Arrests under the Prevention of Money Laundering Act cannot be made arbitrarily and on “the whims and fancies of the authorities,” the Supreme Court observed on Friday while granting interim bail to Delhi Chief Minister Arvind Kejriwal.

A bench of Justices Sanjiv Khanna and Dipankar Datta granted Kejriwal interim bail in the case filed against him by the Enforcement Directorate in the alleged Delhi liquor scam. The Aam Aadmi Party chief will, however, remain in jail as he was arrested by the Central Bureau of Investigation in the same case on June 25.

The court on Friday referred Kejriwal’s petition questioning his arrest by the Enforcement Directorate to a larger bench.

The Supreme Court said in its judgement on Friday that investigating officers cannot be allowed to “selectively pick and choose” material implicating the person to be arrested. “They have to equally apply their mind to other material which absolves and exculpates the arrestee,” it said.

The court acknowledged that the opinion of an officer on whether to make an arrest is a subjective one. It, however, underlined that this opinion must be formed in accordance with the law. “Subjectivity of the opinion is not a carte blanche to ignore relevant absolving material without an explanation,” the bench said.

Section 19(1) of the Prevention of Money Laundering Act says that Enforcement Directorate officers may arrest individuals if they have reason to believe that they are guilty of an offence under the Act.

The court, however, noted on Friday that the power to make arrests under this provision “is not for the purpose of investigation”. It added: “Arrest can and should wait, and the power in terms of Section 19(1) of the PML Act can be exercised only when the material with the designated officer enables them to form an opinion, by recording reasons in writing that the arrestee is guilty.”

The Enforcement Directorate argued before the court that the order to arrest a person under Section 19(1) of the Prevention of Money Laundering Act is a decision taken by a high-ranking official. The agency had made the same contention in an earlier case in which the validity of the Act was questioned, and the court had accepted the argument in its 2022 judgement.

However, the Supreme Court on Friday said it is expected that the high-ranking official should be conscious of the obligation imposed by the Prevention of Money Laundering Act. “We are of the opinion that it would be incongruous to argue that the high-ranking officer should not objectively consider all material, including exculpatory material,” the bench said.