INTRODUCTION
Vide order dated March 20, 2024, the Hon’ble Supreme Court of India rejected a petition[1] preferred by the Union of India, seeking a review of the judgement passed in Pankaj Bansal v Union of India[2](“Pankaj Bansal”), wherein it was held that it was mandatory for the Directorate of Enforcement (“ED”) to provide written ‘reasons for arrest’ to a person arrested under the provisions of the Prevention of Money Laundering Act, 2002 (“PMLA”).
Subsequently, in Ram Kishor Arora v. Directorate of Enforcement (ED) (“Ram Kishor Arora”)[3], the Hon’ble Supreme Court clarified that the ED need not immediately convey the reasons for arrest and that it could communicate the reasons to the arrestee within 24 (Twenty Four) hours of his arrest.
While the judgements are indisputably a step in the right direction, aimed at providing procedural fairness to the accused, certain concerns may still arise.
In the present framework, the ED has up to 24 (Twenty Four) hours after the arrest within which it has to inform the arrestee of the grounds of arrest. The ED may arrest a person late at night, and then present the arrestee before the Special Court for remand, early next morning. In such a scenario, it is entirely possible that the arrested person may be produced before the Special Court to decide the issue of remand, without even being aware of the grounds of his arrest.
Hence, an arrestee may be remanded to the custody of ED, without him or the remanding court being aware of the grounds for arrest, thereby rendering the remand hearing a futile exercise for the arrestee.
Against this backdrop, we explore the key legal propositions laid down in Pankaj Bansal and Ram Kishor Arora and how the law may develop further.
- Reasons for arrest are mandatory: The judgement in Pankaj Bansal: In Pankaj Bansal,the petitioner thereinassailed his arrest by the ED inter alia on the ground that he was not ‘informed’ of the grounds of arrest, as mandated under Section 19(1) of the PMLA. While adjudicating on this aspect, the Hon’ble Supreme Court relied on the statutory provision of Section 19(1) and the judgements in Vijay Madanlal Choudhary v Union of India (“Vijay Madanlal”) [4] and V. Senthil Balaji v. The State represented by Deputy Director (“Senthil Balaji”)[5] to hold that the accused must necessarily be informed of the grounds for arrest. Regarding the manner in which the reasons for arrest are to be communicated, the Hon’ble Supreme Court noted that:
- Section 19 of the PMLA does not provide how the arrested person is to be ‘informed’ about the grounds of arrest.
- Article 22(1) of the Constitution of India, 1950 (“Constitution”), among other things, provides a fundamental right, guaranteeing an arrested person the right to be informed of the grounds of arrest.
- It was also observed that “the mode of conveying information of the grounds of arrest must necessarily be meaningful so as to serve the intended purpose.”
- Thus, it was held that the arrestee must be informed of the grounds for his arrest in writing “as a matter of course and without exception”.
- Judgement in Ram Kishor Arora: While the judgement in Pankaj Bansal holds that it is mandatory for the ED to provide written reasons for arrest, the timeline within which such reasons are to be provided was not clarified. This aspect was considered in Ram Kishor Arora, wherein the ED’s arrest was challenged inter alia on the ground that the arrestee had not been ‘informed’ of the grounds of his arrest at the time of his arrest. In deciding the timeline within which an arrestee must be informed of the reasons for his arrest, the court
- Noted: Section 19(1) of the PMLA provides that the arresting officer must inform the arrestee of the grounds of arrest “as soon as may be”,but this phrase was not interpreted in Vijay Madanlal, Senthil Balaji or Pankaj Bansal.
- Interpreted: “as soon as may be” used in Section 19(1) of the PMLA to mean “as early as possible without avoidable delay” or “within reasonably convenient” or “reasonably requisite” time”
- Held: That arrested person can be informed of the grounds for arrest within 24 (Twenty Four) hours, which is also the period within which the arrested person must be produced before the special court.
It was also held that the requirement of providing written reasons for arrest as propounded in Pankaj Bansal, was prospective from the date of the judgement (October 3, 2023) and not retrospective, in view of the court using the word ‘henceforth’ in its judgment.
