrutiny on the subjective opinion or

satisfaction of the authorized officer to arrest the person could not be a

matter of judicial review, in as much as when the arrest is made by the

authorized officer on he having been satisfied about the alleged commission

of the offences under the Special Act, the matter would be at a very nascent

stage of the investigation or inquiry. The very use of the phrase “reasons to

believe” implies that the officer should have formed a prima facie opinion or

belief on the basis of the material in his possession that the person is guilty

or has committed the offence under the relevant special Act. Sufficiency or
 66 ( 2025:HHC:16769 )

adequacy of the material on the basis of which such belief is formed by the

authorized officer, would not be matter of scrutiny by the Courts at such a

nascent stage of inquiry or investigation.

28. It is evident from the judgments of the Hon’ble Supreme

Court that the act of Arresting Officer of arresting a person is amenable to

judicial review, but the scope of judicial review is limited. The High Court in

exercise of its writ jurisdiction can only scrutinize as to whether the

provisions of Section 19 of the PML Act, 2002 have been complied with or

not. It cannot go into the adequacy or the sufficiency of the material etc. so

as to conduct merit test of the satisfaction of the Arresting Officer. However,

the High Court, of course, can see as to whether the arrest is legal or not,

but, the legality has to be confined to the compliance of provisions of

Section 19(1) of the Act. It is also evident from the judgments of the Hon’ble

Supreme Court that though the arrest under Section 19(1) of the PML Act

cannot be only for the purpose of investigation, but where the arrest is also

necessary for that purpose, if the same is after satisfaction of the statutory

provisions of Section 19(1) of the Act, then such arrest cannot be interfered

with by the High Court.

29. Coming back to the facts of the present case, this Court

is of the considered view that the ‘reasons to believe’, which have been

reduced into writing by the Arresting Officer not only point out to the

involvement of the petitioner in the predicate offence, but also the

involvement of the petitioner while dealing with the Proceeds of Crime. The
 67 ( 2025:HHC:16769 )

Arresting Officer, in detail, has dealt in the ‘reasons to believe’ as to why,

according to him, the arrest was necessary. Not only this, a perusal of the

‘reasons to believe’ demonstrates that after elaborating the reasons, the

Arresting Officer also stated in Para-XVI thereof that the petitioner had

committed the offence of money laundering and is connected with the

Proceeds of Crime derived/obtained from the criminal activity related to

scheduled offence and in acquisition of the said Proceeds of Crime. Though

the word “guilty” has not been specifically used, but, when it stands

mentioned in the reasons to believe that the Arresting Officer has reasons to

believe under Section 19(1) of the PML Act that Vikas Bansal has

committed the offence of money laundering and is connected with the

Proceeds of Crime derived/obtained from the criminal activity related to

scheduled offence and in acquisition of the said Proceeds of Crime, this

was, indeed, recording down his satisfaction that as per him, the petitioner

was guilty of offence punishable under the PML Act.

30. Besides this, it is further apparent from the ‘reasons to

believe’ that said reasons were based on the material with the Arresting

Officer, which stood elaborately dealt with in the ‘reasons to believe’, both

relating to the predicate offence as well as the commission of offence under

the PML Act.

31. Now, in terms of the law declared by the Hon’ble

Supreme Court, in exercise of its power of judicial review, this Court is not

going into nor it can go into the correctness of the opinion of the Arresting
 68 ( 2025:HHC:16769 )

Officer, because that is beyond the scope of judicial review. Suffice to say

that when the mandatory requirements of Section 19(1) of the Act stand

complied with by the Arresting Officer and the compliance is not cosmetic,

this Court cannot hold the arrest of the petitioner to be bad in law. The

contention of learned Senior Counsel for the petitioner that the arrest of the

petitioner is for the sake of investigation only and same is not permissible

under Section 19(1) of the Act, can also not be accepted, for the reason that

though as per the judgments of the Hon’ble Supreme Court, the arrest of a

person under Section 19(1) of the PML Act cannot only be for the purpose

of investigation, but the same can also be for the purpose of investigation, if

the arrest is in strict compliance of the provisions of Section 19(1) of the Act.

