ED Cannot Arrest On Same Material After Invoking Power U/S 50 PMLA To Question Accused: Bombay High Court
The Court termed the arrest a “colourable exercise of power”, quashed three remand orders and directs release; declines ED’s plea for two-week stay to approach Supreme Court.
Justice Milind N. Jadhav, Bombay High Court
The Bombay High Court has held that once the Enforcement Directorate invokes its power under Section 50(2) and (3) of the Prevention of Money Laundering Act, 2002 to summon and confront an accused with material in its possession, it cannot forgo that exercise and arrest him under Section 19 on the same material. It may do so only if a “very strong and fresh circumstance and material” incriminating the accused is placed on record.
Allowing the petition, the Court said such an arrest “shall amount to a colourable exercise of power”. It declared the arrest illegal, quashed the remand orders dated June 23, June 29 and July 4, 2026, and directed the petitioner’s forthwith release. It declined the ED’s oral request to stay the order for two weeks.
A Bench of Justice Milind N. Jadhav observed, “…once a very valuable statutory power having been invoked by Respondent No.1 under Section 50 and more specifically under Section 50(2) and (3), then it cannot be open to Respondent No.1 to forego the same and notwithstanding completion of that action invoke Section 19 to arrest the Petitioner, unless a very strong and fresh circumstance and material incriminating the Petitioner is placed on the record before the Court and the Court feels that arrest is absolutely imminent on the basis of such material and records its reasons to believe on the basis of such new found material. This is primarily because sub-section (4) of Section 50 categorically states that every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of Section 193 and Section 228 of the Indian Penal Code, 1860 (for short ‘IPC’)”.
“…by foregoing the exercise of recording the statements, Respondent No.1 cannot arrest the Petitioner. Such exercise of power of arrest shall amount to a colourable exercise of power on the part of Respondent No.1 – ED”, the Bench said.
Senior Advocate Ravindra Kadam appeared for the appellant and Advocate C.R. Pendse appeared for the respondent.
In the matter an FIR was registered on October 6, 2023, and thereafter, ED registered an ECIR on December 26, 2023. The petitioner was charge-sheeted in a supplementary charge-sheet on May 14, 2024, and is alleged to have used dummy firms and mule accounts, with forged documents, to remit ₹7,569 crore abroad. He was granted regular bail on June 7, 2024.
Between January 2, 2025 and June 27, 2026, his statements were recorded on 38 occasions. The ED arrested him on June 23, 2026, and the Special Court under the PMLA granted remand on that date, on June 29 and on July 4. He challenged the arrest and remand orders under Article 227 of the Constitution and Sections 528 and 529 of the BNSS, 2023.
The Court noted that the ED itself had sought and obtained the Special Court’s permission under Section 50(2) and (3) to confront the petitioner with the material in its possession. It recorded that the ED’s counsel candidly accepted that no new incriminating material surfaced between May 22 and June 23, 2026. The ED’s plea that the petitioner was non-cooperative was rejected, since he had appeared repeatedly and no attempt was made to question him for over a month before the arrest.
It held that the power to arrest under Section 19(1) is “drastic,” discretionary, and “not for the purpose of investigation,” relying on Radhika Agarwal v. Union of India (2025) SCC OnLine SC 449. It said the gravity of the offence did not alter this, and that courts can review the legality of an arrest, since this is inherent in Section 19. It also observed that a contrary view would render the definition of “investigation” in Section 2(na) “completely negatory.”
The Court allowed prayer clauses (a) and (b), declared the arrest illegal and quashed the three remand orders and any subsequent ones. It directed the petitioner’s release on the strength of an authenticated copy of the order downloaded from the High Court website. It declined the ED’s request for a two-week stay.
Cause Title: Jitendra Pandey v. Directorate of Enforcement and another (Neutral Citation: 2026:BHC-AS:43626)
Appearances:
Appellant: Ravindra Kadam, Senior Advocate, Shrey S. Lodha, Dulraj Jain, Aryan Kotwal, Anjali Joshi, Hrutik Chavan and Aarti Nishad, instructed by D’vocate Legal LLP.
Respondent: C.R. Pendse, Atharva S. Jagtap, Amit Mane, Advocates, Amit Munde, APP.