Facts: The petitioner, a Deputy Director of Town Planning at the Vasai-Virar City Municipal Corporation (VVCMC), was arrested by the Directorate of Enforcement (ED) on 13th August 2025. The investigation followed several FIRs registered between 2019 and 2023 involving illegal building constructions on reserved lands using forged documents. During search operations at the petitioner's residences, the ED seized unaccounted cash worth Rs. 8.23 crores and diamond jewellery valued at Rs. 23.28 crores. Based on this recovery and shared information, a predicate offence under the Prevention of Corruption Act (PC Act) was registered against the petitioner on 1st August 2025. The petitioner challenged the arrest and subsequent remand orders as illegal, contending that he was not named in the initial FIRs and that there was no "reason to believe" he was guilty of money laundering at the time of arrest.
Procedural Posture: The petitioner approached the Bombay High Court by filing a Criminal Writ Petition under Articles 226 and 227 of the Constitution of India, read with section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking a declaration that his arrest was illegal and for quashing the remand orders.
Issue: Whether the petitioner’s arrest under section 19 of the PMLA was illegal due to a lack of "reason to believe" and whether the absence of his name in the initial predicate FIRs rendered the ED's actions jurisdictionally defective.
Holding: No, the arrest was not illegal. The court found that the statutory safeguards were followed and there was sufficient material to form a "reason to believe" that the petitioner was involved in money laundering.
Reasoning: The Court reasoned that the offence of money laundering is an independent offence and its definition under section 2(1)(u) is expansive, covering any property derived from criminal activity relatable to a scheduled offence. The recovery of massive amounts of unaccounted cash and jewellery, for which the petitioner offered no plausible explanation, provided a sufficient foundation for the "reason to believe" required under section 19 of the PMLA. Following the precedent in "Vijay Madanlal Choudhary", the court held that prior arraignment in the initial FIRs is not a mandatory prerequisite if the investigation reveals the person's involvement in the process of laundering. Furthermore, judicial review of "subjective satisfaction" for arrest is limited; courts cannot assess the adequacy of material at a nascent stage but only ensure no manifest arbitrariness or gross non-compliance with statutory safeguards exists. The petition was viewed as an attempt to bypass the regular bail mechanism under section 45 of the PMLA.