2023 Supreme(SC) 1000

SUPREME COURT OF INDIA
A.S. BOPANNA, SANJAY KUMAR, JJ.
Pankaj Bansal – Appellant
Versus
Union of India and Others – Respondents
Criminal Appeal Nos. 3051-3052, 3053-3054 of 2023, Special Leave Petition (Crl.) Nos. 9220-9221, 9275-9276 of 2023
Decided On : 03-10-2023

IMPORTANT POINTS
(1) Arrest of suspect by ED – Mere passing of an order of remand would not be sufficient in itself to validate appellants’ arrests, if such arrests are not in conformity with requirements of Section 19 of PML Act, 2002.
(2) Section 167 of Cr.P.C. would necessarily have to be complied with once an arrest is made under Section 19 of Act of 2002.

Headnote:

(A) Prevention of Money Laundering Act, 2002 – Section 19 – Criminal Procedure Code, 1973 – Section 167 – Validity of arrest – Mere passing of an order of remand would not be sufficient in itself to validate appellants’ arrests, if such arrests are not in conformity with requirements of Section 19 of Act of 2002 – Section 19 of Act of 2002, supplemented by Section 167 Cr.P.C., provided adequate safeguards to an arrested person as Magistrate has a distinct role to play when a remand is made of an accused person to an authority under Act of 2002 – Magistrate is under a bounden duty to see to it that Section 19 of Act of 2002 is duly complied with and any failure would entitle arrestee to get released – Magistrate is appropriate authority who has to be satisfied about compliance with safeguards as mandated under Section 19 of Act of 2002 – Section 167 of Cr.P.C. would necessarily have to be complied with once an arrest is made under Section 19 of Act of 2002 – In the event Court fails to discharge this duty in right earnest and with proper perspective, order of remand would have to fail on that ground and same cannot validate an unlawful arrest made under Section 19 of Act of 2002. (Paras 13, 15 and 16)

(B) Prevention of Money Laundering Act, 2002 – Section 19 – Arrest of suspect by ED – Being a premier investigating agency, charged with onerous responsibility of curbing debilitating economic offence of money laundering in our country, every action of ED in course of such exercise is expected to be transparent, above board and conforming to pristine standards of fair play in action – ED, mantled with far-reaching powers under stringent Act of 2002, is not expected to be vindictive in its conduct and must be seen to be acting with utmost probity and with highest degree of dispassion and fairness – Failure of appellants to respond to questions put to them by ED would not be sufficient in itself for Investigating Officer to opine that they were liable to be arrested under Section 19 – Mere non-cooperation of a witness in response to summons issued under Section 50 of Act of 2002 would not be enough to render him/her liable to be arrested under Section 19 – It is not open to ED to expect admission of guilt from person summoned for interrogation and assert that anything short of such admission would be an ‘evasive reply’ – In case on hand, facts demonstrate that ED failed to discharge its functions and exercise its powers as per these parameters – Authorities must act within four corners of statute – Impugned arrest orders and arrest memos along with orders of remand set aside. (Paras 21, 24, 25 and 36)

(C) Prevention of Money Laundering Act, 2002 – Sections 45 and 19 – Constitution of India – Article 22(1) – Arrest of suspect by ED – No person who is arrested shall be detained in custody without being informed, as soon as may be, of grounds for such arrest – This being fundamental right guaranteed to arrested person, mode of conveying information of grounds of arrest must necessarily be meaningful so as to serve intended purpose – Though it is not necessary for arrested person to be supplied with all material that is forwarded to Adjudicating Authority under Section 19(2), he/she has a constitutional and statutory right to be ‘informed’ of grounds of arrest which are compulsorily recorded in writing by authorized officer. (Paras 29 and 30)

(D) Prevention of Money Laundering (The Forms and the Manner of Forwarding a Copy of Order of Arrest of a Person along with the Material to the Adjudicating Authority and its Period of Retention) Rules, 2005 – Rule 6 – Prevention of Money Laundering Act, 2002 – Section 19(1) – Arrest of suspect by ED – There is no valid reason as to why a copy of such written grounds of arrest should not be furnished to arrested person as a matter of course and without exception – In case on hand, admitted position is that ED’s Investigating Officer merely read out or permitted reading of grounds of arrest of appellants and left it at that, which is also disputed by appellants – As this form of communication is not found to be adequate to fulfil compliance with mandate of Article 22(1) of Constitution and Section 19(1) of Act of 2002, arrest of appellant was not in keeping with provisions of Section 19(1) of Act of 2002. (Paras 32 and 35)

Facts of the case:

Challenge in these appeals is to the orders dated 20.07.2023 and 26.07.2023 passed by a Division Bench of the Punjab & Haryana High Court dismissing CWP No. 14536 of 2023 filed by Pankaj Bansal and CWP No. 14539 of 2023 filed by his father, Basant Bansal. By the order dated 20.07.2023, Division Bench opined that, as the constitutional validity of Section 19 of the Prevention of Money Laundering Act, 2002, had been upheld by Supreme Court, challenge to same by the writ petitioners could not be considered only because of the fact that a review petition was pending before Supreme Court. Prayer of writ petitioners to that effect was accordingly rejected.

Only issue for consideration presently is whether arrest of the appellants under Section 19 of Act of 2002 was valid and lawful and whether the impugned orders of remand passed by Vacation Judge/Additional Sessions Judge, Panchkula, measure up.

Findings of Court:

Appeals are accordingly allowed, setting aside impugned orders passed by Division Bench of the Punjab & Haryana High Court as well as the impugned arrest orders and arrest memos along with the orders of remand passed by the learned Vacation Judge/Additional Sessions Judge, Panchkula, and all orders consequential thereto. Appellants shall be released forthwith unless their incarceration is validly required in connection with any other case.

Result : Appeals allowed.