Case at a Glance
An accused in an alleged ₹1,618 crore money-laundering case had been on regular bail since June 2024 and was questioned by the Enforcement Directorate under Section 50 of the PMLA about 38 times over 18 months. On 23 June 2026 the ED arrested him under Section 19, while conceding before the High Court that no new incriminating material had emerged in the month before the arrest. The Bombay High Court held that once the ED invokes Section 50 to question an accused, it cannot arrest him on the same material without strong, fresh material; it declared the arrest illegal, quashed the remand orders, directed his release forthwith and refused the ED’s request for a two-week stay.
The case arises from FIR No. 294 of 2023 registered at Naupada Police Station, Thane, for offences including cheating and forgery, and ECIR/MBZO-I/53/2023 registered by the Enforcement Directorate on 26 December 2023, showing proceeds of crime of ₹1,618 crore. The ED alleged a scheme involving dummy partnership firms and companies, mule bank accounts and forged trade documents used to remit thousands of crores abroad. The petitioner, Jitendra Pandey, was arrested on 31 March 2024, named as Accused No. 1 in a supplementary charge-sheet on 14 May 2024, and granted regular bail on 7 June 2024.
Between January 2025 and May 2026 the ED recorded his statements under Section 50 of the Prevention of Money Laundering Act, 2002 on numerous occasions and conducted searches. On 23 June 2026 he was arrested again under Section 19 and remanded to ED custody by the Special PMLA Court in Mumbai; further remand orders followed on 29 June and 4 July 2026, when the ED also obtained permission to record his further statement under Section 50. He petitioned the High Court under Article 227 and Sections 528 and 529 of the BNSS, seeking a declaration that the arrest was illegal.
The Key Question Before the Court
Having invoked Section 50 of the PMLA to summon and question an accused repeatedly, can the ED arrest him under Section 19 on the same material, without any fresh incriminating material?
“Power to Arrest Can and Should Wait”
Justice Milind N. Jadhav noted that the ED’s counsel accepted that no new incriminating material had emerged between 22 May 2026 and the arrest on 23 June 2026. The Court held that the officer’s ‘reasons to believe’ under Section 19 must rest on material in his possession, that the ‘may arrest’ in Section 19(1) is discretionary, and that the power to arrest is “a very drastic and extreme action.” Under Section 50(4), proceedings under Section 50 are judicial proceedings; once the ED has chosen that route to confront the accused with material already in its possession, it cannot abandon it and arrest him on the same material without strong, fresh incriminating material.
The Court found that the petitioner had cooperated, appearing on 38 occasions over 18 months, so the question of non-cooperation “would never arise”. Gravity of the offence was relevant but could not override the absence of new material. Relying on Radhika Agarwal v. Union of India (which drew on Arvind Kejriwal v. Directorate of Enforcement, (2024) 07 SC CK 0035, Prabir Purkayastha v. State (NCT of Delhi), (2024) 05 SC CK 3145 and Vijay Madanlal Choudhary v. Union of India, (2022) 07 SC CK 0102) and on the Karnataka High Court’s decision in Deepak Singh v. Directorate of Enforcement, the Court held that arrest cannot be used merely to facilitate investigation, that old material cannot animate a new arrest, and that arresting in these circumstances “shall amount to a colourable exercise of power.” Courts can judicially review the legality of arrest because the safeguards are inherent in Section 19.
What the Court Actually Held
- Once the ED invokes Section 50(2) and (3) to summon and question an accused, it cannot arrest him under Section 19 on the same material unless strong, fresh incriminating material is on record.
- The power of arrest under Section 19(1) is discretionary and drastic; it is not a tool for investigation, and the gravity of the offence alone cannot justify it.
- The arrest was declared illegal and violative of Section 19(1) of the PMLA and Articles 14 and 21; the remand orders dated 23 June, 29 June and 4 July 2026 and any later remand orders were quashed.
- The petitioner was directed to be released forthwith, and the ED’s request for a two-week stay to approach the Supreme Court was declined.
Why This Judgment Matters
- It sets a clear limit on re-arresting an accused already on bail who has been cooperating with repeated questioning.
- It applies the Supreme Court’s safeguards in Radhika Agarwal and Arvind Kejriwal on ‘reasons to believe’ to a concrete fact situation.
- It confirms that constitutional courts can examine the legality of a PMLA arrest despite the seriousness of the allegations.
What Should Advocates Take Away From the Judgment?
For Accused Persons
- Keep a record of every Section 50 summons and appearance; consistent cooperation weighed heavily in this case.
- An arrest after prolonged questioning, without fresh material, can be challenged as illegal.
- Relief here came through a writ petition under Article 227 read with Sections 528 and 529 BNSS.
For Counsel
- Press the ED to state whether any new material emerged after the last Section 50 statement — the concession here decided the case.
- Rely on Section 50(4) (judicial proceedings) to argue that the ED cannot abandon a court-permitted Section 50 exercise for arrest on the same material.
- Cite Radhika Agarwal v. Union of India and Deepak Singh v. Directorate of Enforcement on old material and colourable exercise of power.
Key Takeaways
- No fresh material, no fresh arrest after repeated Section 50 questioning.
- Arrest under Section 19 PMLA is discretionary and cannot be used to investigate.
- Cooperation through 38 appearances ruled out the non-cooperation ground.
- Arrest declared illegal, remands quashed, release ordered, stay refused.
Frequently Asked Questions
Can the ED arrest someone it has already questioned many times?
According to this ruling, not on the same material. Once Section 50 has been invoked, an arrest needs strong, fresh incriminating material; otherwise it is a colourable exercise of power.
Does the seriousness of a money-laundering case justify arrest?
The Court accepted that gravity is relevant but held that it cannot override the absence of new material or the statutory safeguards in Section 19.
Did the High Court decide whether he is guilty?
No. The Court only examined the legality of the June 2026 arrest and remand orders; the money-laundering proceedings continue.
Conclusion
The Bombay High Court has held that the ED cannot keep an accused on a long chain of Section 50 summonses and then arrest him on the same material, with no fresh evidence and no sign of non-cooperation. It declared the arrest illegal, quashed the remand orders and refused to stay its own order.
Practical takeaway: In PMLA cases, an arrest after prolonged cooperation and questioning must be justified by new material recorded in the officer’s reasons to believe; where the ED concedes there is none, the arrest is open to challenge.
Read the full judgment on CourtKutchehry: View judgment →
For more judgments, legal opinions and case analysis, visit courtkutchehry.com