HC declares arrest of MPID case accused illegal as cops failed to furnish grounds of his arrest

Bombay HC declares arrest under MPID Act illegal as Malad police failed to provide grounds in writing. Accused Mahesh Naik to be released on bail.

MUMBAI: The Bombay high court on Thursday said the arrest of an accused booked in a case under the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, or the MPID Act, was illegal, as the Malad police had failed to communicate the grounds of his arrest in writing before apprehending him.

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The Maharashtra state legislature passed the MPID Act in 1999 to protect the interests of depositors in financial establishments.

The division bench of justice Bharati Dangre and justice Manjusha Deshpande has now ordered that the accused, Mahesh Naik, be released on bail on conditions to be set out by the trial court.

“It is evident that the grounds of arrest were not furnished to the petitioner in writing,” said the bench while declaring Naik’s arrest illegal. The bench said since his arrest was “not compliant” with clause Article 22(1) of the Constitution of India (any person who is in custody has to be informed as to why he has been arrested) and section 50 of the Code of Criminal Procedure, 1973, (person arrested to be informed of grounds of arrest and of right to bail) it was declared that his arrest in connection with the FIR registered with the Malad police station was “illegal and in gross violation of his fundamental right.”

Though the FIR was registered in February 2020, for criminal breach of trust and cheating and relevant sections of MPID for duping investors, Naik was arrested on February 22, 2024. He was produced before a court that remanded him initially to police custody and later to judicial custody. Even as the police completed the investigation and filed a chargesheet against him on May 22, Naik moved the high court, seeking a declaration that his arrest was illegal, claiming that the police did not communicate the ground of his arrest in writing before arresting him, and therefore his immediate release from jail.

In support of the argument, his counsel relied on the Supreme Court’s verdict in Pankaj Bansal’s case delivered on October 3, 2023.

In that case, the apex court has interpreted the right of accused persons enshrined in Article 22(1) of the Constitution and held that it was imperative for all investigating agencies to furnish grounds of arrest in writing to the accused person before arresting him. His lawyer, Rishi Bhuta, argued that, without compliance with the requirements, Naik’s arrest was vitiated and therefore required him to be enlarged.

The bench accepted his argument and held that not furnishing grounds of arrest to the accused person in writing before arresting him would be a violation of the mandate enshrined in Article 22(1) of the Constitution, as interpreted by the Supreme Court, and therefore would render the arrest illegal.

Apart from ordering Naik to be released on bail, the court has also instructed public prosecutor Hiten Venegaonkar to furnish a copy of the judgement to the Director General of Police, so that the right of the accused persons, under Article 22(1) is brought to the notice of all police units across the state.