ANALYSIS
The proposition of law that emerges from a conjoint reading of Pankaj Bansal and Ram Kishor Arora is that:
- The ED is to mandatorily furnish reasons for arrest in writing and
- The reasons need not be communicated immediately at the time of arrest, but are to be communicated ‘as soon as may be’, i.e. within 24 (Twenty Four) hours of the arrest.
We note that this 24 (Twenty Four) hour period presents a vacuum within which, despite not providing reasons for arrest, the ED may
- Arrest a person,
- Present the person before the Special Court for remand
- Get remand of the arrestee
Having arrested the person and also secured remand, the ED may then provide the reasons for arrest, after securing the remand. Thus, what was aimed to be a procedural safeguard, may not actually accrue to the benefit of the arrested person.
There may be cases that may come to the Hon’ble Supreme Court wherein the accused was not informed of the grounds of his arrest, either at the time of his arrest, or even at the stage of deciding remand. In such situations, the question that may then arise before the Hon’ble Supreme Court is whether the safeguards put in place through the judgements in Pankaj Bansal and Ram Kishor Arora do in fact result in any net favour to the arrestee.
The timely knowledge of the grounds of arrest under PMLA attain an even higher significance, since it is now well settled since Vijay Madanlal, that the arrested person is not entitled to claim a copy of the Enforcement Case Information Report (“ECIR”) as a matter of right.
As the ECIR is rarely, if at all disclosed, it is possible that the arrested person has no knowledge/ understanding whatsoever about the case set up against him, even at the stage of remand hearing, since the hearing may occur well within the 24 (Twenty Four) hour period and the ED may not have disclosed the reasons for arrest at that time. Since the arrested person is neither aware of the contents of the ECIR, nor has he been provided reasons for his arrest by the ED yet, the remand hearing essentially becomes a futile exercise, since the arrested person is not even aware of the case against him to be able to contest/ rebut the same in any manner.
CONCLUSION
As in the case of review in Pankaj Bansal[6], the review petition in Ram Kishor Arora[7] was also dismissed, vide an order dated January 31, 2024. Additionally, review petitions in Vijay Madanlal may next be listed on July 23, July 24 and July 25, 2024, subject to orders of the Hon’ble Chief Justice of India. [8]
Hence, the judgements in Vijay Madanlal, Pankaj Bansal and Ram Kishor Arora are undisturbed and continue to hold the field.
Accordingly, the present position with regard to arrest and timelines for communication of reasons for arrest under the PMLA can be summarised as under:
- To comply with the mandate of Section 19(1) of the PMLA, it is incumbent on the ED to communicate the grounds for arrest in writing. The ED’s failure to do this would invalidate the arrest.
- The arrested person is to be informed of the grounds of arrest, in writing, within 24 (Twenty Four) hours of the arrest. There is no requirement to inform the arrestee accused of the grounds of arrest, immediately, at the time of arrest.
The judgements in Pankaj Bansal and Ram Kishor Arora are a welcome step in delineating necessary procedural safeguards to protect the arrested person. Even so, a situation may arise that the ED may be able to secure remand of the arrestee in its favour, under the current framework, without having disclosed the reasons for arrest even at the time of decision of the issue of remand.
As the law develops, it is possible that the Hon’ble Supreme Court may further clarify that the reasons for arrest must be provided in writing to the arrested person prior to producing him before the court for remand, if not immediately at the time of arrest.
For further information, please contact:
Kapil Arora, Partner, Cyril Amarchand Mangaldas
kapil.arora@cyrilshroff.com
[1] Review Petition (Criminal) Diary No. 50448 of 2023 in Criminal Appeal Nos. 3051-3052 of 2023
[2] Criminal Appeal Nos. 3051-3052 of 2023
[3] 2023 SCC OnLine SC 1682
[4] 2022 SCC Online SC 929
[5] Criminal Appeal Nos. 2284-2285 of 2023
[6] Supra Note 2
[7] Review Petition (Crl.) No. 33 of 2024
[8] Ref: Order dated March 19, 2024 in Criminal Appeal No. 1269 of 2017
