PANKAJ BANSALversusUNION OF INDIA & ORS.

                 [2023] 12 S.C.R. 714 : 2023 INSC 866



                            CASE DETAILS

                           PANKAJ BANSAL
                                     v.
                      UNION OF INDIA & ORS.
               (Criminal Appeal Nos. 3051-3052 of 2023)
                          OCTOBER 03, 2023
           [A. S. BOPANNA AND SANJAY KUMAR, JJ.]
                             HEADNOTES
      Issue for consideration: Whether the arrest of the appellants u/s. 19
of the Prevention of Money Laundering Act, 2002 was valid; whether there
was proper compliance with s.19(1) of the Act of 2002 and as to whether the
Vacation Judge/Additional Sessions Judge correctly considered that issue
while passing the remand orders; what is the importance of informing the
arrested person of the grounds for his/her arrest.
     Prevention of Money Laundering Act, 2002 – Compliance of s.19
of the Act – Proper or not:
      Held: The remand order dated 15.06.2023 passed by the Vacation
Judge/Additional Sessions Judge reflects total failure on his part in
discharging his duty as per the expected standard – The Judge did not even
record a finding that he perused the grounds of arrest to ascertain whether
the ED had recorded reasons to believe that the appellants were guilty of an
offence under the Act of 2002 and that there was proper compliance with the
mandate of s.19 of the Act of 2002 – He merely stated that, keeping in view
the seriousness of the offences and the stage of the investigation, he was
convinced that custodial interrogation of the accused persons was required
in the present case and remanded them to the custody of the ED – Analyzing
the arrest of the appellants, neither of the appellants was shown as accused
in the first ECIR registered by the ED – Both the appellants secured interim
protection by way of anticipatory bail from the High Court – However,
both the appellants were summoned on 14.06.2023 for interrogation in
connection with the first ECIR and summons were served on 13.06.2023 –
Significantly, second ECIR was recorded on 13.06.2023 in connection with
                                      714
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                             715


FIR No.0006 which was registered on 17.04.2023 – Therein also, neither
of the appellants were shown as accused and only one ‘RB’ was shown
as accused – Both appellants had presented themselves at the ED’s office
– Thereafter, both appellants were arrested in connection with the second
ECIR, were in exercise of power u/s. 19(1) of the Act of 2002 – It was alleged
that both appellants failed to respond to the questions put by ED – Mere
non-cooperation of a witness in response to the summons issued u/s. 50 of
the Act of 2002 would not be enough to render him/her liable to be arrested
u/s. 19 – In any event, it is not open to the ED to expect an admission of
guilt from the person summoned for interrogation and assert that anything
short of such admission would be an ‘evasive reply’ – Also, it is the admitted
position is that the ED’s Investigating Officer merely read out or permitted
reading of the grounds of arrest of the appellants and left it at that, which
is also disputed by the appellants – As this form of communication is not
found to be adequate to fulfil compliance with the mandate of Art. 22(1) of
the Constitution and s.19(1) of the Act of 2002 – Thus, there is no hesitation
in holding that their arrest was not in keeping with the provisions of s.19(1)
of the Act of 2002. [Paras 18, 19, 25, 35]
     Constitution of India – Art. 22 – Prevention of Money Laundering
Act, 2002 – Informing the arrested person of the grounds for his/her
arrest – Importance of:
      Held: Article 22(1) of the Constitution provides, inter alia, 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 – It may be noted that
s.45 of the Act of 2002 enables the person arrested u/s. 19 thereof to seek
release on bail but it postulates that unless the twin conditions prescribed
thereunder are satisfied, such a person would not be entitled to grant of bail
– The twin conditions set out in the provision are that, firstly, the Court must
be satisfied, after giving an opportunity to the public prosecutor to oppose
the application for release, that there are reasonable grounds to believe that
the arrested person is not guilty of the offence and, secondly, that he is not
likely to commit any offence while on bail – To meet this requirement, it
would be essential for the arrested person to be aware of the grounds on
which the authorized officer arrested him/her u/s.19 and the basis for the
officer’s ‘reason to believe’ that he/she is guilty of an offence punishable
716          SUPREME COURT REPORTS                          [2023] 12 S.C.R.


under the Act of 2002 – It is only if the arrested person has knowledge of
these facts that he/she would be in a position to plead and prove before the
Special Court that there are grounds to believe that he/she is not guilty of
such offence, so as to avail the relief of bail – Therefore, communication
of the grounds of arrest, as mandated by Art. 22(1) of the Constitution and
s.19 of the Act of 2002, is meant to serve this higher purpose and must be
given due importance. [Para 29]
     Prevention of Money Laundering Act, 2002 – Furnishing the
written grounds of arrest to arrested person:
       Held: There is no valid reason as to why a copy of such written
grounds of arrest should not be furnished to the arrested person as a matter
of course and without exception – There are two primary reasons as to why
this would be the advisable course of action to be followed as a matter of
principle – Firstly, in the event such grounds of arrest are orally read out
to the arrested person or read by such person with nothing further and this
fact is disputed in a given case, it may boil down to the word of the arrested
person against the word of the authorized officer as to whether or not there
is due and proper compliance in this regard – Such a precarious situation
is easily avoided and the consequence thereof can be obviated very simply
by furnishing the written grounds of arrest, as recorded by the authorized
officer in terms of s.19(1) of the Act of 2002, to the arrested person under
due acknowledgment, instead of leaving it to the debatable ipse dixit of the
authorized officer – Secondly, 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 u/s. 45 to seek release on bail, if he/she so chooses. [Paras 32, 33]
     Prevention of Money Laundering Act, 2002 – Non-compliance
of mandate under Art.22 of Constitution and s.19 of the 2002 Act –
Arbitrary exercise of power by ED:
      Held: In the case on hand, the admitted position is that the ED’s
Investigating Officer merely read out or permitted reading of the grounds
of arrest of the appellants and left it at that, which is also disputed by the
appellants – As this form of communication is not found to be adequate to
fulfil compliance with the mandate of Art. 22(1) of the Constitution and
s.19(1) of the Act of 2002, there is no hesitation in holding that their arrest
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                             717


was not in keeping with the provisions of s.19(1) of the Act of 2002 – Further,
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. [Para 35]

