Pankaj Bansal v/s Union of India & Ors. [Criminal Appeal Nos 3051-3052 of 2023]
The Supreme Court observed that Non-Cooperation By Witness Can’t Be A Reason For Arrest under Prevention of Money Laundering Act, 2002 (PMLA).
The division bench of Justice A.S. Bopanna and Justice Sanjay Kumar said, “mere non-cooperation of a witness in response to the summons issued under Section 50 of the Act of 2002 would not be enough to render him/her liable to be arrested under Section 19.”
The issue raised was whether the arrest of the appellants under Section 19 of the Prevention of Money Laundering Act, 2002 was valid and lawful and whether the impugned orders of remand passed by the Vacation Judge/Additional Sessions Judge, Panchkula, measure up.
In that context, the court made it clear that the mere passing of an order of remand would not be sufficient in itself to validate the appellants’ arrests, if such arrests are not in conformity with the requirements of Section 19 of the PMLA.
Appellant challenged the orders passed by a Division Bench of the Punjab & Haryana High Court dismissing the Civil Writ Petition filed by Pankaj Bansal and his father, Basant Bansal.
The Division Bench opined that, as the constitutional validity of Section 19 of the PMLA had been upheld by the Supreme Court, the challenge to the same by the writ petitioners could not be considered only because of the fact that a review petition was pending before the Supreme Court. The prayer of the writ petitioners to that effect was accordingly rejected.
Further the Division Bench rejected the prayer of the writ petitioners to quash/set aside their arrest orders along with their arrest memos and the consequential proceedings arising therefrom, including the orders passed by the Vacation Judge/Additional Sessions Judge, Panchkula, whereby they were remanded to the custody of the Directorate of Enforcement and thereafter, to judicial custody.
The Apex Court noted that the failure of the appellants to respond to the questions put to them by the ED would not be sufficient in itself for the Investigating Officer to opine that they were liable to be arrested under Section 19, as that provision specifically requires him to find reason to believe that they were guilty of an offence under the PMLA.
“Needless to state, the format would be followed all over the country by the authorized officers who exercise the power of arrest under Section 19(1) of the Act of 2002 but, in certain parts of the country, the authorized officer would inform the arrested person of the grounds of arrest by furnishing the same in writing, while in other parts of the country, on the basis of the very same prescribed format, the authorized officer would only read out or permit reading of the contents of the grounds of arrest. This dual and disparate procedure to convey the grounds of arrest to the arrested person cannot be countenanced on the strength of the very same arrest order, in the aforestated prescribed format”, the court said.
To give true meaning and purpose to the constitutional and the statutory mandate of Section 19(1) of the PMLA of informing the arrested person of the grounds of arrest, the bench held 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.
The Apex Court held that the clandestine conduct of the ED in proceeding against the appellants, by recording the second ECIR immediately after they secured interim protection in relation to the first ECIR, does not commend acceptance as it reeks of arbitrary exercise of power. In effect, the arrest of the appellants and, in consequence, their remand to the custody of the ED and, thereafter, to judicial custody, cannot be sustained.