In this case, the reasons to believe, indeed, prima facie, do justify the arrest

of the petitioner in terms of Section 19(1) of the PML Act. The veracity of the

‘reasons to believe’ cannot be gone into by the Court in these proceedings,

however, it cannot be said that the ‘reasons to believe’, which have been

reduced into writing do not demonstrate that a case was indeed made by

the Arresting Officer for exercising his power of arresting the petitioner.

Therefore, this Court is of the considered view that the arrest of the

petitioner is not in violation of the provisions of Section 19(1) of the PML Act.

Though learned Senior Counsel for the petitioner vehemently submitted that

the chronology which preceded the arrest of the petitioner, shroud the intent

of the respondents with suspicion, but this Court is of the considered view

that as the requirements of Section 19 of the PMLA were met in course of

 69 ( 2025:HHC:16769 )

arrest of the petitioner, then the backdrop in which the person is arrested,

cannot persuade the Court to declare the arrest in violation of the provisions

of Section 19(1) of the Act. In fact, this Court is refraining from making any

observation in this regard, so that it does not prejudice the case of either of

the parties.

32. Now, as this Court has held that the arrest of the

petitioner was not in violation of Section 19(1) of the Act, the remand of the

petitioner by the Court of learned Judicial Magistrate can also not be faulted

with, as the satisfaction of learned Judicial Magistrate is also confined to

ensuring that the provisions of Section 19(1) of the Act are complied with in

letter and spirit. The discrepancies pointed out in the order of learned

Judicial Magistrate, which were specifically referred to by learned Senior

Counsel for the petitioner, also do not render either arrest or remand of the

petitioner to be bad, for the reason that when the foundation of the arrest of

the petitioner is being upheld by the Court, the edifice would also survive.

33. As far as the argument raised on behalf of the petitioner

that the Judicial Magistrate was not having any jurisdiction to order the

remand of the petitioner is concerned, this Court would like to refer to the

provisions of Section 19(3) of the Prevention of Money-laundering Act,

2002. Sub-section (3) of Section 19 of the Act provides that every person

arrested under Sub-section (1) shall within twenty-four hours, be taken to a

Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the

case may be, having jurisdiction, provided that the period of twenty-four
 70 ( 2025:HHC:16769 )

hours shall exclude the time necessary for the journey from the place of

arrest to the Special Court or Magistrate’s Court. It is not in dispute that in

terms of the Notification issued by the Government of India, Sessions

Judge, Shimla is designated as Special Judge under the PMLA, 2002 for

certain Districts in the State of Himachal Pradesh, including Shimla, Solan

and Sirmaur. It is also not in dispute that the Shimla Zonal Office of

Directorate of Enforcement recorded an Enforcement Case Information

Report (ECIR) bearing No. ECIR/SHSZO/04-2019 based on the predicate

offence on 19.07.2019 and a prosecution complaint was filed on 21.10.2023

before the learned Special Court under the Prevention of Money-laundering

Act at Shimla and vide order dated 23.02.2024, said Court has taken

cognizance of the said complaint against the accused persons named

therein. It is a matter of record that as on the date when the petitioner was

arrested, Special Court, PMLA was not available on account of winter

vacations. Though the petitioner was produced before the Judicial

Magistrate concerned on the basis of a Notification, in terms whereof, the

powers of Sessions Judge, Shimla were being exercised by the said Officer,

but the fact of the matter still remains that in the absence of the Special

Court being available, the petitioner could have been produced before the

said Judicial Magistrate at Shimla, as he was having territorial jurisdiction in

the matter, as the ECIR was registered on 19.07.2019 in the Shimla Zonal

Office of the Directorate of Enforcement. Therefore, this Court is of the

 71 ( 2025:HHC:16769 )

considered view that it cannot be said that the learned Judicial Magistrate

who granted the remand was not having territorial jurisdiction to do so.

