HC rejects city builder Vijay Machindar’s challenge to his ED arrest

The Bombay High Court dismissed a petition filed by builder Vijay Machindar, who is facing a money laundering probe by the Enforcement Directorate (ED). The court upheld Machindar's arrest and stated that the ED had complied with the requirements of the Prevention of Money Laundering Act (PMLA).

MUMBAI: The Bombay high court last week dismissed a petition filed by city builder Vijay Machindar of Ornate Spaces, questioning his arrest by the Enforcement Directorate (ED). ED has initiated a money laundering probe against Machindar, based on an FIR registered with the Oshiwara police station in December 2021, accusing him of duping several flat buyers in Grove Tower of ₹74 crore.

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The investigation by ED also revealed that his firm, Ornate Spaces, has taken loans from various financial institutions, and an amount of ₹585.17 crore was still outstanding.

The agency arrested Machindar on January 3 in the money laundering case. On January 4, he was produced before the special PMLA (Prevention of Money Laundering Act) court and remanded to ED’s custody till January 12.

He then moved the high court, challenging his arrest by the anti-money laundering agency, primarily contending that the investigating officer did not specify why his arrest was necessary. His counsel argued that Section 19 of the PML Act mandates the authorised officer to record reasons about his satisfaction for effecting the arrest in writing.

His counsel argued that except for reiterating the contents of the predicate offence since no such reasons were recorded in the Remand Application, the mandate of Section 19 of the PMLA was not complied with, and as such that the remand of the builder to ED custody was rendered illegal, and he was required to be released from detention.

The argument, however, failed to impress the single-judge bench of justice Prakash D Naik, who held that the agency had complied with requirements of the Section 19 of the PMLA.

The judge said written grounds of arrest were served upon Machindar, and the special PMLA court had ascertained this fact when the builder produced it for remand, and the order indicated that he had informed the special court that the grounds of arrest were supplied to him.

“Considering the contents of the remand application, grounds of arrest, arrest order, and communication forwarded to the Adjudicating Authority, I am of the considered opinion that there is compliance with Section 19 of the PML Act,” said justice Naik while dismissing the builder’s petition.

“The offence is of a serious nature. The investigation is in progress. The learned special (PMLA) judge has rightly held that ED custody of the petitioner is necessary. The remand order assigned reasons. The remand order reflects the application of mind by the Court qua Section 19 of the PML Act. Hence, there is no reason to hold that the remand of the petitioner is illegal,” the bench concluded.