This Article pertaining to “GROUNDS OF ARREST” – THE SHAKING GROUND FOR INVESTIGATORS is Authored by A. Rangadham, Superintendent (AR), Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad.
In Vijay Madanlal Choudhary & Ors. Versus Union of India & Ors. [2022 (7) TMI 1316 – SUPREME COURT] on the aspect of arrest, the Apex Court held that Section 19(1) of PMLA Act, 2002 envisages that the Director, Deputy Director, Assistant Director, or an authorised officer, if he has material in his possession giving rise to reason to believe that any person has been guilty of an offence punishable under the 2002 Act, he may arrest such person. The arresting officer must record the reasons in writing for the belief regarding the involvement of person in the offence of money-laundering and the grounds for such arrest must be informed to that person. It is also the obligation of the authorised officer to produce the person so arrested before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within twenty-four hours.
After referring to the parallel provisions under FERA and Customs Act, 1962 the Court held that arrest can be made at the stage of enquiry if the authorised officer has ‘reasons to believe’ that the person has committed an offence under the Act and the arrest must be made on objective considerations on the material available with the authorised officer. The safeguards prescribed under PMLA are much higher than that prescribed under FERA and Customs Act, 1962.
In V. Senthil Balaji Versus the State Represented by Deputy Director And Ors. [2023 (8) TMI 410 – SUPREME COURT : (2024) 3 SCC 51], the Court held that to effect an arrest, an officer authorised has to assess and evaluate the materials in his possession, to form a ‘reason to believe’ that a person has been guilty of an offence punishable under the PMLA, 2002. Thereafter, he is at liberty to arrest, while performing his mandatory duty of recording the reasons. The said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. Any non-compliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. Thereafter, the arrestee has to be taken to the Special Court, or the Judicial Magistrate or the Metropolitan Magistrate, as the case may be, having the jurisdiction within 24 hours of such arrest. The Court went on to hold that the power of arrest under Section 19 of the PMLA, 2002 is meant for investigation alone. Regarding the role of the Magistrate, it was held that a Magistrate has a distinct role to play when a remand is made of an accused person to an authority under the PMLA, 2002. It is his bounden duty to see to it that Section 19 of the PMLA, 2002 is duly complied with and any failure would entitle the arrestee to get released. Once the Magistrate is satisfied that the conditions prescribed under Section 19 of the PMLA, 2002 are complied, he can consider the request for custody.
In both the above cited cases, it was held that the authorised officers must have ‘reasons to believe’ based on the material on hand that the person has committed an offence under the Act and the authorised officer must serve on the arrestee the grounds of arrest.
In the case of Pankaj Bansal Versus Union of India & Ors. – [2023 (10) TMI 175 – SUPREME COURT], the Hon’ble Court considered it important as to how the ED is required to ‘inform’ the arrested person of the grounds for his/her arrest. The Court held that for a person to seek bail, it would be essential for the arrested person to be aware of the grounds on which the authorized officer arrested him/her under Section 19 and the basis for the officer’s ‘reason to believe’ that he/she is guilty of an offence punishable under the Act of 2002. Therefore, communication of the grounds of arrest, as mandated by Article 22(1) of the Constitution and Section 19 of the Act of 2002, is meant to serve this higher purpose and must be given due importance.
It went on to hold that though it is not necessary for the arrested person to be supplied with all the material that is forwarded to the Adjudicating Authority under Section 19(2), he/she has a constitutional and statutory right to be ‘informed’ of the grounds of arrest, which are compulsorily recorded in writing by the authorized officer in keeping with the mandate of Section 19(1) of the Act of 2002. Conveyance of this information is not only to apprise the arrested person of why he/she is being arrested but also to enable such person to seek legal counsel and, thereafter, present a case before the Court under Section 45 to seek release on bail, if he/she so chooses. To give true meaning and purpose to the constitutional and the statutory mandate of Section 19(1) of the Act of 2002 of informing the arrested person of the grounds of arrest, we hold that it would be necessary, henceforth, that a copy of such written grounds of arrest is furnished to the arrested person as a matter of course and without exception.
From the above dictum laid by the Hon’ble Court, it is apparent that henceforth, grounds of arrest must be communicated to the arrestee without any exception so as to enable him to seek bail.
In the case of Ram Kishor Arora Versus Directorate of Enforcement [2023 (12) TMI 785 – SUPREME COURT : 2023 INSC 1082], the Apex 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 concerned officer 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.
The Supreme Court categorically held that the judgment in the case of Pankaj Bansal is prospective.
In the case of Prabir Purkayastha Versus State (NCT of Delhi) [2024 (5) TMI 1104 – SUPREME COURT] the Hon’ble Court considering the legality of the arrest under Unlawful Activities (Prevention) Act, 1967, inasmuch as written grounds of arrest has not been communicated. Reliance was based on Pankaj Bansal and Ram Kishore Arora. It was contended by the Department that there is an inherent difference between the provisions contained in Section 19 of the PMLA and Section 43A and 43B of the UAPA. The Court held that there is no significant difference in the language employed in Section 19 (1) of the PMLA and Section 43B (1) of the UAPA which can persuade them to take a view that the interpretation of the phrase ‘inform him of the grounds for such arrest’ made by this Court in the case of Pankaj Bansal should not be applied to an accused arrested under the provisions of the UAPA.
