Chhattisgarh HC dismisses Chaitanya Baghel's Plea against ED Arrest in Money Laundering Case [Read Order]

The Chhattisgarh High Court has dismissed the petition filed by Chaitanya Baghel, son of former Chhattisgarh Chief Minister Bhupesh Baghel, challenging his arrest by the Enforcement Directorate (ED) in a money laundering case related to the Liquor Scam.

Chaitanya Baghel, the petitioner was apprehended on 18.07.2025 by the respondent/ED purportedly in connection with an investigation under the Prevention of Money Laundering Act, 2002 (PMLA) allegedly linked to the Liquor Scam. The investigation by the ED originated on the basis of various complaints and reports, inter alia, from the Income Tax Department, Anti Corruption Bureau (ACB) and Economic Offences Wing (EOW), between 2022 and 2024, relating to alleged illicit financial transactions and proceeds of crime purportedly involving the petitioner.

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Despite the existence of these complaints and investigation spanning over three years, it is categorically submitted that the petitioner was never issued any summons under Section 50 of the PMLA at any stage for recoding statements or cooperating in the investigation. The petitioner remained entirely unaware of any proceedings initiated against him directly by the ED during the entire period.

A detailed search was conducted by the ED under Section 17 of the PMLA on 10.03.2025 at the residence and other premises of the petitioner. After the search, based on the material collected, the ED recorded a reason to believe that the petitioner was guilty of offences under the PMLA, implicating him in money laundering activities. This finding was communicated via Original Application before the Adjudicating Authority.

Counsel for the petitioner argued that the arrest was illegal as there was no "need and necessity" to arrest, no summons were issued under Section 50 of PMLA despite a three-year investigation, all materials were already secured by November 2022, there was an inordinate delay of four months between the search and arrest, allegations of non-cooperation were unfounded, and the grounds of arrest were mechanical and templated. The petitioner also contended that the ED had conducted further investigation without prior permission from the competent court.

Per contra, the ED's counsel argued that the scope of judicial review is limited to examining legality and procedural propriety, not re-evaluating evidentiary material. They maintained that all statutory requirements under Section 19 of PMLA were complied with, including recording "reasons to believe" and furnishing written grounds of arrest. The ED emphasized that the power to arrest is discretionary and that courts cannot substitute their opinion for that of the authorized officer.

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A single bench of Justice Arvind Kumar Verma, after considering the arguments, observed that while there were procedural lapses (irregularities), they did not amount to illegality. The court distinguished between irregularities and illegalities, noting that the grounds raised by the petitioner were more appropriate for a bail application rather than a writ petition.

The court found that the ED had complied with the mandatory requirements of Section 19 of PMLA and that the arrest was based on material in possession of the authorized officer.

The Court dismissed the petition, holding that the grounds raised were procedural lapses/irregularities not amounting to illegality. However, the Court granted liberty to the petitioner to file an appropriate application for bail before the trial court and raise the grounds mentioned in this petition.

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