ED Needn't Give Reasons In Writing To Accused At Time Of Arrest, Can Give Within 24 Hrs; 'Pankaj Bansal' Doesn't Apply Retrospectively: Supreme Court

The Supreme Court on Friday (December 15) held that its judgment in Pankaj Bansal v. Union of India which held that the Directorate of Enforcement (ED) must furnish the grounds of arrest to the accused in writing does not apply retrospectively.

A bench comprising Justices Bela M Trivedi and Satish Chandra Sharma held that non-furnishing of grounds of arrest till the date of pronouncement in Pankaj Bansal (October 3, 2023) cannot be held to be illegal.

Further, the bench made certain observations which have the effect of diluting Pankaj Bansal dictum. It stated that the accused need not be informed of the grounds of the arrest in writing at the time of the arrest and they need to be furnished within 24 hours, but the accused must be orally told about the grounds at the time of arrest.

Grounds of arrest need to be supplied to the accused in writing only within 24 hours

The bench noted that Section 19 of the Prevention of Money Laundering Act states that the accused must be informed of the grounds of arrest as soon as may be.

It held that the expression “as soon as may be” contained in Section 19 of PMLA is required to be construed as- “as early as possible without avoidable delay” or “within reasonably convenient” or “reasonably requisite” period of time.

"Since by way of safeguard a duty is cast upon the concerned officer to forward a copy of the order along with the material in his possession to the Adjudicating Authority immediately after the arrest of the person, and to take the person arrested to the concerned court within 24 hours of the arrest, in our opinion, the reasonably convenient or reasonably requisite time to inform the arrestee about the grounds of his arrest would be twenty-four hours of the arrest," the judgment written by Justice Trivedi stated.

"...in our opinion the person asserted, if he is informed or made aware orally about the grounds of arrest at the time of his arrest and is furnished a written communication about the grounds of arrest as soon as may be i.e as early as possible and within reasonably convenient and requisite time of twenty-four hours of his arrest, that would be sufficient compliance of not only Section 19 of PMLA but also of Article 22(1) of the Constitution of India."

Vijaymadanlal judgment holds the filed; observations by benches of lesser strength not relevant

The bench further stated that the 3-judge bench judgment in Vijay Madanlal Chaudhary v. Union of India has analysed Section 19 and held that it is compliant with the mandate of Article 21 of the Constitution. Since Vijay Madanlal holds the field, observations made by benches on Section 19 of lesser strength cannot be binding.

"...there remains no shadow of doubt that the law laid down by the Three-Judge bench in Vijay Madanlal Choudhary case (supra) that Section 19(1) of the PMLA has a reasonable nexus with the purposes and objects sought to be achieved by the PML Act and that the said provision is also compliant with the mandate of Article 21(1) of the Constitution of India, any observation made or any finding recorded by the Division Bench of lesser number of Judges contrary to the said ratio laid down in Vijay Madanlal Choudhary (supra) would be not in consonance with the jurisprudential wisdom expounded by the Constitution Benches in cases referred above. The three-judge bench in Vijay Madanlal Choudhary case (supra) having already examined in detail the constitutional validity of Section 19 of PMLA on the touchstone of Article 22(1) and upheld the same, it holds the field as on the date."

The division bench in Pankaj Bansal had observed that Vijay Madanlal had not dealt with the aspect of informing the grounds of arrest in writing.

Pankaj Bansal judgment can't be given retrospective effect

The bench refused to accept the argument of Senior Advocate Dr Abhishek Manu Singhvi that Pankaj Bansal is retrospective.

"As discernible from the judgment in Pankaj Bansal Case also noticing the inconsistent practice being followed by the officers arresting the persons under Section 19 of PMLA, directed to furnish the grounds of arrest in writing as a matter of course, “henceforth”, meaning thereby from the date of the pronouncement of the judgment. The very use of the word “henceforth” implied that the said requirement of furnishing grounds of arrest in writing to the arrested person as soon as after his arrest was not the mandatory or obligatory till the date of the said judgment.

 Hence non furnishing of grounds of arrest in writing till the date of pronouncement of judgment in Pankaj Bansal case could neither be held to be illegal nor the action of the concerned officer in not furnishing the same in writing could be faulted with."

It may be noted that High Courts have taken different views on this issue, with the Punjab & Haryana High Court holding Pankaj Bansal to be retrospective and Bombay High Court holding otherwise.

Accordingly, the Court dismissed the appeal filed by Supertech Chairman Ram Kishor Arora challenging the Delhi High Court's order which affirmed his arrest by the Enforcement Directorate in a money laundering case.

Kapoor had filed a writ petition before the High Court contending that he was arbitrarily and illegally arrested on June 27 by ED and was not informed or served the grounds of his arrest. Based on this, Kapoor pleaded that ED had violated his fundamental right under Article 22(1) of the Constitution of India as he was also denied the right to consult and be defended by a legal practitioner of his choice.