       LIST OF CITATIONS AND OTHER REFERENCES

     State of Punjab v. Gurdial Singh (1980) 2 SCC 471 : [1980] 1 SCR
1071; Collector (District Magistrate), Allahabad and another v. Raja
Ram Jaiswal (1985) 3 SCC 1 : [1985] 3 SCR 995; Ravi Yashwant Bhoir v.
Collector (2012) 4 SCC 407 : [2012] 3 SCR 775 – relied on.
     Moin Akhtar Qureshi v. Union of India and Others 2017 SCC OnLine
Del 12108; Chhagan Chandrakant Bhujbal v. Union of India and Others
02017 Cri LJ (NOC 301) 89 : 2017 (1) AIR Bom R (Cri) 929 – held not
correct law.
      Vijay Madanlal Choudhary and others v. Union of India and Others
2022 (10) SCALE 577; V. Senthil Balaji v. The State represented by Deputy
Director and Others Criminal Appeal Nos. 2284-2285 of 2023, decided on
07.08.2023; Madhu Limaye and Others (1969) 1 SCC 292 : [1969] 3 SCR
154; Devinder Singh v. State of Punjab (2008) 1 SCC 728 : [2007] 11 SCR
475; Santosh S/o Dwarkadas Fafat v. State of Maharashtra (2017) 9 SCC
714 : [2017] 10 SCR 129 – referred to.
       OTHER CASE DETAILS INCLUDING IMPUGNED
              ORDER AND APPEARANCES

     CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos.
3051-3052 of 2023.
    From the Judgment and Order dated 20.07.2023 and 26.07.2023
in CWP No.14536 of 2023 of the High Court of Punjab & Haryana at
Chandigarh.
     With
     Criminal Appeal Nos. 3053-3054 of 2023.
718          SUPREME COURT REPORTS                      [2023] 12 S.C.R.


      Appearances:
     Dr. A.M. Singhvi, Randeep Rai, Vikram Chaudhary, Sr. Advs., Vijay
Agarwal, Malak Manish Bhatt, Ms. Neeha Nagpal, Vijay Nair, Rajat Joneja,
Ms. Rubina Virmani, Kunal Dawar, Vishvendra Tomar, Mandeep Singh,
Aavishkar Singhvi, Yash Verma, Anmol Kumar, Nikhil Rohatgi, Siddharth
Seem, Advs. for the Appellant.
    S.V. Raju, A.S.G., Mukesh Kumar Maroria, Zoheb Hussain, Annam
Venkatesh, Ms. Sairica Raju, Advs. for the Respondents.

       JUDGMENT / ORDER OF THE SUPREME COURT

                             JUDGMENT
      SANJAY KUMAR, J.
      1. Leave granted.
      2. 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 fi led by his father, Basant Bansal. By the order
dated 20.07.2023, the Division Bench opined that, as the constitutional
validity of Section 19 of the Prevention of Money Laundering Act, 2002
(for brevity, ‘the Act of 2002’), 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. By the later order dated 26.07.2023, 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 dated 15.06.2023,
20.06.2023 and 26.06.2023 passed by the learned Vacation Judge/
Additional Sessions Judge, Panchkula, whereby they were remanded to
the custody of the Directorate of Enforcement (for brevity, ‘the ED’)
and thereafter, to judicial custody. The Division Bench further held that,
keeping in view the gravity of the allegations against them, their prayer
to be released from custody did not deserve acceptance and rejected
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                          719
                       [SANJAY KUMAR, J.]

the same. In consequence, the Division Bench dismissed both the writ
petitions. Hence, these appeals by Pankaj Bansal and Basant Bansal.
     3. The genesis of these appeals is traceable to FIR No. 0006 dated
17.04.2023 registered by the Anti-Corruption Bureau, Panchkula, Haryana,
under Sections 7, 8, 11 and 13 of the Prevention of Corruption Act, 1988,
read with Section 120B IPC for the offences of corruption and bribery along
with criminal conspiracy. The names of the accused in this FIR are:
     ‘i). Mr. Sudhir Parmar (the then Special Judge, CBI and ED,
     Panchkula);
     ii). Mr. Ajay Parmar (nephew of Mr. Sudhir Parmar and Deputy
     Manager (Legal) in M3M Group);
     iii). Mr. Roop Bansal (Promotor of M3M Group); and
     iv). other unknown persons.’
      4. Significantly, prior to this FIR, between the years 2018 and 2020,
13 FIRs were gotten registered by allottees of two residential projects of
the IREO Group, alleging illegalities on the part of its management. On
the strength of these FIRs, the ED recorded Enforcement Case Information
Report No. GNZO/10/2021 dated 15.06.2021 (hereinafter, ‘the first ECIR’)
in connection with the money laundering offences allegedly committed by
the IREO Group and Lalit Goyal, its Vice-Chairman and Managing Director.
Neither in the FIRs nor in the first ECIR were M3M Group or the appellants
herein arrayed as the accused. Further, no allegations were levelled against
them therein. On 14.01.2022, the ED filed Prosecution Complaint No.
01/2022, titled ‘Assistant Director, Directorate of Enforcement vs. Lalit
Goyal and others’, against seven named accused, under Section 200 Cr.P.C
read with Sections 44 and 45 of the Act of 2002. Notably, M3M Group and
the appellants did not figure amongst those named accused. The number
of FIRs had also increased from 13 to 30, as per this complaint. This case
was numbered as COMA/01/2022, titled ‘Directorate of Enforcement vs.
Lalit Goyal and others’, and was pending in the Court of Sudhir Parmar,
Special Judge. At that stage, the Anti-Corruption Bureau, Panchkula,
received information that Sudhir Parmar was showing favouritism to Lalit
Goyal, the owner of IREO Group, and also to Roop Bansal and his brother,
Basant Bansal, the owners of M3M Group. This led to the registration of
720          SUPREME COURT REPORTS                          [2023] 12 S.C.R.


