Introduction
Recently, the Hon’ble Supreme Court¹ had to once again deal with the procedural aspects of the way the Enforcement Directorate (“ED”) is to arrest an Accused. The Appellant was aggrieved by the order of the Delhi High Court dismissing his petition seeking declaration that his arrest by the Respondent, ED was illegal and violative of the fundamental rights guaranteed to the Appellant under Articles 14, 20 and 21 of the Constitution of India.

The key legal question in this case was whether the Enforcement Directorate's (ED) act of giving a document stating the reasons for arrest to the Appellant, taking it back after getting his signature to confirm he had read it, and not providing a copy of it during the arrest, would make the arrest against the law under Section 19 of the Prevention of Money Laundering Act, 2002 (“PMLA”).

Facts
The Appellant was the founder of M/s Supertech Limited, a real estate company which, along with its group companies had undertaken various projects in Delhi NCR and at other places in Uttar Pradesh during the period 1988-2015. Due to various reasons, 26 FIRs came to be registered against the Appellant in various jurisdictions. On 09.09.2021, the ED registered an ECIR bearing no. ECIR/21/STF/2021 against M/s Supertech Ltd. and others and started investigation under the PMLA. The Appellant was also summoned under Section 50 of PMLA on various dates during which his statements were also recorded.

During March, 2022, insolvency proceedings came to be filed against the company M/s Supertech Ltd. before the NCLT, and during the pendency of the insolvency proceedings, ED passed a provisional attachment order, provisionally attaching certain personal properties of the Appellant and filed an original complaint before the Adjudicating Authority, PMLA, seeking confirmation of the provisional attachment order in terms of Section 8 of PMLA. The Adjudicating Authority, PMLA, issued a notice to the Appellant under Section 8(1) of the PMLA calling upon the Appellant to show cause as to why the properties provisionally attached should not be confirmed as the properties involved in money laundering. According to the Appellant, before he could reply to the said show cause notice, he was arrested by the ED on 27.06.2023 without serving the Appellant, the ground of arrest.

Appellant’s Contentions
The Appellant submitted that merely informing the accused orally about the grounds of arrest and making him read the same and obtaining his signature thereon, and not furnishing in writing the grounds of arrest to the accused has been held to be not in consonance with the provisions contained in Section 19(1) of the PMLA. Due to the inconsistent practice being followed by the officers of the ED, it had been directed in Pankaj Bansal v. Union of India and Others, (2023) SCC Online SC 1244 that it would be necessary henceforth, that a copy of such written grounds of arrest be furnished to the arrested person as a matter of course and without exception. The said direction was the reiteration of the principle or doctrine already existing and also stated in V. Senthil Balaji v. State, (2023) SCC Online SC 934 which was prior to the decision of Pankaj Bansal.

Respondent’s Contentions
The Respondent submitted that the decision in the case of Pankaj Bansal was per incuriam, as the two-Judge Bench in the said case had deviated from the position of law settled by the prior three-Judge Bench judgment in Vijay Madanlal Choudhary and Others v. Union of India and Others(2022) SCC Online SC 929 with respect to the compliance of the provisions of Section 19 of PMLA. It was further submitted that a bench of two judges cannot overlook or ignore a binding precedent of larger or even co-equal bench dealing with the issue, otherwise the two-judge bench decision would fall in the category of per incuriam. According to the Respondent, at the most the direction contained in paragraph 35 of the Pankaj Bansal case to furnish the grounds of arrest in writing, would be applicable "henceforth" as mentioned therein, meaning thereby it would have the prospective and not retrospective effect as sought to be submitted on behalf of the Appellant.

Held

• 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 would be not in consonance with the jurisprudential wisdom expounded by the Constitution Benches. The Three-Judge Bench in Vijay Madanlal Choudhary case 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 expression "as soon as may be" has not been specifically explained in Vijay Madanlal Choudhary. Even the said expression has not been interpreted in either V. Senthil Balaji or in Pankaj Bansal case. In V. Senthil Balaji, it is held inter alia that after forming a reason to believe that the person has been guilty of an offence punishable under the PMLA, the concerned officer is at liberty to arrest him, while performing his mandatory duty of recording the reasons, and that the said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. In Pankaj Bansal case also the court after highlighting the inconsistent practice being followed by the respondent-ED about the mode of informing the person arrested, held 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 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, the Court held that 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.
   
• In Vijay Madanlal Choudhary it has been categorically held that so long as the person has been informed about the grounds of his arrest, that is sufficient compliance of mandate of Article 22(1) of the Constitution. It is also observed that the arrested person before being produced before the Special Court within twenty-four hours or for that purposes of remand on each occasion, the Court is free to look into the relevant records made available by the Authority about the involvement of the arrested person in the offence of money-laundering.
   
• Therefore, the person arrested, 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.
   
• The word “henceforth” in Pankaj Bansal, means 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. The action of informing the person arrested about the grounds of his arrest is a sufficient compliance of Section 19 of PMLA as also Article 22(1) of the Constitution of India.

Conclusion
Since the Appellant was indisputably informed about the grounds of arrest and he having also put his signature and the endorsement on the said document of having been informed, it was held that there was due compliance of the provisions contained in Section 19 of PMLA and his arrest could neither be said to be violative of the said provision nor of Article 22(1) of the Constitution of India. The Appeal was therefore dismissed.

By - Lakshmi Raman