Supreme Court: While hearing a criminal appeal against the Delhi High Court’s decision whereby the accused person’s petition seeking declaration of his arrest by Directorate of Enforcement (‘ED’) as illegal and violative of the fundamental rights and to release him, the Division Bench of Bela M. Trivedi and Satish Chandra Sharma, JJ. held that the action of informing the person arrested about the grounds of his arrest is a sufficient compliance of Section 19 of PMLA as also Article 22(1) of the Constitution of India, as held in Vijay Madanlal Choudhary and Others vs. Union of India (2022) SCC Online SC 929 and it holds the field.
The Bench also answered an issue of seminal importance in negative that whether the ED’s action of not furnishing a copy of the document containing the grounds of the arrest after the arrestee having endorsed and read the same, at the time of arrest would render the arrest illegal under Section 19 of the Prevention of Money Laundering Act, 2002 (‘PMLA’)?
Background
26 First Information Reports (‘FIR’) were registered against the accused, founder of Supertech Limited. A case was also registered by the ED and summons were served under Section 50 of PMLA on various dates during which his statements were also recorded. On 12-05-2023, the Adjudicating Authority, PMLA, issued a notice to the appellant under Section 8(1) of the PMLA calling upon the accused to show cause as to why the properties provisionally attached should not be confirmed as the properties involved in money laundering, however, before he could file a reply to the show cause notice, the accused was arrested on 27-06-2023 without serving any grounds of arrest. The Special Court remanded the accused to the ED custody till 10-07-2023 and thereafter he was sent to judicial custody for 14 days till 24-07-2023. The accused filed a petition before the High Court which came to be dismissed vide the impugned order.
Analysis
The Court noted that the validity of Section 19 of the PMLA was examined in Vijay Madanlal Choudhary case (supra), whereby while upholding the validity of Section 19 of the PMLA held that the said provision has a reasonable nexus with the purposes and objects sought to be achieved by the PMLA. Regarding the seminal issue at hand, as to whether it was necessary to furnish a copy of the Enforcement Case Information Report (ECIR) to the person concerned apprehending the arrest or at least after his arrest, the Bench in Vijay Madanlal (supra), held that “so long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution. The supply of ECIR in every case to the person concerned is not mandatory. In some cases, the ED has furnished a copy of ECIR to the person before filing of the complaint, that does not mean that in every case the same procedure must be followed. It is enough, if ED at the time of arrest, contemporaneously discloses the grounds of such arrest to such person. Suffice it to observe that an ECIR cannot be equated with an FIR which is mandatorily required to be recorded and supplied to the accused as per the provisions of CrPC. The person arrested in terms of Section 19 of the PMLA, is contemporaneously made aware of the grounds of his arrest and this is compliant with the mandate of Article 22(1) of the Constitution.”
On referring to Pankaj Bansal v. Union of India, 2023 SCC OnLine SC 1244, the Court noted that it was held that it would be necessary that a copy of such written grounds of arrest is furnished to the arrested person as a matter of course and without exception.
On the question of doctrine of binding precedent, the Court referred to Union of India v. Raghubir Singh, (1989) 2 SCC 754, wherein it was held that in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the Rule has been evolved, in order to promote consistency and certainty in the development of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. Therefore, placing its reliance on the authorities discussing the doctrine of binding precedent, the Court opined that the law laid down by the Three-Judge bench in Vijay Madanlal Choudhary case (supra), that Section 19(1) of the PMLA has a reasonable nexus with the purposes and objects sought to be achieved by the PML Act and that the said provision is also compliant with the mandate of Article 21(1) of the Constitution of India, any observation made or any finding recorded by the Division Bench of lesser number of Judges contrary to the said ratio laid down in Vijay Madanlal Choudhary (supra) would not be in consonance with the jurisprudential wisdom expounded by the Constitution Benches on the subject of binding precedents. Thus, the Court held that the Vijay Madanlal Choudhary (supra), holds the field.
Further, the Court noted that the expression “as soon as may be” has not been specifically explained in Vijay Madanlal Choudhary (supra), however, the Court noted that the said expression was interpreted in Abdul Jabar Butt and Another vs. State of Jammu & Kashmir. Therefore, the Court said that it can be construed as- “as early as possible without avoidable delay” or “within reasonably convenient” or “reasonably requisite” period of time. The Court explained that since by way of safeguard, a duty is cast upon the officer concerned to forward a copy of the order along with the material in his possession to the Adjudicating Authority immediately after the arrest of the person, and to take the person arrested to the concerned court within 24 hours of the arrest. Thus, the Court opined that the reasonably convenient or reasonably requisite time to inform the arrestee about the grounds of his arrest would be twenty-four hours of the arrest.
Hence, placing its reliance on Vijay Madanlal Choudhary (supra), the Court held that if the arrested person is informed or made aware orally about the grounds of arrest at the time of his arrest and is furnished a written communication about the grounds of arrest as soon as may be i.e, as early as possible and within reasonably convenient and requisite time of twenty-four hours of his arrest, that would be sufficient compliance of not only Section 19 of PMLA but also of Article 22(1) of the Constitution.
The Court found that in Pankaj Bansal (supra), it was held that the grounds of arrest shall be furnished in writing as a matter of course, henceforth. The Court explained that the very use of the word “henceforth” implied that the said requirement of furnishing grounds of arrest in writing to the arrested person as soon as after his arrest was not mandatory or obligatory till the date of the said judgment, but from the date of the pronouncement of the judgment. Thus, the Court held that non furnishing of grounds of arrest in writing till the date of pronouncement of judgment in Pankaj Bansal case could neither be held to be illegal, nor the action of the officer concerned in not furnishing the same in writing could be faulted with. As such, the action of informing the person arrested about the grounds of his arrest is a sufficient compliance of Section 19 of PMLA as also Article 22(1) of the Constitution of India, as held in Vijay Madanlal (supra).
In the present case, the Court noted that the document containing grounds of arrest was handed to the arrestee when he was arrested, and he also put his signature below the said grounds of arrest, after making an endorsement that “I have been informed and have also read the above-mentioned grounds of arrest.” Thus, the Court held that since the accused was indisputably informed about the grounds of arrest and he having also put his signature and the endorsement on the said document of having been informed, there was due compliance of the provisions contained in Section 19 of PMLA and his arrest could neither be said to be violative of the said provision nor of Article 22(1) of the Constitution.
[Ram Kishor Arora v. Directorate of Enforcement (ED), 2023 SCC OnLine SC 1682, Decided on 15-12-2023]
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