FIR No. 0006 dated 17.04.2023. On 12.05.2023, the ED issued summons to
M3M India Pvt. Ltd., calling upon it to provide information and documents
pertaining to transactions with certain companies. Thereafter, on 01.06.2023,
the ED raided the properties of M3M Group and effected seizures of assets
and bank accounts. Roop Bansal was arrested by the ED on 08.06.2023
apropos the first ECIR.
       5. Apprehending that action would be taken against them also in the
context of the first ECIR, Pankaj Bansal and Basant Bansal secured interim
protection from the Delhi High Court in Bail Application Nos. 2030 and
2031 of 2023. By separate orders dated 09.06.2023 passed therein, the Delhi
High Court noted that Pankaj Bansal and Basant Bansal had not been named
in the first ECIR and that the ED had not yet been able to implicate them
in any of the scheduled offences under the Act of 2002. Further, the High
Court noted that Pankaj Bansal had not even been summoned by the ED in
that case. The High Court accordingly granted them interim protection by
way of anticipatory bail, subject to conditions, till the next date of hearing,
i.e., 05.07.2023. Special Leave Petition (Crl.) Nos. 7384 and 7396 of 2023
were filed by the ED assailing the orders dated 09.06.2023 before this Court
and the same are stated to be pending.
     6. In the meanwhile, on the basis of FIR No. 0006 dated 17.04.2023,
the ED recorded another ECIR, viz., ECIR/GNZO/17/2023, on 13.06.2023
(hereinafter, ‘the second ECIR’) against:
      i). Mr. Sudhir Parmar;
      ii). Mr. Ajay Parmar;
      iii). Mr. Roop Bansal; and
      iv). others who are named in the FIR/unknown persons.
      However, summons were issued by the ED to Pankaj Bansal and Basant
Bansal on 13.06.2023 at 06.15 pm in relation to the first ECIR, requiring
them to appear before the ED on 14.06.2023 at 11.00 am. Though the copy
of the summons placed before this Court pertains to Pankaj Bansal alone,
the email dated 13.06.2023 of the Assistant Director of the ED, bearing the
time 06.15 pm, was addressed to both Pankaj Bansal and Basant Bansal and
required their compliance with the summons on 14.06.2023 at 11 am. While
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                            721
                       [SANJAY KUMAR, J.]

Pankaj Bansal and Basant Bansal were at the office of the ED at Rajokri,
New Delhi, in compliance with these summons, Pankaj Bansal was served
with fresh summons at 04.52 pm on 14.06.2023, requiring him to be present
before another Investigating Officer at 05.00 pm on the same day. This
summons was in connection with the second ECIR. There is lack of clarity
as to when summons in relation to the second ECIR were served on Basant
Bansal. According to the ED, he was served the summons on 13.06.2023
itself and refused to receive the same. However, it is an admitted fact that
Basant Bansal was also present at the ED’s office at Rajokri, New Delhi,
on 14.06.2023 at 11.00 am. It is also not in dispute that, while he was there,
Basant Bansal was arrested at 06.00 pm on 14.06.2023 and Pankaj Bansal
was arrested at 10.30 pm on the same day. These arrests, made in connection
with the second ECIR, were in exercise of power under Section 19(1) of the
Act of 2002. The arrested persons were then taken to Panchkula, Haryana,
and produced before the learned Vacation Judge/Additional Sessions Judge,
Panchkula. There, they were served with the remand application filed by
the ED. The learned Vacation Judge/Additional Sessions Judge, Panchkula,
initially passed order dated 15.06.2023 holding that custodial interrogation
of the arrested persons was required and granted their custody to the ED for
5 days with a direction to produce them before the Court on 20.06.2023.
By the later orders dated 20.06.2023 and 26.06.2023, their remand to the
custody of the ED was extended by 5 more days and thereafter, they were
sent to judicial custody.
      7. Assailing the first remand order dated 15.06.2023, Pankaj Bansal
and Basant Bansal approached the Delhi High Court, vide WP (Crl.) Nos.
1770 and 1771 of 2023. However, by order dated 16.06.2023, the Delhi High
Court opined that the appropriate remedy for them would be to approach
the Punjab & Haryana High Court and challenge the said order of remand.
Holding so, the Delhi High Court dismissed their miscellaneous applications
but ordered notice in the writ petitions. Aggrieved by the Delhi High Court’s
order, Pankaj Bansal and Basant Bansal filed SLP (Crl.) Nos. 7443 and
7444 of 2023 before this Court. The SLPs were disposed of as withdrawn
on 04.07.2023, reserving liberty to approach the Punjab & Haryana High
Court against the remand orders. This Court further held that WP (Crl.)
Nos. 1770 and 1771 of 2023 before the Delhi High Court were rendered
infructuous. Thereupon, Pankaj Bansal and Basant Bansal filed the subject
722          SUPREME COURT REPORTS                        [2023] 12 S.C.R.


