Bombay High Court
SITARAM SUDAMA GUPTAversusTHE UNION OF INDIA AND ANR.
- Decided
- Disposal
- Dismissed
Holding
The Court held that the arrest and remand of the petitioner under the PMLA were lawful as the Enforcement Directorate possessed sufficient prima facie material, complied with Section 19, and police custody for interrogation is permissible at the investigative stage.
Summary
The petitioner, Sitaram Sudama Gupta, challenged his arrest and police custody ordered by an Additional Sessions Judge under the Prevention of Money Laundering Act, 2002, alleging that no investigation had been completed and that the grounds of arrest were furnished only in English, which he could not understand. The High Court examined whether the Enforcement Directorate had complied with the statutory requirements of Section 19 of the PMLA, including furnishing the arrest memo and grounds, and whether police custody for custodial interrogation is permissible at the investigative stage. Relying on precedents such as Pankaj Bansal v. Union of India and Vijay Madanlal Choudhary v. Union of India, the Court held that the supply of a copy of the ECIR is not mandatory and that police custody does not require a completed investigation. The Court found that the ED had sufficient prima facie material, that the arrest memo and grounds were provided, and that the investigation was at a primary stage necessitating custodial interrogation. Consequently, the writ petition seeking a declaration of illegal arrest was dismissed, and the remand order was upheld.
Issues considered
- Whether the arrest of the petitioner under the PMLA without a completed investigation violates statutory requirements.
- Whether furnishing the grounds of arrest only in English infringes the petitioner's constitutional rights.
- Whether the non‑supply of a copy of the ECIR to the accused contravenes the right to be informed of the grounds of arrest.
- Whether police custody for custodial interrogation is permissible at the preliminary stage of a money‑laundering investigation.
Legislation cited
- Prevention of Money Laundering Act, 2002 — s. 13(1)(b), 13(2), 19, 2(1)(u), 2(1)(v), 3, 4
Subjects
- Prevention of Money Laundering Act
- arrest
- police custody
- economic offence
- remand
- constitutional rights
- language barrier
- ECIR
- investigation
- money laundering
Judgment
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO.119 OF 2026
Sitaram Sudama Gupta, ]
Aged 62 years, Occ. Business, ]
R/at Room No.1, Raghunath Colony, ]
Santosh Bhuvan Naka, ]
Nalasopara (East), Vasai, ]
Palghar – 401 209. ]
(At present lodged in Mumbai Central ]
Prison, Arthur Road, Mumbai) ] .. Petitioner
Versus
1. The Union of India, ]
Through the Enforcement Directorate, ]
Mumbai Zonal Office II, 301 & 302, ]
3rd Floor, Ceejay House, Dr. A.B. Road, ]
Worli, Mumbai - 400 018. ]
2. The State of Maharashtra ] .. Respondents
Mr. Mithilesh Mishra, i/by Mr. Subash Hulyalkar, Advocates for
the Petitioner.
Mr. S.V. Gavand, Additional Public Prosecutor for the Respondent-
State of Maharashtra.
CORAM : SHREE CHANDRASHEKHAR, CJ. &
GAUTAM A. ANKHAD, J.
DATE : 17TH JANUARY 2026.
P.C. :
Laying a challenge to the orders dated 14 th August 2025 and
20th August 2025 passed by the learned Additional Sessions
Judge, designated as a Special Court under the Prevention of
Money Laundering Act, 2002 (“PMLA”), City Civil & Sessions
Court, Mumbai in Remand Application No.1136 of 2025 in ECIR
No.ECIR/MBZO-II/10/2025, Mr. Sitaram Sudama Gupta who is
the accused no.1 in ECIR No.ECIR/MBZO-II/10/2025 has filed
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this writ petition seeking a declaration that his arrest was illegal
and unnecessary in connection to ECIR/MBZO-II/26/2023 dated
24th February 2023 and ECIR/MBZO-II/10/2025 dated 21 st
February 2025.
2. Mr. Mithilesh Mishra, the learned counsel for the petitioner
contends that without any enquiry or investigation and without
recording a finding that the petitioner is guilty of the offence under
the PMLA, he has been arrested. The reasons of arrest and the
grounds of arrest were furnished to the petitioner in English
language who is not acquainted with the same. There is no finding
recorded by the Investigating Officer that the petitioner has any
role to play in the transaction relating to the proceeds of crime or
he was benefited from such property. To lay support to his
submission that no enquiry or investigation was conducted, the
learned counsel for the petitioner has placed reliance on
paragraph no.16(i) of the order dated 14th August 2025 which
reads as under:
“16. It is submitted that the ED custody of the accused is
necessary for the investigation on the following grounds that;
(i) To investigate and ascertain role and involvement of
other persons in this huge scam who are actually
involved or knowingly assisted in the commission of
the offence of money laundering.”
3. In addition, the learned counsel for the petitioner submitted
that the ECIR was registered in the year 2023 and the petitioner
appeared before the Enforcement Directorate pursuant to several
summons issued to him but he was not arrested.