34. Further, in terms of the law laid down by the Hon’ble

Supreme Court, the High Court, in exercise of its power of judicial review

under Article 226 of the Constitution of India, cannot go into the legality of a

judicial order, including that passed by a Judicial Magistrate, except for the

exceptions carved out by the Hon’ble Supreme Court in Madhu Limaye, In

re, (1969) 1 SCC 292. In fact, in V. Senthil Balaji’s case (supra), Hon’ble

Supreme Court has been pleased to hold that a Magistrate has a distinct

role to play when a remand is made of an accused person to an authority

under the PMLA, 2002. It is his bounden duty to see that Section 19 of the

PMLA, 2002 is duly complied with and any failure would entitle the arrestee

to get released. The Magistrate shall also peruse the order passed by the

Authority under Section 19(1) of the PMLA, 2002. Section 167 of the

Criminal Procedure Code, 1973 is also meant to give effect to Section 19 of

the PMLA, 2002 and, therefore, it is for the Magistrate to satisfy himself of

its due compliance. To put it otherwise, the Magistrate concerned is the

appropriate authority who has to be satisfied about the compliance of

safeguards, as mandated under Section 19 of the PMLA, 2002. An order of

remand has to be challenged only before a higher Forum as provided under

the Criminal Procedure Code, 1973, when it depicts a due application of

mind both on merit and compliance of Section 167(2) Cr. P.C. read with

Section 19 of the PML Act, 2002.

 72 ( 2025:HHC:16769 )

35. From the response of the respondent-Department and

the documents appended with the reply, it is evident that statutory

safeguards were properly complied with in the present case. The Arresting

Officer was an Authorized Officer under Section 19 (1) of the PML Act and

the ‘reasons to believe’ that the petitioner was ‘guilty’ of the offence

punishable under the PML Act were based on the material in possession of

the Authorized Officer. It is also not in dispute that the petitioner was

informed about the ‘grounds of arrest’ soon after his arrest. This Court again

reiterates that in this backdrop the sufficiency or adequacy of material, on

the basis of which the belief was formed by the Arresting Officer or the

correctness of the facts on the basis of which the belief was formed to arrest

the petitioner, cannot be gone into by this Court in exercise of its power of

judicial review in terms of the law declared by the Hon’ble Supreme Court.

36. The ‘reasons to believe’ categorically spell out that Vikas

Bansal was involved in the predicate offence as well as in the commission of

offences under PML Act. In terms of the contents of the ‘reasons to believe’,

Vikas Bansal through HGPI had generated Proceeds of Crime (PoC) of

Rs.14,49,03,665/- by submitting 1729 false and bogus claims and had

generated Proceeds of Crime to the tune of Rs.3,80,28,270/- by submitting

636 false and bogus claims to the Department of Higher Education,

Himachal Pradesh through AGPI of students, who were not officially

registered or enrolled in courses with respective Universities/Board for HGPI

and AGPI. It is further mentioned in the ‘reasons to believe’ that through the
 73 ( 2025:HHC:16769 )

Trust named Maa Saraswati Educational Trust, Vikas Bansal had acquired

two immovable properties separately at Kala Amb, H.P., measuring 59.09

bighas of land for Rs.59.45 lac and 13.06 bighas of land for Rs.90 lac in the

year 2017 by using the fee collected from students of HGPI and bank loans

and the money obtained as a result of bogus claims of scholarship under

PMS Scheme was mixed with the legitimate income of Maa Saraswati

Educational Trust and People Welfare Education Trust. The Proceeds of

Crime were utilized for payment of salaries and expansion of College etc.

37. Therefore, in the light of above discussion, as this Court

finds no merit in the present petition, the same is dismissed. No order as to

costs. Pending miscellaneous applications, if any, also stand disposed of.

(Ajay Mohan Goel)

Judge

May 30, 2025

(bhupender/narender)