Delhi HC rejects bail plea of ex-MD of Bhushan Steel Neeraj Singal in Rs. 46000 cr scam [Read Judgment]

NEW DELHI: The Delhi High Court has rejected the bail plea of former Managing Director of Bhushan Steel Ltd in a case alleging loss of Rs. 46,000 cr to the public at large.

Dismissing Singal’s plea alleging that grounds of arrest were not shown to him, a single judge bench of Justice Vikas Mahajan held “…merely because each page of the ‘ground of arrest’ is not signed by the petitioner cannot be a reason to disbelieve the existence of the said document, or to negate the fact that the grounds of arrest were shown and informed to the petitioner.”

Rejecting Singal’s arguments that the place of arrest is wrongly recorded in the Arrest Memo, which implies that the Memo was executed later, the Court relied heavily on the fact that Singal had made corrections in his own handwriting in the ‘ground of arrest’.

Singal had inserted in the same that his wife has been informed of his arrest “physically” at “22.28” on June 9, 2023. The Court concluded that this meant he was arrested from his residence. It also said that despite the fact that this ‘Arrest Memo’ was there with Singal from the date of arrest itself, he had not raised any dispute about it either in his petition or in the bail application, nor raised before the Special Judge.

Thus, the Court concluded that recording of the place of arrest as “Pravartan Bhawan” instead of Singal’s residence, Greater Kailash, was a mere typographical error, and this alone would not vitiate his arrest.

Further, the Court said that Singal and his wife had been furnished a copy of the panchnama (also counter-signed by his wife) which recorded that the Arresting Officer had presented the ‘Arrest Memo’ to Singal and informed him the grounds of arrest.

Importantly, the Court also held that at the time of Singal’s arrest, the applicable law regarding grounds of arrest was as laid down in the case of Moin Akhtar Qureshi which continued it was specifically overruled in the case of Pankaj Bansal. 

Therefore, it held that at the time that Singal was arrested, oral communication of the grounds of arrest was sufficient and in compliance with the provisions of Section 19(1) of the PMLA.

Singal’s arguments

Singal who was represented by Sr. Adv. Kapil Sibal, Sr. Adv. Vikas Pahwa, and Sr. Adv. Dr. Abhishek Manu Singhvi, disputed the very existence of ‘ground of arrest’ and ‘arrest order’ / ‘reasons to believe’ at the time of his arrest right from the very beginning as is evident from the remand order dated 10.06.2023.

He argued that the ‘Arrest Memo’ was the only document which was supplied to him, and the same finds reference in the Panchnama since the arrest was made during the search proceedings. He contended that there is no reference to the ‘Arrest Order’ and the ‘ground of arrest’ in the panchnama since they were not handed to him in the first place.

He also argued that the ‘Arrest Order’ states that the petitioner was arrested at Pravartan Bhawan, which showed that it was not in existence at the time when the search was carried out at Singal’s residence. 

He further submitted that though the Arrest Order bore Singal’s signature as an acknowledgement of having received the Arrest Memo, there was no acknowledgement of being informed of the grounds of his arrest.

Enforcement Directorate’s arguments

The ED’s counsel Adv. Zoheb Hussain argued that Singal’s argument had always been that he had been shown the ground of arrest but not ‘provided with’ them. 

He said that this was evidenced by the fact that when the Special Judge noted in his order that Singal “provided with grounds of his arrest and same is duly signed by him and countersigned by two independent witnesses,” he had sought rectification of the order and merely prayed to replace the word “provided” with the word “shown”, and sought no other changes. 

ED argued that this establishes that the ‘ground of arrest’ were shown to Singal and he duly signed the same as a token thereof.

It pointed out that the ‘ground of arrest’ also clearly bore Singal’s signatures at two points and the Singal had also appended a date on the same. 

Hossain also pointed out that the fact that his wife’s name was recorded in his own handwriting as the person informed of his arrest. He submitted that the endorsement on the ‘ground of arrest’ that the Singal informed about his arrest ‘physically’ shows that the arrest had taken place at his residence in the presence of his wife.

Importantly, ED submitted that as laid down in the case of Ram Kishor Arora, furnishing grounds of arrest to the accused/arrested person in writing was not mandatory or obligatory till the date of directions passed in the case of Pankaj Bansal on October 3, 2023 therefore, non-furnishing of grounds of arrest to the petitioner in writing, who was arrested on June 9, 2023, could not be held illegal.

ED further contended that as on the date of Singal’s arrest it was the law laid down in the case of Moin Akhtar Qureshi which continued till it was specifically overruled, meaning that at the time of Singal’s arrest, oral communication of the grounds of arrest was proper compliance of the provisions of Section 19(1) of the PMLA.

Court’s decision

Agreeing with the ED’s contention, the Delhi High Court held that its position is also fortified by the observation of the Supreme Court in the case of Ram Kishor Arora wherein it held that furnishing of grounds of arrest in writing till the date of judgment in the Pankaj Bansal case could neither be held to be illegal nor the action of the concerned officer in not furnishing the same in writing could be faulted with.

Cause Title: Neeraj Singal v Directorate of Enforcement

[Read Judgment]