Informing The Accused About Grounds of Arrest Under PMLA- Mandatory or Directory?



The Prevention of Money Laundering Act 2002 (PMLA) is a special law enacted by the Parliament to prevent money laundering, and to provide for the confiscation of property derived from or involved in money laundering. Under Section 19 of the PMLA, it is enumerated that the Enforcement Directorate while effecting the arrest of an individual must ‘inform’ such individual of the grounds of arrest. This is a mandatory requirement to be complied with given by the ED, while effecting the arrest of an individual, and the failure of which will render the arrest illegal and arbitrary.

In the recent judgement of Pankaj Bansal v. Union of India, the crux of issue posed before the Supreme Court was the interpretation of the term ‘inform.’ In the present article, we do an analysis of the position of law prior to the aforesaid judgement of the Supreme Court, the reasoning behind the decision and prospective impact of the judgement is delved into.

Prior- Position of Law

The position of law, which was followed prior to the decision of Pankaj Bansal (supra) and as was upheld by the Delhi High Court in Moin Akthar Qureshi v. Union of India & Ors. was that the requirement as enshrined under Section 19 of the PMLA, is that the grounds of arrest must only be informed and the same does not require to be communicated to the arrestee, and therefore the obligation cast upon the officer of the ED while effecting the arrest is only to orally inform such grounds of arrest on the arrestee and does not require the grounds of arrest to be physically served upon the arrestee. Further the Bombay High Court in Chhagan Chandrakant Bhujbal v. Union of India & Ors. confirming with the decision in Moin Qureshi case held that the requirement under Section 19 of PMLA, is only that the grounds of arrest must be conveyed to the arrestee at the earliest, and there is no need for the same to be communicated to the arrestee in writing.

Supreme Court’s Decision in Pankaj Bansal

While deliberating the interpretation of term ‘inform’ grounds of arrest, the Apex Court emphasized upon the importance of communication of grounds of arrest as the same is a Fundamental Right which is guaranteed to arrested persons under Article 22(1) of the Constitution and stated that communication of grounds of arrest in writing is of utmost importance for the following reasons-

(1) if the grounds of arrest are only orally read out or perused by the arrestee, the compliance of the requirement mandated under section 19 of PMLA, that the grounds of arrest have been informed to the arrestee will boil down to the words of the arrested person against that of the officer of ED; and

(2) The principles of criminal and constitutional jurisprudence state and provide that the grounds of arrest is to convey the reasons of arrest to the arrestee and to enable the arrestee to secure adequate legal representation.

Notably, the Supreme Court opined that ED has not followed a uniform and consistent practice, as the grounds of arrest has been furnished in writing to arrested persons in certain parts of the country, but in other parts of the country that practice is not followed and the grounds of arrest are either read out to the arrested person or allowed to be read by them.

Hence, in order to give full regard and due consideration to the statutory and constitutional principles as enshrined under Section 19 PMLA and Article 22(1) of the Constitution, the  Supreme Court held that it is necessary, henceforth, that a copy of written grounds of arrest is to be furnished in writing to the arrestee as a matter of course and exception. In this regard, the Supreme Court also held that the position of law as laid down by the High Courts of Bombay & Delhi in the respective cases of Moin Qureshi and Chhagan Bhujbal are incorrect and do not lay down the correct law.

Effect of the Decision of Pankaj Bansal

The decision in Pankaj Bansal case has been widely hailed as a landmark judgement, which has curtailed the unbridled powers granted to the ED among the growing concerns of the political weaponization of ED. In this regard, it is pertinent to note that during the hearing of the case of Prabir Purkayastha v. State (NCT of Delhi), the Solicitor General of India, orally remarked that the Central Government is filing a review petition against the decision in the Pankaj Bansal case.

It is also pertinent to note that while the judgement of Pankaj Bansal has brought relief to the arrested persons, the use of the term ‘henceforth’ by the Hon’ble Supreme Court in the judgment has led to a differing view as to whether the said judgement would apply prospectively or retrospectively.

Contributor: Parikshith K.


Interns and Paralegals.


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