4. Keeping in mind the object behind the PMLA while
adjudicating a challenge to the legality of arrest of an accused, the
Court is required to bestow its attention to the definition of the
expression “property” under clause (v) of sub-section (1) to section
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2 of the PMLA which provides that any property or assets of every
description, whether corporeal or incorporeal, movable or
immovable, tangible or intangible shall be covered by the
expression “property”. It shall also include the deeds and
instruments evidencing title to or interest in such property or
assets wherever located. Besides defining the expression “proceeds
of crime” in a wide manner, the Explanation to sub-section (u) to
section 2(1) provides that proceeds of crime shall include property
not only derived or obtained from scheduled offence but also any
property which may directly or indirectly be derived or obtained as
a result of any criminal activity relating to a scheduled offence. As
to the ground that the petitioner appeared pursuant to the
summons issued to him when he was not arrested, it needs to be
indicated that this was for the Investigating Officer to take a call
whether or not and when to arrest the accused. Paragraph no.16
of the order dated 14th August 2025 passed in Remand Application
No.1136 of 2025 on which much stress has been laid by the
learned counsel for the petitioner is in relation to the police
custody and not the judicial custody. It is well recognized in legal
parlance that a police custody of an accused is taken for his
custodial interrogation and it is not necessary that the enquiry or
investigation undertaken in the matter shall be complete.
Paragraph no.16(i) of the order records that to investigate and
ascertain role and involvement of other persons in the huge scam
who were actually involved or knowingly assisted in the
commission of offence of money laundering, a request for the
remand application seeking police custody of the petitioner and
others was made.
5. In the order dated 14th August 2025, the learned Additional
Sessions Judge, designated as a Special Court under the PMLA
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referred to the rival submissions and the decisions referred to on
behalf of the petitioner in “Pankaj Bansal v. Union of India &
Ors.”1, “Prabir Purkaystha v. State” 2 and “Arvind Kejriwal v.
Directorate of Enforcement”3. The learned Additional Sessions
Judge also referred to the decisions in “Vijay Madanlal Choudhary
& Ors. v. Union of India & Ors.” 4 and “Arvind Kejriwal v. Directorate
of Enforcement”5 and allowed Remand Application No.1136 of
2025 by observing as under:-
“25. In the light of the rival submissions of both the parties, I have
carefully gone through the remand application and the record
of the case. The offence is serious economic offence affecting
the socio economic condition of the society having
transnational impact on the financial systems including
sovereignty and integrity of the country. The PMLA is a sui
generis legislation having different mechanism in respect of
investigation, arrest, seizure etc. The investigation in case of
money laundering requires a systematic approach. The
offence under section 3 of the PMLA is a different and
standalone offence. The ECIR cannot be equated with an FIR
which is mandatorily required to be recorded and supplied to
the accused. In Vijay Madanlal Choudhary and Others v.
Directorate of Enforcement and Others, the Hon’ble Apex
Court has held that supply of copy of ECIR is not mandatory
and it is enough if ED at the time of arrest discloses the
grounds of arrest. It is held that non-supply of ECIR cannot be
cited as violation of the Constitutional right.
26. There are specific allegations that accused nos.1 and 2
constructed 41 illegal buildings without permission on
Government premises/private land and sold units to the
public and the said illegal construction has been demolished
by the orders of the Hon’ble Bombay High Court. Admittedly,
since the Hon’ble Bombay High Court ordered to demolish the
41 buildings, the construction of those buildings was illegal.
There are specific allegations that the alleged 60 acres
Government/private land was sold illegally based on forged
Agreement/Power of Attorney tolocal builders who from 2013-
2021 constructed 41 buildings with close connivance of
VVCMC officials/officers. There are specific allegations that
1 2024(7) SCC 576
2 (2024) 8 SCC 254
3 2025(2) SCC 248
4 (2023) 12 SCC 1
5 Criminal Appeal No.2493 of 2024 dated 12th July 2024
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the accused nos.1 and 2 have received substantial amount of
money in cash for the sale of the alleged 60 acres
Government/private land illegally to local builders and they
have actually involved in generation, acquisition and
possession of the POC which has been derived from selling
the land illegally through forged Agreement/Power of
Attorney. An amount of Rs.45 lakhs has been seized from the
house of accused no.1 during the search. There are specific
allegations that the officers of VVCMC were bribed to permit
illegal constructions and evade demolition. The specific role of
accused nos.1 and 2 has been mentioned in the remand
application and in the reasons to believe and grounds of
arrest. There are specific allegations that accused no.3 has
received substantial amount of bribe. The huge cash
amounting to Rs.8.23 crores and Diamond Studded Jewellery
worth Rs.23.25 crore has been seized from the premises of
accused no.3 and there are specific allegations that he has
organized a cartel of VVCMC officers, Junior Engineers,
Architects, CAs and Liasoners and was involved in an
organized action plan to acquire the POC by committing illegal
omission to perform his public duty and thereafter granting
development permissions at fixed rate. The whatsapp chats
are also recovered wherein it was revealed that code words
were used for collecting commission/bribe amount for
accused nos.3 and 4. There are specific allegations that
accused no.4 has not taken any action in respect of illegal
construction and he has flourished the already existing cartel
comprising of senior VVCMC officers for taking
commission/bribe amount at the total rate of Rs.150 per sq.ft.