writ petitions before the Punjab & Haryana High Court which came to be
dismissed, vide the impugned orders of the Division Bench.
      8. Though Basant Bansal is not shown as an accused along with
his brother, Roop Bansal, in FIR No. 0006 dated 17.04.2023 on the
file of the Anti-Corruption Bureau, Panchkula, his name finds mention
in the body of the FIR as one of the owners of M3M Group to whom
favouritism was shown by Sudhir Parmar, Special Judge. However, the
name of Pankaj Bansal does not fi nd mention even in the contents of the
FIR. It was the specifi c case of the father and son in their writ petitions
before the High Court that their arrest under the provisions of the Act
of 2002 was a wanton abuse of power/authority and an abuse of process
by the ED, apart from being blatantly illegal and unconstitutional. They
also asserted that the ED acted in violation of the safeguards provided
in Section 19 of the Act of 2002. In this milieu, they made the following
prayers:
      ‘In view of the facts and circumstances mentioned above, it is,
      therefore, respectfully prayed that this Hon’ble Court may kindly be
      pleased to issue appropriate writ(s), order(s) and/or direction(s) to:-
      A. Read Down and/or Read Into as well as expound, deliberate
      upon and delineate the ambit, sweep and scope of Section 19(1)
      of PMLA in consonance with the principles, inter alia, enunciated
      by the Hon’ble Supreme Court in “Vijay Madanlal Choudhary
      Versus Union of India & Ors. 2022 SCC OnLine SC 929” and
      hold that: -
           i. The expression “material in possession” occurring therein
           must be confined, circumscribed and limited to legally
           admissible evidence of sterling quality and unimpeachable
           character on the basis whereof “reasons to believe” could be
           recorded in writing that the arrestee is “guilty” of the offence
           under Section 4 of PMLA;
           ii. The word “guilt” occurring therein would qualify a higher
           yardstick than a mere suspicion and the Ld. Court at the
           stage of remand is required to apply its judicial mind to the
           grounds as well as necessity for arrest as, inter alia, held in
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                             723
                          [SANJAY KUMAR, J.]

           “Arnesh Kumar Versus State of Bihar, (2014) 8 SCC 273”
           and as accorded imprimatur in “Satender Kumar Antil
           Versus Central Bureau of Investigation and another 2022
           SCC online sc 825”;
           iii. The expression ‘communicate’ occurring therein would
           definitely entail physical communication and furnishing the
           grounds of arrest to the arrestee in the context of the obligation
           for “reason for such belief to be recorded in writing” read with
           Rules 2(1)(g) & 2(1)(h) of the PMLA Rules 2005 (Arrest Rules)
           which postulates the meaning of the word “order” to include the
           grounds of such arrest.’
     9. It is, therefore, clear that Pankaj Bansal and Basant Bansal did
not assail the constitutional validity of Section 19 of the Act of 2002 but
sought ‘reading down’ and/or ‘reading into’ the provisions thereof. Further,
they asserted that the remand orders were passed in a patently routine and
mechanical manner by the learned Vacation Judge/Additional Sessions
Judge, Panchkula, without satisfying himself about due compliance with
the mandate of Section 19 of the Act of 2002, and more particularly,
whether the threshold requirements of the provision were duly satisfied.
In consequence, they prayed for a direction to quash the remand orders as
well as the underlying arrest orders and arrest memos.
      10. Though the appellants did not challenge the constitutional validity
of Section 19 of the Act of 2002 in their writ petitions and had only sought
‘reading down’ and/or ‘reading into’ the provisions thereof in the light of the
judgment of this Court in Vijay Madanlal Choudhary and others vs. Union
of India and others1, the Division Bench of the Punjab & Haryana High
Court failed to note this distinction and disallowed their prayer under the
mistaken impression that they were challenging the constitutional validity
of the provision. The finer connotations and nuances of the language used
in Section 19 of the Act of 2002, to the extent left uncharted by this Court
in Vijay Madanlal Choudhray (supra), were still open to interpretation and
resolution and, therefore, the High Court would have been well within its
right to undertake that exercise. Be that as it may.


1   2022 (10) SCALE 577
724          SUPREME COURT REPORTS                       [2023] 12 S.C.R.


       11. Saket Singh, IRS, Deputy Director, Directorate of Enforcement,
Gurugram Zonal Office, Rajokri, New Delhi, deposed to the replies filed by
the ED before this Court. Therein, he acknowledged that the second ECIR
was recorded on 13.06.2023 based on FIR No. 0006 dated 17.04.2023.
He stated that the name of Pankaj Bansal and the owners of M3M Group
specifically found mention in the said FIR. However, perusal of the FIR
reflects that the name of Pankaj Bansal is not mentioned. Reference to ‘the
owners of M3M Group’ was in the context of Roop Bansal and his brother,
Basant Bansal, and not in a generic sense, as is now sought to be made
out so as to rope in Pankaj Bansal also. Saket Singh further stated that
though M3M Group, Pankaj Bansal and Basant Bansal were not named in
the connected FIRs of the first ECIR, investigation therein had shown that
the promoters of M3M Group were also involved in money laundering.
According to him, Basant Bansal refused to accept the summons issued on
13.06.2023 in relation to the second ECIR and did not give any information
relating thereto. Manual summons dated 14.06.2023 were stated to have
been issued to Pankaj Bansal on 14.06.2023 for his personal appearance
and for recording of his statement before the ED’s Investigating Officer
on the same day. He alleged that Pankaj Bansal accepted the summons but
remained evasive in providing relevant information to the ED. He justified
the issuance of summons on an immediate basis, by claiming that it was a
necessity as the promoters/key persons of M3M Group, including Pankaj
Bansal and Basant Bansal, had been deliberately avoiding investigation in
the first ECIR as well and were not complying with the previously issued
summons on multiple occasions. He alleged that Pankaj Bansal failed to
comply with the summons in respect of the first ECIR on multiple occasions,
i.e., with the summons dated 04.06.2023, 06.06.2023 and 07.06.2023. Again,
this statement is factually incorrect as these summonses were issued to
Basant Bansal and not to Pankaj Bansal.
      12. Saket Singh then went on to state that when Pankaj Bansal came to
the ED’s office on 14.06.2023, the Investigating Officer of the second ECIR
served a summons upon him and as the Investigating Officer had evidence
to show that Pankaj Bansal was guilty of the offence of money laundering,
he arrested him after following the due procedure prescribed under the Act
of 2002 and the rules framed thereunder. He asserted that the arrests were
made in accordance with Section 19 of the Act of 2002 and the information/
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                            725
                       [SANJAY KUMAR, J.]

