In a recent judgement of Pankaj Bansal v. Union of India, the Supreme Court has held that the arrest made by the ED is illegal if the grounds of arrest are not furnished in writing. While holding that the lack of written grounds of arrest results in violation of the protection granted under Article 22(1) of the Constitution of India and Section 19 of PMLA, the Supreme Court noted as follows:
“… to give true meaning and purpose to the constitutional and the statutory mandate of Section 19(1) of the Prevention of Money Laundering Act of 2002 of informing the arrested persons of the grounds of arrest we hold that it would be necessary, henceforth, that a copy of such written grounds of arrest is furnished to the arrested person as a matter of course and without exception”.
The case relates to arrests of Pankaj Bansal and Basant Bansal by the ED pursuant to Enforcement Case Information Report (ECIR) registered by it on basis of a First Information Report (FIR) registered by the Anti-Corruption Bureau, Panchkula, Haryana (ACB, Panchkula). ACB Panchkula had registered an FIR on 17.04.2023 for the offence of corruption and bribery along with criminal conspiracy against certain individuals. Basis this FIR, the ED registered an ECIR on 13.06.2023. However, the names of Pankaj Bansal and Basant Bansal were not expressly mentioned in this FIR or the ECIR. While Pankaj Bansal and Basant Bansal were present in the ED office on 14.06.2023 in compliance of summons issued in respect of a previous ECIR, they were issued summons in respect of the second ECIR (registered on 13.06.2023) to be present on 14.06.2023 and arrested on the same day. Pankaj Bansal was arrested on the ground that he did not divulge relevant information while Basant Bansal was arrested because he refused to receive the summon.
While the grounds of arrest were read over to or read by the arrested persons and the same was signed by independent witnesses, the Supreme Court held that such oral communication of the grounds of arrest is not sufficient compliance.
The requirement of informing the arrested person of the grounds for arrest is rooted in Article 22(1) of the Constitution of India which confers the right to be informed, as soon as possible, of the grounds for arrest and the right to legal representation. In the absence of express provision regarding the manner of informing grounds of arrest, the ED did not follow a consistent approach of informing grounds of arrest. In certain cases, it provided grounds of arrest in writing while in other cases, the grounds of arrest were orally communicated.Whether oral communication of grounds of arrest is sufficient compliance or not has been a subject matter of litigation for several years before various high courts and there have been divergent views. In some cases, the high court took a view that a defect (if any) in arrest by not providing grounds of arrest in writing is cured by the remand order passed by the magistrate/sessions court as the subsequent custody/detention is by virtue of such order. In other cases, a contrary view was taken. However, the issue appears to have been settled to some extent with this judgement of the Supreme Court.The entire issue around providing grounds of arrest in writing is significant because the ED is not required to provide a copy of the ECIR which is the equivalent of the FIR containing preliminary details of the case. If the arrested person wants to challenge the arrest or apply for bail, the knowledge of the grounds of arrest attains significance. One of the conditions to be satisfied for the grant of bail under PMLA is that the accused is not involved in an offence of money laundering.
In certain cases when the application for remand of the accused is filed before the magistrate within 24 hours of arrest, the accused may be provided a copy of the remand application which generally contains details of the case made out against the accused. However, where the remand application is not provided, it becomes difficult for the accused. While he may have been given an opportunity to read the grounds of arrest, it would not be reasonably expected for him to understand the legal jargon that has been used and he may not be able to remember everything, especially where the grounds of arrest run into several pages.
In the case of Pankaj Bansal, the Supreme Court has clearly stated that to apply for bail, the arrested person/ accused needs to be made aware of the grounds of arrest in writing. Based on this information the arrestee would be able to seek legal representation and present a case when seeking bail.
The Supreme Court also held that the order of remand was also not valid as it was passed in a mechanical manner and without examining whether the ED had reasons to believe and whether the grounds of arrest were provided or not. Therefore, the arrested persons were entitled to be released as the detention was illegal.
In the authors view, considering that the arrest itself was not in compliance with the constitutional and statutory mandate, the order of remand (whether reasoned or not) may not be able to cure the defective arrest.
While the ED has decided to file a review petition against the judgment of the Supreme Court, the applicability of this judgment to other laws having similar provisions and the validity of the arrests made prior to the date of this judgment are already a subject matter of dispute before different courts across the country. It will be interesting to see if this judgment springs up another round of litigation.
(This article has been authored by S. Vasudevan – Executive Partner, Mahendra Singh – Principal Associate, Medha Roy – Associate at Lakshmikumaran and Sridharan Attorneys, New Delhi.)