It further held that any person arrested for allegation of commission of offences under the provisions of UAPA or for that matter any other offence(s) has a fundamental and a statutory right to be informed about the grounds of arrest in writing and a copy of such written grounds of arrest have to be furnished to the arrested person as a matter of course and without exception at the earliest. This would provide the arrestee to consult his Advocate; oppose the police custody remand and to seek bail. Any other interpretation would be tantamount to diluting the sanctity of the fundamental right guaranteed under Article 22 (1) of the Constitution of India.
It also held that mere fact that a charge sheet has been filed in the matter, would not validate the illegality and the unconstitutionality committed at the time of arresting the accused and the grant of initial police custody remand to the accused. The Court went on to hold that the ‘grounds of arrest’ would invariably be personal to the accused and cannot be equated with the ‘reasons of arrest’ which are general in nature.
From the above judgment it is clear that when the provisions for arrest in any Act indicate the need to communicate the grounds of arrest, it has to be in writing and must be personal to the accused and not general in nature. Also, the superior courts can always look into the legality of the arrest even after the chargesheet is filed in the matter.
In the case of Arvind Kejriwal Versus Directorate of Enforcement [2024 (7) TMI 760 – SUPREME COURT : 2024 INSC 512], the Hon’ble Supreme Court was inter alia considering whether the arrestee is entitled to be supplied with a copy of the “reasons to believe”. The failure to record “reasons to believe” in writing will result in the arrest being rendered illegal and invalid. Providing the written “grounds of arrest”, is a must and the authorized officer’s genuine belief and reasoning based on the evidence that establishes the arrestee’s guilt is also the legal necessity. Existence and validity of the “reasons to believe” goes to the root of the power to arrest. The “reasons to believe” that the person is guilty of an offence should be founded on the material in the form of documents and oral statements. The Court interestingly held that an officer cannot be allowed to selectively pick and choose material implicating the person to be arrested. They have to equally apply their mind to other material which absolves and exculpates the arrestee. Subjectivity of the opinion is not a carte blanche to ignore relevant absolving material without an explanation. In such a situation, the officer commits an error in law which goes to the root of the decision making process and amounts to legal malice.
On the aspect of recording reasons for “necessity to arrest”, the matter has been referred to a Larger Bench.
To sum up the findings in the above cases:
- Grounds of arrest must be in writing and personal to the arrestee, and duly served on the arrestee
- This proposition is applicable from 04-Oct-2023
- Any Act which contains the phrase ‘inform him of the grounds for such arrest’ mandates the service on the arrestee the grounds of arrest in writing.
- The Superior courts can always look into the legality of arrest even after the charge sheet is filed.
- Not only the ‘grounds of arrest’ must be communicated it must include the ‘reasons to believe’ that the person has committed an offence under the Act.
- The ‘reasons to believe’ must take into account not only the inculpatory material but must also consider the exculpatory material to avoid the vice of bias.
- The ‘necessity to arrest’ is referred to the Larger Bench.
APPLICABILITY OF PANKAJ BANSAL TO ARREST PROVISIONS UNDER INDIRECT TAXES
In the case of Kshitij Ghildiyal Versus Director General of GST Intelligence, Delhi [2024 (12) TMI 1001 – DELHI HIGH COURT] the Delhi High Court held that Section 69 (2) of CGST Act mandates that the officer authorised to arrest the said person ‘shall’ inform such a person of the grounds of arrest. The argument offered that remand application itself subsumed the grounds of arrest, is unmerited. The Court held that the Supreme Court has frowned upon ‘general’ grounds of arrest, stating that they had to be highly specific in nature. As no effort was made at the stage of arrest or immediately thereafter, it would vitiate the arrest itself, amounting to an infraction of the petitioner’s right.
In the case of Mr. Syed Sajjad Ali, Versus The Senior Intelligence Officer, Directorate of Revenue Intelligence, Bengaluru [2024 (7) TMI 1081 – KARNATAKA HIGH COURT] the Karnataka High Court held that the requirement of communicating the grounds of arrest and detention to the accused in writing, in the language known to him is the requirement of law and there cannot be any compromise in the same. Therefore, prima facie non-compliance of such requirement, which is the mandate of law naturally vitiates the arrest and detention of the petitioner.
From the above exposition it is obvious that communicating the ‘grounds of arrest’ in writing is mandatory and in the absence of the same, it would vitiate the arrest. Therefore, the CBIC and CBIT may issue necessary instructions to all field formations to take note of the current development of law regarding arrest so that all field officers act in due compliance of law.