details regarding the arrests of Pankaj Bansal and Basant Bansal were
duly communicated to Mrs. Abha Bansal and Ms. Payal Kanodia over the
telephone immediately after their arrests. He stated that the written grounds
of arrest were first read out to Basant Bansal but he refused to sign the same.
Subsequently, the written grounds of arrest were read over and explained in
his language, viz., Hindi, to Basant Bansal in the presence of witnesses and
the witnesses signed on the same as a token of correctness. Saket Singh again
asserted that issuance of summons on immediate basis was a necessity as
both of them had been deliberately avoiding investigation in the other case
as well and were not complying with the previously issued summons on
multiple occasions. This reiteration is incorrect as the first summons issued
to Pankaj Bansal was on 13.06.2023 at 06.15 pm requiring him to appear at
11.00 am on 14.06.2023 in connection with the first ECIR, which he duly
complied with, and again, while he was in the ED’s office at New Delhi,
he was served with the summons in connection with the second ECIR at
04.52 pm requiring him to be present at 05.00 pm, which he again complied
with. According to Saket Singh, during the investigation, both of them
were found to be actively involved in money laundering and deliberately
attempted to withhold information, that was in their exclusive knowledge,
which was crucial to establish their roles and to take the money laundering
investigation to its logical end. He asserted that they adopted an attitude of
non-cooperation during the investigation and the fact that they had bribed
the ED Judge to take benefit in the existing proceedings showed that they
were capable of influencing witnesses/authorities involved in the case. He
alleged that they were capable of tampering with the evidence and hence,
Pankaj Bansal was arrested on 14.06.2023 around 10.30 pm on the basis of
incriminating evidence. The written grounds of arrest were stated to have
been read by Pankaj Bansal in the presence of witnesses and, thereafter,
Pankaj Bansal and the witnesses signed on the same.
      13. Though much was stated and argued by both sides on the merits
of the matter in terms of the involvement of the appellants in the alleged
offence of money laundering, we make it clear that we are not concerned
with that issue at this point. The only issue for consideration presently is
whether the arrest of the appellants under Section 19 of the Act of 2002 was
valid and lawful and whether the impugned orders of remand passed by the
learned Vacation Judge/Additional Sessions Judge, Panchkula, measure up.
726          SUPREME COURT REPORTS                          [2023] 12 S.C.R.


In that context, we may also make 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 Act of 2002. Though judgments were cited by the ED which held to
the effect that legality of the arrest would be rendered immaterial once the
competent Court passes a remand order, those cases primarily dealt with the
issue of a writ of habeas corpus being sought after an order of remand was
passed by the jurisdictional Court and that ratio has no role to play here. The
understanding of the ED and its misplaced reliance upon that case law begs
the question as to whether there was proper compliance with Section 19(1)
of the Act of 2002 and as to whether the learned Vacation Judge/Additional
Sessions Judge, Panchkula, correctly considered that issue while passing
the remand orders. Therefore, as the very validity of the remand orders is
under challenge on that ground, the issue as to whether the arrest of the
appellants was lawful in its inception may also be open for consideration.
      14. At this stage, it would be apposite to consider the case law that
does have relevance to these appeals and the issues under consideration.
In Vijay Madanlal Choudhary (supra), a 3-Judge Bench of this Court
observed that Section 65 of the Act of 2002 predicates that the provisions
of the Code of Criminal Procedure, 1973, shall apply insofar as they are
not inconsistent with the provisions of the Act of 2002 in respect of arrest,
search and seizure, attachment, confiscation, investigation, prosecution
and all other proceedings thereunder. It was noted that Section 19 of the
Act of 2002 prescribes the manner in which the arrest of a person involved
in money laundering can be effected. It was observed that such power
was vested in high-ranking officials and that apart, Section 19 of the Act
of 2002 provided inbuilt safeguards to be adhered to by the authorized
officers, such as, of recording reasons for the belief regarding involvement
of the person in the offence of money laundering and, further, such reasons
have to be recorded in writing and while effecting arrest, the grounds of
arrest are to be informed to that person. It was noted that the authorized
officer has to forward a copy of the order, along with the material in his
possession, to the Adjudicating Authority and this safeguard is to ensure
fairness, objectivity and accountability of the authorized officer in forming
an opinion, as recorded in writing, regarding the necessity to arrest the
person involved in the offence of money laundering. The Bench also noted
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                           727
                         [SANJAY KUMAR, J.]

that it is the obligation of the authorized officer to produce the person so
arrested before the Special Court or Judicial Magistrate or a Metropolitan
Magistrate, as the case may be, within 24 hours and such production is to
comply with the requirement of Section 167 Cr.P.C. It was pointed out that
there is nothing in Section 19 of the Act of 2002 which is contrary to the
requirement of production under Section 167 Cr.P.C and being an express
statutory requirement under Section 19(3) of the Act of 2002, it has to be
complied by the authorized officer. It was concluded that the safeguards
provided in the Act of 2002 and the preconditions to be fulfilled by the
authorized officer before effecting arrest, as contained in Section 19 of the
Act of 2002, are equally stringent and of higher standard when compared
to the Customs Act, 1962, and such safeguards ensure that the authorized
officers do not act arbitrarily, by making them accountable for their judgment
about the necessity to arrest any person involved in the commission of the
offence of money laundering, even before filing of the complaint before
the Special Court. It was on this basis that the Bench upheld the validity of
Section 19 of the Act of 2002. The Bench further held that once the person
is informed of the grounds of arrest, that would be sufficient compliance
with the mandate of Article 22(1) of the Constitution and it is not necessary
that a copy of the ECIR be supplied in every case to the person concerned,
as such a condition is not mandatory and it is enough if the ED discloses
the grounds of arrest to the person concerned at the time of arrest. It was
pointed out that when the arrested person is produced before the Court, it
would be open to the Court to look into the relevant records presented by
the authorized representative of the ED for answering the issue of need for
continued detention in connection with the offence of money laundering. It
was, in fact, such stringent safeguards provided under Section 19 of the Act
of 2002 that prompted this Court to uphold the twin conditions contained
in Section 45 thereof, making it difficult to secure bail.
     15. This Court had occasion to again consider the provisions of the Act
of 2002 in V. Senthil Balaji vs. The State represented by Deputy Director
and others2, and more particularly, Section 19 thereof. It was noted that the
authorized officer is at liberty to arrest the person concerned once he finds



