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Furnish written copy of grounds of arrest to accused before detention: SC tells ED

– Anwarulhaq Baig

New Delhi; 5 October 2023: In a landmark ruling, the Supreme Court has directed the Directorate of Enforcement (ED) to furnish a written copy of grounds of arrest to accused at the time of detention.

A bench of Justices AS Bopanna and PV Sanjay Kumar pronounced, “We hold that it will be necessary, henceforth, that a copy of grounds of arrest is furnished to the arrested person as a matter of course and without exception.”

Mere passing of an order of remand would not be sufficient to validate the grounds of arrest, it added.

Citing Article 22(1) of the Constitution, which guarantees the right of arrested persons to be informed of the grounds of their arrest as soon as possible, the apex court noted that the mode of conveying the information should be meaningful in order to serve its intended purpose.

Strongly slamming the ED for not providing the grounds for arrest in writing to accused Pankaj Bansal and Basant Bansal, the Bench declared their arrests illegal and ordered their immediate release in a money laundering case against the Gurugram-based real estate firm M3M.

Coming down heavily against the investigation agency’s approach in the case, the Bench pointed out, “This chronology of events speaks volumes and reflects rather poorly, if not negatively, on the ED’s style of functioning.”

The Bansal brothers were arrested on June 14 in connection with an FIR registered against former Special judge Sudhir Parmar, according to media reports. The ED claimed that it has information about Parmar favouring the Bansal brothers in the case that is related to another real estate firm called IREO. The brothers challenged their arrest under Section 19 of PMLA.

While writing the verdict, Justice Kumar observed, “ED, mantled with far-reaching powers under the stringent (PMLA) Act of 2002, is not expected to be vindictive in its conduct and must be seen to be acting with utmost probity and with the highest degree of dispassion and fairness. In the case on hand, the facts demonstrate that the ED failed to discharge its functions and exercise its powers as per these parameters.”

Criticizing the ED, the top court asserted that the premier investigating agency tasked with curbing the money laundering, was expected to act in a transparent and fair manner, conforming to the pristine standards of fair play in action.

The SC Bench also held that the mere failure of an accused to respond to questions from the ED is not sufficient grounds for arrest under Section 19 of the Prevention of Money Laundering Act (PMLA). To arrest someone, the investigation agency must have specifically found reason to believe that the person is guilty of money laundering offences.

The court also clarified that the agency cannot expect a person summoned for interrogation to admit guilt, and cannot assert that anything short of such an admission would be an “evasive reply”.

However, the bench clarified that if any sensitive material is mentioned in the grounds of arrest recorded by the authorized officer, they can redact those portions in the document and furnish the edited copy to the arrested person to protect the sanctity of the investigation.

Experts and analysts say this judgement is a significant step towards protecting the rights of accused and preventing the federal investigation agency from misusing its extraordinary powers.


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