Introduction

• The case concerns the validity of the arrest of Pankaj Bansal under Section 19(1) of the Prevention of Money Laundering Act (PMLA), 2002.

• Bansal challenged the failure of the Enforcement Directorate (ED) to provide written grounds for his arrest, arguing that this violated the constitutional right under Article 22(1) to be informed of the reasons for detention.

Facts of the Case

• Pankaj Bansal was arrested under Section 19(1) of the PMLA by the ED for suspected money laundering offenses.

• The ED did not provide written grounds for the arrest, as required by the PMLA and Article 22(1) of the Constitution.

• Bansal argued that the lack of written grounds hindered his ability to challenge the arrest and seek bail under Section 45 of the PMLA.

Issues

1. Does Section 19(1) of the PMLA require the Enforcement Directorate to record the reasons for an arrest in writing?

2. What constitutes a meaningful communication of the grounds for arrest under Article 22(1) of the Constitution?

Observations

The Court highlighted that while Section 19 of the PMLA requires the accused to be informed of the grounds for arrest, it does not specify the mode of communication. The judgment referenced previous cases but noted that, the lacunae formed around this vagueness regarding the procedure has been exploited by the ED to circumvent established constitutional norms by merely providing the grounds of arrest to the accused verbally. This is visible through the arguments of the ED in Ram Kishor Arora v. Directorate of Enforcement and Anr., wherein it submitted that the Senthil Balaji case merely required the information to be served, which could have been done orally. The bench emphasized that Article 22(1) guarantees the fundamental right to be informed of the grounds for arrest, which should be done in a meaningful manner to ensure the arrested individual understands the basis of their detention.

The Court pointed out that for the accused to seek bail under Section 45 of the PMLA, they must know the grounds on which the arrest was made. Without this information, the ability to challenge the validity of the arrest or assert a defense would be significantly hampered. The bench concluded that effective communication of the grounds for arrest is critical not only for legal compliance but also for upholding the rights of the accused.

Implication

1. The Court set aside the arrests of Pankaj Bansal and Basant Bansal in the money laundering case. The Court further ruled that the illegal arrest would render the subsequent remand invalid.

2. The Enforcement Directorate (ED) is mandated to provide written grounds for arrest as per Section 19(1) of the PMLA, 2002.

3. The ED must comply with Article 22(1) of the Constitution, which guarantees the right to be informed of the reasons for arrest.

4. The mode of conveying the grounds for arrest must be meaningful and comprehensible to serve its intended purpose.

5. Effective communication of the grounds for arrest is essential for the accused to adequately defend themselves and seek bail under Section 45 of the PMLA.

6. The Court reiterated that the rights of the accused must be upheld to ensure fair legal processes and access to justice.

Given the stringent bail provision in Section 45 of the Prevention of Money Laundering Act (PMLA), which requires an accused to establish a lack of guilt, furnishing written grounds of arrest becomes pivotal for the accused to pursue legal remedies effectively. “It is only if the arrested person has knowledge of these facts that he/she would be in a position to plead and prove before the Special Court that there are grounds to believe that he/she is not guilty of such offence, so as to avail the relief of bail. Therefore, communication of the grounds of arrest, as mandated by Article 22(1) of the Constitution and Section 19 of the Act of 2002, is meant to serve this higher purpose and must be given due importance,” the judgment held. This ruling emphasizes that the right to be informed of the grounds for arrest is not merely procedural but is essential for safeguarding the legal rights of the accused, ensuring that they are able to effectively challenge the legality of their detention and seek appropriate legal relief.