2   Criminal Appeal Nos. 2284-2285 of 2023, decided on 07.08.2023
728          SUPREME COURT REPORTS                          [2023] 12 S.C.R.


a reason to believe that he is guilty of an offence punishable under the Act
of 2002, but he must also perform the mandatory duty of recording reasons.
It was pointed out that this exercise has to be followed by the information
of the grounds of his arrest being served on the arrestee. It was affirmed
that it is the bounden duty of the authorized officer to record the reasons
for his belief that a person is guilty and needs to be arrested and it was
observed that this safeguard is meant to facilitate an element of fairness and
accountability. Dealing with the interplay between Section 19 of the Act
of 2002 and Section 167 Cr.P.C, this Court observed that the Magistrate is
expected to do a balancing act as the investigation is to be completed within
24 hours as a matter of rule and, therefore, it is for the investigating agency
to satisfy the Magistrate with adequate material on the need for custody of
the accused. It was pointed out that this important factor is to be kept in
mind by the Magistrate while passing the judicial order. This Court reiterated
that Section 19 of the Act of 2002, supplemented by Section 167 Cr.P.C.,
provided adequate safeguards to an arrested person as the Magistrate has
a distinct role to play when a remand is made of an accused person to an
authority under the Act of 2002. It was held that the Magistrate is under a
bounden duty to see to it that Section 19 of the Act of 2002 is duly complied
with and any failure would entitle the arrestee to get released. It was pointed
out that Section 167 Cr.P.C is meant to give effect to Section 19 of the Act
of 2002 and, therefore, it is for the Magistrate to satisfy himself of its due
compliance by perusing the order passed by the authority under Section
19(1) of the Act of 2002 and only upon such satisfaction, the Magistrate
can consider the request for custody in favour of an authority. To put it
otherwise, per this Court, the Magistrate is the appropriate authority who
has to be satisfied about the compliance with safeguards as mandated under
Section 19 of the Act of 2002. In conclusion, this Court summed up that
any non-compliance with the mandate of Section 19 of the Act of 2002,
would enure to the benefit of the person arrested and the Court would have
power to initiate action under Section 62 of the Act of 2002, for such non-
compliance. Significantly, in this case, the grounds of arrest were furnished
in writing to the arrested person by the authorized officer.
      16. In terms of Section 19(3) of the Act of 2002 and the law laid down
in the above decisions, Section 167 Cr.P.C. would necessarily have to be
complied with once an arrest is made under Section 19 of the Act of 2002.
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                             729
                        [SANJAY KUMAR, J.]

The Court seized of the exercise under Section 167 Cr.P.C. of remanding the
person arrested by the ED under Section 19(1) of the Act of 2002 has a duty
to verify and ensure that the conditions in Section 19 are duly satisfied and
that the arrest is valid and lawful. In the event the Court fails to discharge
this duty in right earnest and with the proper perspective, as pointed out
hereinbefore, the order of remand would have to fail on that ground and
the same cannot, by any stretch of imagination, validate an unlawful arrest
made under Section 19 of the Act of 2002.
      17. In the matter of Madhu Limaye and others3 was a 3-Judge Bench
decision of this Court wherein it was observed that it would be necessary
for the State to establish that, at the stage of remand, the Magistrate directed
detention in jail custody after applying his mind to all relevant matters
and if the arrest suffered on the ground of violation of Article 22(1) of
the Constitution, the order of remand would not cure the constitutional
infirmities attaching to such arrest.
      18. Viewed in this context, the remand order dated 15.06.2023 passed
by the learned Vacation Judge/Additional Sessions Judge, Panchkula,
reflects total failure on his part in discharging his duty as per the expected
standard. The learned Judge did not even record a finding that he perused
the grounds of arrest to ascertain whether the ED had recorded reasons to
believe that the appellants were guilty of an offence under the Act of 2002
and that there was proper compliance with the mandate of Section 19 of the
Act of 2002. He merely stated that, keeping in view the seriousness of the
offences and the stage of the investigation, he was convinced that custodial
interrogation of the accused persons was required in the present case and
remanded them to the custody of the ED! The sentence – ‘It is further (sic)
that all the necessary mandates of law have been complied with’ follows – ‘It
is the case of the prosecution….’ and appears to be a continuation thereof,
as indicated by the word ‘further’, and is not a recording by the learned
Judge of his own satisfaction to that effect.
      19. In consequence, it would be necessary for us to examine how
the appellants were arrested and verify whether it was in keeping with the
safeguards in Section 19 of the Act of 2002. In this context, the sequence


3   (1969) 1 SCC 292
730          SUPREME COURT REPORTS                         [2023] 12 S.C.R.


of events makes for an interesting reading. The first ECIR was registered
by the ED on 15.06.2021 and Roop Bansal was arrested in connection
therewith on 08.06.2023. Neither of the appellants was shown as an accused
therein. However, it is the case of the ED that investigation in relation to
the first ECIR is still ongoing. In any event, after the arrest of Roop Bansal,
both the appellants secured interim protection by way of anticipatory bail
on 09.06.2023, albeit till the next day of hearing, viz., 05.07.2023, from
the Delhi High Court. However, both the appellants were summoned on
14.06.2023 for interrogation in connection with the first ECIR, in which they
had interim protection. Summons in that regard were served upon them on
13.06.2023 at 06.15 pm. Significantly, the second ECIR was recorded only
on that day, i.e., on 13.06.2023, in connection with FIR No. 0006 which was
registered on 17.04.2023. Therein also, neither of the appellants was shown
as an accused and it was only Roop Bansal who stood named as an accused.
In compliance with the summons received by them vis-à-vis the first ECIR,
both the appellants presented themselves at the ED’s office at Rajokri, New
Delhi, at 11.00 am on 14.06.2023. While they were there, Pankaj Bansal
was served with summons at 04.52 pm, requiring him to appear before
another Investigating Officer at 05.00 pm in relation to the second ECIR.
As already noted, there is ambiguity as to when Basant Bansal was served
with such summons. It is the case of the ED that he refused to receive the
summons in relation to the second ECIR and he was arrested at 06.00 pm
on 14.06.2023. Pankaj Bansal received the summons and appeared but as
he did not divulge relevant information, the Investigating Officer arrested
him at 10.30 pm on 14.06.2023.
      20. This chronology of events speaks volumes and reflects rather
poorly, if not negatively, on the ED’s style of functioning. Being a premier
investigating agency, charged with the onerous responsibility of curbing the
debilitating economic offence of money laundering in our country, every
action of the ED in the course of such exercise is expected to be transparent,
above board and conforming to pristine standards of fair play in action. The
ED, mantled with far-reaching powers under the 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 the highest degree of dispassion and fairness.
In the case on hand, the facts demonstrate that the ED failed to discharge
its functions and exercise its powers as per these parameters.
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                             731
                        [SANJAY KUMAR, J.]

