Custodial Interrogation Isn't Automatic: Punjab & Haryana HC Criticizes ED Remand Process

Punjab and Haryana High Court delivered a scathing judgment overturning the remand and custodial orders issued by a Special Court in a money-laundering case. Justice Mahabir Singh Sindhu criticized the lack of judicial rigor in approving the Enforcement Directorate's (ED) application for the custodial interrogation of the petitioner, Balwant Singh, a businessman implicated in a ₹46-crore financial fraud.
"Custody Must Be Justified, Not Routine": High Court on Judicial Oversight
The Court reprimanded the Special Court for granting remand without substantive reasoning, declaring the decision “indefensible in law” and contrary to the constitutional protections under Article 21. Justice Sindhu remarked, “Judicial officers assigned to Special Courts under the PMLA are not mere extensions of investigating agencies. They are bound to safeguard individual liberties and ensure rigorous adherence to statutory requirements before depriving a person of their freedom.”
The controversy began with allegations of financial irregularities by Tara Corporation Limited (TCL), which defaulted on a ₹46-crore loan from Bank of India. Accusations included diversion of funds to shell companies. An FIR in 2022 led to the ED filing charges of money laundering under the Prevention of Money Laundering Act (PMLA).
Despite non-cooperation allegations and non-bailable warrants, Balwant Singh was released on bond in August 2024. However, the ED filed for his custodial interrogation in October 2024, citing the need for further investigation. The Special Court granted a four-day remand, which Singh challenged, leading to this High Court judgment.
The High Court identified several procedural lapses in the Special Court's handling of the case:
Lack of Judicial Application of Mind: The remand orders were criticized for their lack of reasoning. “The learned Special Court accepted the ED’s plea for remand in a routine manner, negating the safeguards of Article 21,” Justice Sindhu observed.
Non-Compliance with Section 309 CrPC: The High Court noted that remand under Section 309 requires clear evidence of the accused’s involvement and the likelihood of new evidence emerging through custody, neither of which were established.
Failure to Consider Alternatives: The Court stressed that custodial interrogation was not essential since the ED had already filed its prosecution complaint and collected significant evidence.
Justice Sindhu remarked, “Custodial interrogation is not an automatic entitlement of investigating agencies and must be justified on substantive grounds.”

The High Court quashed the remand and judicial custody orders and directed Singh’s immediate release. However, it emphasized that the bail bonds already furnished by Singh would remain intact to ensure his presence during trial proceedings.
Further, the Court instructed the Registrar (Vigilance) to investigate whether the Special Court had uploaded detailed orders in compliance with judicial standards and to submit a report within two months.
This judgment highlights the judiciary's duty to safeguard individual rights against procedural lapses in the criminal justice system. By setting aside the remand orders, the Punjab and Haryana High Court reasserted the principles of accountability and fairness in handling serious financial fraud cases.

Date of Decision: November 18, 2024.