The Delhi High Court ruled that the ED must give ‘reasons to believe’ only in future arrests, as directed in the Kejriwal case. Past arrests are not affected by this new requirement.
New Delhi: Today, On May 15, The Delhi High Court recently gave a decision in the case, where it ruled that the Supreme Court’s direction to the Enforcement Directorate (ED) to provide ‘reasons to believe’ to an arrested person will only apply from now on and not to past cases.
The case was heard by Justice Anup Jairam Bhambhani, who agreed with a similar opinion given earlier by another bench of the same court.
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Justice Bhambhani made it clear that this requirement – to give the arrested person the ‘reasons to believe’ at the time of arrest – came up for the first time only when the Supreme Court gave its judgment in the Arvind Kejriwal case.
It was not something already written or interpreted from an existing law.
The Court said:
“This court would only observe that since what the Supreme Court articulated in Arvind Kejriwal was an additional requirement, and the Supreme Court was not interpreting an existing statutory requirement, such additional requirement could only be prospective in its operation as of the date that requirement was laid down by the Supreme Court.”
This means that from the day the Supreme Court gave this judgment, the ED will now have to provide ‘reasons to believe’ to any person it arrests.
But it cannot be applied to cases that happened before that judgment.
The Court also dealt with another important point. It explained that just because someone has violated the Foreign Exchange Management Act (FEMA), 1999, it does not mean they cannot be punished under the Indian Penal Code (IPC) for the same act.
This clarification came because the accused were trying to say that since FEMA covers the matter, IPC charges should not apply.
Justice Bhambhani clearly stated:
“To be absolutely clear, the offences of criminal conspiracy, cheating, forgery and related offences of which the petitioners are accused under the IPC, do not get obliterated or subsumed or cease to be penal offences, merely because they were the underlying actions for the infractions of foreign exchange regulations. Pertinently, the penal offences were complete in themselves before the infraction of the provisions of FEMA took place.”
The Court further explained that FEMA and IPC are two different laws that deal with separate kinds of wrongdoing. Even if the same act breaks both laws, both can be applied.
It said that FEMA does not cancel or override IPC in any way, whether directly or indirectly.
The Bench said:
“The enactment of the Foreign Exchange Management Act (FEMA), 1999 does not grant a person immunity from offences under the Indian Penal Code (IPC), even if the offences alleged arise from the same underlying actions or omissions that led to infractions of FEMA.”
The High Court gave these observations while hearing petitions filed by Manideep Mago and Sanjay Sethi, who were accused in a case involving the ED and the Delhi Police.
They were arrested for committing offences under FEMA and IPC and had approached the court challenging their arrests. They also asked the court to cancel the remand orders passed against them.
After examining the matter, the Court upheld their arrest by the ED, saying it was legally done.
But at the same time, the Court found that Delhi Police’s arrest of the accused was not legal and was against the directions issued earlier by the Supreme Court in the case of Prabir Purkayastha.
Justice Bhambhani found that the Delhi Police violated the law as laid down in the Prabir Purkayastha judgment, and therefore quashed the arrest made by the Delhi Police. But the ED’s arrest was held valid.
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In the court, Senior Advocate Vikram Chaudhri appeared for Manideep Mago, along with Advocates Raktim Gogoi, Arveen Sekhon, Rishi Sehgal, Shivam Pal Sharma, Anuj Kumar, and Ishaan Sahai.
Sanjay Sethi was represented by Advocates Raktim Gogoi, Arveen Sekhon, Rishi Sehgal, Shivam Pal Sharma, Anuj Kumar, and Ishaan Sahai.
The Enforcement Directorate (ED) was represented by Special Counsel Zoheb Hossain, Panel Counsel Vivek Gurnani, and Advocates Pranjal Tripathi and Kartik Sabharwal.
For the Delhi Police, Additional Standing Counsel (ASC) Amol Sinha appeared along with Advocates Kshitiz Garg, Ashvini Kumar, and Nitish Dhawan.
The Central Government was represented by Central Government Standing Counsels (CGSCs) Dr B Ramaswamy and Amit Tiwari, with Advocates Hussain Taqvi, Ayush Tanwar, and Ayushi Srivastava.
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This judgment of the Delhi High Court provides an important clarification on how Supreme Court decisions like in Arvind Kejriwal’s case are to be applied going forward and also clearly draws the line between FEMA and IPC offences.
Case Title:
Manideep Mago v Union of India & Ors
READ JUDGEMENT:
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