      21. In this regard, we may note that, though the appellants did not allege
colourable exercise of power or malafides or malice on the part of the ED
officials, they did assert in categorical terms that their arrests were a wanton
abuse of power, authority and process by the ED, which would tantamount
to the same thing. On that subject, we may refer to the observations of this
Court in State of Punjab vs. Gurdial Singh 4: -
            ‘The question, then, is what is malafides in the jurisprudence of
     power? Legal malice is gibberish unless juristic clarity keeps it separate
     from the popular concept of personal vice. Pithily put, bad faith which
     invalidates the exercise of power — sometimes called colourable
     exercise or fraud on power and oftentimes overlaps motives, passions
     and satisfactions — is the attainment of ends beyond the sanctioned
     purposes of power by simulation or pretension of gaining a legitimate
     goal. If the use of the power is for the fulfilment of a legitimate object
     the actuation or catalysation by malice is not legicidal. The action is
     bad where the true object is to reach an end different from the one for
     which the power is entrusted, goaded by extraneous considerations,
     good or bad, but irrelevant to the entrustment. When the custodian of
     power is influenced in its exercise by considerations outside those for
     promotion of which the power is vested the court calls it a colourable
     exercise and is undeceived by illusion. In a broad, blurred sense,
     Benjamin Disraeli was not off the mark even in law when he stated:
     “I repeat . . . that all power is a trust — that we are accountable for its
     exercise — that, from the people, and for the people, all springs, and
     all must exist”. Fraud on power voids the order if it is not exercised
     bona fide for the end designed. Fraud in this context is not equal to
     moral turpitude and embraces all cases in which the action impugned
     is to effect some object which is beyond the purpose and intent of the
     power, whether this be malice-laden or even benign. If the purpose is
     corrupt the resultant act is bad. If considerations, foreign to the scope
     of the power or extraneous to the statute, enter the verdict or impel
     the action, mala fides or fraud on power vitiates the acquisition or
     other official act.’



4   (1980) 2 SCC 471
732            SUPREME COURT REPORTS                         [2023] 12 S.C.R.


     A few years later, in Collector (District Magistrate), Allahabad and
another vs. Raja Ram Jaiswal5, this Court held as under:
             ‘Where power is conferred to achieve a purpose, it has been
       repeatedly reiterated that the power must be exercised reasonably and
       in good faith to effectuate the purpose. And in this context “in good
       faith” means “for legitimate reasons”. Where power is exercised for
       extraneous or irrelevant considerations or reasons, it is unquestionably
       a colourable exercise of power or fraud on power and the exercise of
       power is vitiated.’
       Again, in Ravi Yashwant Bhoir vs. Collector6, it was held thus:
             ‘Malafide exercise of power does not imply any moral turpitude.
       It means exercise of statutory power for “purposes foreign to those for
       which it is in law intended”. It means conscious violation of the law
       to the prejudice of another, a depraved inclination on the part of the
       au-thority to disregard the rights of others, where intent is manifested
       by its injurious acts. Passing an order for unauthorized purpose consti-
       tutes malice in law.’
       22. The way in which the ED recorded the second ECIR immediately
after the appellants secured anticipatory bail in relation to the first ECIR,
though the foundational FIR dated back to 17.04.2023, and then went about
summoning them on one pretext and arresting them on another, within a
short span of 24 hours or so, manifests complete and utter lack of bonafides.
Significantly, when the appellants were before the Delhi High Court seeking
anticipatory bail in connection with the first ECIR, the ED did not even bring
it to the notice of the High Court that there was another FIR in relation to
which there was an ongoing investigation, wherein the appellants stood
implicated. The second ECIR was recorded 4 days after the grant of bail
and it is not possible that the ED would have been unaware of the existence
of FIR No. 0006 dated 17.04.2023 at that time.
      23. Surprisingly, in its ‘Written Submissions’, the ED stated that it
started its inquiries in respect of this FIR in May, 2023, itself, but strangely,


5     (1985) 3 SCC 1
6     (2012) 4 SCC 407
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                              733
                        [SANJAY KUMAR, J.]

the replies filed by the ED do not state so! It is in this background that this
suppression before the Delhi High Court demonstrates complete lack of
probity on the part of the ED. Its prompt retaliatory move, upon grant of
interim protection to the appellants, by recording the second ECIR and acting
upon it, all within the span of a day, so as to arrest the appellants, speaks
for itself and we need elaborate no more on that aspect.
       24. Further, when the second ECIR was recorded on 13.06.2023 ‘after
preliminary investigations’, as stated in the ED’s replies, it is not clear as to
when the ED’s Investigating Officer had the time to properly inquire into the
matter so as to form a clear opinion about the appellants’ involvement in an
offence under the Act of 2002, warranting their arrest within 24 hours. This
is a sine qua non in terms of Section 19(1) of the Act of 2002. Needless to
state, authorities must act within the four corners of the statute, as pointed
out by this Court in Devinder Singh v. State of Punjab7, and a statutory
authority is bound by the procedure laid down in the statute and must act
within the four corners thereof.
      25. We may also note 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 Act of 2002. 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. As per its replies, it is the claim of the ED
that Pankaj Bansal was evasive in providing relevant information. It was
however not brought out as to why Pankaj Bansal’s replies were categorized
as ‘evasive’ and that record is not placed before us for verification. In any
event, it is not open to the ED to expect an admission of guilt from the
person summoned for interrogation and assert that anything short of such
admission would be an ‘evasive reply’. In Santosh S/o Dwarkadas Fafat
vs. State of Maharashtra8, this Court noted that custodial interrogation is
not for the purpose of ‘confession’ as the right against self-incrimination



