ED challenges court’s order declaring bizman’s arrest illegal

The Enforcement Directorate (ED) on Friday approached the Bombay high court, challenging a special court order declaring the arrest of businessman Purushottam Mandhana (70), the ex-chairman and managing director (CMD) of the erstwhile Mandhana Industries Limited (MIL), illegal

MUMBAI: The Enforcement Directorate (ED) on Friday approached the Bombay high court, challenging a special court order declaring the arrest of businessman Purushottam Mandhana (70), the ex-chairman and managing director (CMD) of the erstwhile Mandhana Industries Limited (MIL), illegal.

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Mandhana was nabbed by the agency as part of its money-laundering investigation into an alleged ₹975 crore bank loan fraud case against MIL and others. Contending that it had effected the arrest of Mandhana as per law, the ED submitted before the court that the impugned order of the special court was “perverse, illegal and deserves to be quashed and set aside”.

ED’s appeal has been listed on August 2 for hearing. The special court had on Friday last remanded Mandhana to ED’s custody for six days after he had been produced after his arrest.

Referring to this order, the agency told HC that it records “detailed reasons in writing with respect to why the arrest and custody of the respondent accused is warranted.” Hence, the special court’s order calling the arrest illegal amounted to recalling of its own order, ED contended.

It also stated in its appeal that as per section 19 (3) of the Prevention of Money Laundering Act, once a person gets arrested, he or she must be produced before the special court having jurisdiction within 24 hours, which was done in Mandhana’s case.

ED also submitted before the HC that at the stage of 167(2) of the CrPC, the court has limited powers to authorise detention of the accused, as the court may deem fit, whether in custody of the officer in charge or of the Magistrate, which in this case is the special judge himself. ED stated before the HC that, once the accused is remanded to custody under Section 167(2) of the CrPC, the Magistrate can only change the custody beyond within the first 60 or 90 days from the date of the arrest of a person.

The ED also challenged the special court’s July 25 order on the ground that it had allegedly failed to appreciate that the Prevention of Money Laundering Rules 2005, relating to the arrest of an accused under PMLA and forwarding of material at the time of remand. ED has argued that the same rules have been duly complied with and hence does not accord any reason for declaring the arrest to be illegal.