There are specific allegations that accused no.4 has charged
huge commission/bribe for granting various development
permissions required from VVCMC for starting different
residential/commercial/other projects and code words were
used for receiving the commission. According to ED, accused
no.4 is actually involved in the commission of offence and
offence of money laundering by way of acquisition,
possession and concealment of the POC and transferring the
said POC to his relative. The said fact has been confirmed in
the statements of witnesses and whatsapp chats.
27. The arrest order, arrest memo, grounds of arrest and reasons
to believe has been already furnished to the accused in
compliance of section 19 of the PMLA and the decision in
Pankaj Bansal v. Union of India. According to ED, the remand
report as well as reasons to believe and grounds of arrest
clearly indicate that accused are involved in the offence of
money laundering. Considering the material on record, the ED
Officer has reasons to believe that the accused have
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committed an offence punishable under section 4 of PMLA.
Considering the record of the predicate offence and ECIR and
the reasons to believe and grounds of arrest, it shows that
there is prima-facie material in the possession of the officer of
ED to believe that the accused are guilty of the offence
punishable under the PMLA. From the record, it shows that
there is sufficient compliance of section 19 of PMLA. It is also
submitted that accused no.4 has not been cooperated at the
time of search and he has deleted the whatsapp chats and
data found in his mobile. The grounds of arrest clearly
indicates that there is necessity to arrest the accused for the
purpose of proper and effective investigation. Therefore,
considering the material on record it cannot be said that the
arrest of the accused is illegal and there is no necessity of the
arrest of accused.
28. The investigation is at primary stage. The Investigating Officer
wanted to investigate and ascertain role and involvement of
other persons in this huge scam; to identify the other
beneficiaries of the POC, to trave the end utilization of the
POC; to identify the properties acquired through the POC and
to investigate and identify the ultimate use of the cash so
collected from the various builders/Architects/Liasoners.
According to ED, there is possibility of cross-border
implications leading to utilziation of crime proceeds not only in
India but outside India. The grounds for ED custody are
sufficient and cogent. According to ED, there is no concern in
respect of Crime No.II-54/2016 in which accused no.3 is
discharged. Crime No.330/2025 has been registered against
accused no.3 under section 13(1)(b) and 13(2) of the PC Act
which is a scheduled offence. According to ED, the accused
no.4 has received huge amount of cash from accused no.3. He
has incorporated various firms in order to channelize and
utilize the POC. The investigation in respect of the POC is in
progress, therefore, the exact POC amount can be quantified
after the investigation. According to ED, crores of rupees were
generated as POC. Therefore, merely because the exact
amount of POC is not mentioned, it cannot be said that the
offence under section 3 is not attracted.
29. Considering the nature, seriousness and gravity of the
offence, the larger interest of the society and the grounds for
ED custody, the custodial interrogation of the accused is
necessary for the proper and effective investigation of the
crime. Unless the accused are remanded in the custody of ED,
the investigation will not be conducted in a proper and
effective manner. The huge amount of public money are
involved in the scam. 2500 families become homeless due to
the demolition of the illegal 41 buildings. If the ED custody of
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accused in not granted, there is high possibility of frustration
of the investigation. Therefore, the custodial interrogation of
the accused is necessary for proper and effective investigation
of the economic offence. Hence, I proceed to pass the following
order:-
ORDER
1. The accused no.1 – Sitaram Sudama Gupta, No.2 –
Arun Sadanand Gupta, No.3 – Y. Shiva Reddy and
No.4 – Anil Kumar Khanderao Pawar are remanded
in the custody of ED till 20th August 2025.
2. All original papers are returned back to the officer of
Directorate of Enforcement.”
6. The above order is well reasoned and the investigation is
ongoing. No case is made out to interfere with the impugned order.
The submission made by the learned counsel for the petitioner
that the furnishing of arrest order, grounds of arrest and reasons
of arrest in English language shall infringe the rights of the
petitioner is not corroborated by the materials on record. In the
grounds of arrest which was furnished to the petitioner on
13th August 2025 at 5:55 p.m., it has been stated that the
petitioner was intimated about the grounds for arrest and reasons
to believe at the time of his arrest. Such expression shall simply
indicate that the grounds of arrest and reasons of arrest have
been explained to the petitioner.
7. Writ Petition No.119 of 2026 is dismissed.
[ GAUTAM A. ANKHAD, J. ] [ CHIEF JUSTICE ]
Digitally
signed by
SNEHA SNEHA
ABHAY
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Date:
DIXIT 2026.02.04
14:55:12
+0530
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