In recent rulings, the Supreme Court and the High Courts have criticised the Enforcement Directorate (ED) for its cavalier approach to the rule of law while making arrests under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA). The courts lambasted the ED for its high-handedness, asserting that the power to arrest under Section 19 of the Prevention of Money Laundering Act is not a wild card to be played at whims and fancies. The courts underscored that due process is not a mere procedural formality but the bedrock of justice. The stern admonitions serve as a clarion call for these agencies, reminding them that the scales of justice cannot be tipped by arbitrary arrests and individuals have the sacrosanct right to fair treatment under the law.
Powers of Arrest under PMLA
Section 19 of the PMLA empowers the Director, Deputy Director, Assistant Director, or any other officer authorised by the Central Government to arrest any person believed guilty of an offence under this Act. However, this power is not absolute or “untrammelled”. There are certain conditions that must be met before an arrest can be made: 1) Based on material in their possession, the officer must have a reason to believe that the accused is guilty of an offence. This reason must be recorded in writing. 2) The person being arrested must be informed of the grounds for their arrest promptly, and 3) A copy of the arrest order, along with the material in possession, must be forwarded to the adjudicating authority in a sealed envelope.
Informing the Grounds of Arrest and Supplying the Copy of the ECIR
Article 21 of the Indian Constitution stipulates that no person shall be deprived of his life or personal liberty except according to procedure established by law. Article 22(1) stipulates that no person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest, nor shall he be denied the right to consult and to be defended by a legal practitioner of his choice. Section 50(1) of the Criminal Procedure Code says that every police officer arresting a person without a warrant shall forthwith communicate to him full particulars of the offence for which he is arrested.
In the case of Vijay Madanlal Chaudhary v. Union of India (2022 SCC Online SC 920), the Supreme Court ruled that under Section 19(1) of the PMLA, 2002, a person must be informed of the grounds for their arrest as soon as possible, in line with Article 22(1) of the Constitution. The Enforcement Case Information Report (ECIR), an internal document of the ED, contains details that, if revealed prematurely, could impact the outcome of the investigation. Therefore, it’s not equivalent to an FIR, and its non-disclosure doesn’t frustrate the purpose of the PMLA. The SC also held that not supplying a copy of the ECIR is not a violation of constitutional rights in as much as informing grounds of arrest is sufficient compliance with the mandate of Article 22(1) of the Constitution.
However, there was a conundrum as to whether the grounds of arrest should be merely informed or communicated to the person arrested. The Delhi High Court, in Moin Akhtar Qureshi v. UOI [2017 SCC Online Del 12108], while rejecting a Petition challenging the detention on non-information of grounds of arrest, observed that Section 19 of the PMLA also uses the expression “informed of the grounds of such arrest” as used in Article 22(1) and does not use the expression “communicate the grounds of such arrest” and the Legislature has consciously used the expression “informed”, which is also used in Article 22(1). The High Court observed that the obligation cast on the ED under section 19(1) is to inform the arrestee “as soon as may be” of the grounds of such arrest as Section 19(1) does not oblige the ED to inform/serve the order of arrest, or the grounds for such arrest to the arrestee simultaneously with his arrest.
Due to this interpretation of Section 19(1) of the PMLA, the ED frequently arrested accused without providing written grounds for the arrest. It often asserted that officers had orally read out the grounds of arrest to the arrested person, a claim that the arrested person regularly contested. This led to disputes over proper compliance, with the situation often becoming a matter of one person’s word against another—the arrested individual versus the ED officer.
Grounds of Arrest are to be communicated in writing
The Supreme Court in Pankaj Bansal v. Union Of India frowned upon this practice of the ED and observed that Article 22(1) of the Constitution provides, inter alia, that arrestee shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest. Being the fundamental right guaranteed to the arrested person, the mode of conveying information of the grounds of arrest must necessarily be meaningful so as to serve the intended purpose. The SC held that a dispute with regards to informing the grounds of arrest could be easily avoided and its consequences can be obviated very simply by furnishing the written grounds of arrest, as recorded by the authorised officer to the arrested person under due acknowledgement, instead of leaving it to the debatable ipse dixit.
The observations made by the apex court, while holding the necessity of furnishing the grounds of arrest in writing are pertinent. It observed that in case of oral reading out voluminous grounds of arrest, it would be well-nigh impossible for the arrested person to record and remember all that they had read or heard being read out for future recall so as to avail legal remedies. More so, a person who has just been arrested would not be in a calm and collected frame of mind and may be utterly incapable of remembering the contents read by or read out to them. The very purpose of this constitutional and statutory protection would be rendered nugatory by permitting the authorities concerned to merely read out or permit reading of the grounds of arrest, irrespective of their length and detail, and claim due compliance with the constitutional requirement under Article 22(1) and the statutory mandate under Section 19(1) of the Act of 2002. The judgment of the Delhi HC in Moin Akhtar Qureshi v. UOI was also considered as bad law.
In summary, while authorities under PMLA do have the power to arrest, this power is not unrestricted. It is bound by certain conditions and procedures to ensure it’s not misused. Communicating grounds for arrest in writing aligns with the principle of the rule of law and constitutional requirements, which ensures a balance between state power and individual rights.
Akhilesh Dubey is an Advocate and Solicitor at the Supreme Court of England and Wales.