7   (2008) 1 SCC 728
8   (2017) 9 SCC 714
734           SUPREME COURT REPORTS                          [2023] 12 S.C.R.


is provided by Article 20(3) of the Constitution. It was held that merely
because an accused did not confess, it cannot be said that he was not co-
operating with the investigation. Similarly, the absence of either or both of
the appellants during the search operations, when their presence was not
insisted upon, cannot be held against them.
      26. The more important issue presently is as to how the ED is
required to ‘inform’ the arrested person of the grounds for his/her arrest.
Prayer (iii) in the writ petitions filed by the appellants pertained to this.
Section 19 does not specify in clear terms as to how the arrested person
is to be ‘informed’ of the grounds of arrest and this aspect has not been
dealt with or delineated in Vijay Madanlal Choudhary (supra). Similarly,
in V. Senthil Balaji (supra), this Court merely noted that the information
of the grounds of arrest should be ‘served’ on the arrestee, but did not
elaborate on that issue. Pertinent to note, the grounds of arrest were
furnished in writing to the arrested person in that case. Surprisingly,
no consistent and uniform practice seems to be followed by the ED in
this regard, as written copies of the grounds of arrest are furnished to
arrested persons in certain parts of the country but in other areas, that
practice is not followed and the grounds of arrest are either read out to
them or allowed to be read by them.
     27. In this context, reliance is placed by the ED upon the decision
of a Division Bench of the Delhi High Court in Moin Akhtar Qureshi
vs. Union of India and others9, wherein it was observed that Section
19 of the Act of 2002 uses the expression ‘informed of the grounds of
such arrest’ and does not use the expression ‘communicate the grounds
of such arrest’ and, therefore, the obligation cast upon the authorized
officer under Section 19(1) is only to inform the arrestee of the grounds
of arrest and the provision does not oblige the authority to serve the
grounds for such arrest on the arrestee. Reliance is also placed by the
ED on the judgment of a Division Bench of the Bombay High Court
in Chhagan Chandrakant Bhujbal vs. Union of India and others10,
which held that the grounds of arrest are to be informed to the person



9 WP (Crl.) No. 2465 of 2017, decided on 01.12.2017 = 2017 SCC OnLine Del 12108
10 2017 Cri LJ (NOC 301) 89 = 2017 (1) AIR Bom R (Cri) 929
        PANKAJ BANSAL v. UNION OF INDIA & ORS.                            735
                       [SANJAY KUMAR, J.]

arrested and that would mean that they should be communicated at the
earliest but there is no statutory requirement of the grounds of arrest
being communicated in writing.
      28. No doubt, in Vijay Madanlal Choudhary (supra), this Court held
that non-supply of the ECIR in a given case cannot be found fault with, as
the ECIR may contain details of the material in the ED’s possession and
revealing the same may have a deleterious impact on the final outcome
of the investigation or inquiry. Having held so, this Court affirmed that
so long as the person is ‘informed’ of the grounds of his/her arrest, that
would be sufficient compliance with the mandate of Article 22(1) of the
Constitution.
      29. In this regard, we may note that Article 22(1) of the Constitution
provides, inter alia, 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. This 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. It may be
noted that Section 45 of the Act of 2002 enables the person arrested under
Section 19 thereof to seek release on bail but it postulates that unless the
twin conditions prescribed thereunder are satisfied, such a person would
not be entitled to grant of bail. The twin conditions set out in the provision
are that, firstly, the Court must be satisfied, after giving an opportunity to
the public prosecutor to oppose the application for release, that there are
reasonable grounds to believe that the arrested person is not guilty of the
offence and, secondly, that he is not likely to commit any offence while on
bail. To meet this requirement, 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. It is only if
the arrested person has knowledge of these facts that he/she would be in a
position to plead and prove before the Special Court that there are grounds
to believe that he/she is not guilty of such offence, so as to avail the relief
of bail. 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.
736           SUPREME COURT REPORTS                         [2023] 12 S.C.R.


      30. We may also note that the language of Section 19 of the Act of 2002
puts it beyond doubt that the authorized officer has to record in writing the
reasons for forming the belief that the person proposed to be arrested is guilty
of an offence punishable under the Act of 2002. Section 19(2) requires the
authorized officer to forward a copy of the arrest order along with the material
in his possession, referred to in Section 19(1), to the Adjudicating Authority
in a sealed envelope. 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. As already noted hereinbefore, It seems that the
mode of informing this to the persons arrested is left to the option of the
ED’s authorized officers in different parts of the country, i.e., to either furnish
such grounds of arrest in writing or to allow such grounds to be read by the
arrested person or be read over and explained to such person.
      31. That apart, Rule 6 of the 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, titled ‘Forms of records’, provides to the effect that
the arresting officer while exercising powers under Section 19(1) of the Act
of 2002, shall sign the Arrest Order in Form III appended to those Rules.
Form III, being the prescribed format of the Arrest Order, reads as under: -
      ‘ARREST ORDER
           Whereas, I………. Director/Deputy Director/Assistant Director/
      Officer authorized in this behalf by the Central Government, have
      reason to believe that ….. [name of the person arrested] resident of
      ….. has been guilty of an offence punishable under the provisions of
      the Prevention of Money-laundering Act, 2002 (15 of 2003);\
           Now, Therefore, in exercise of the powers conferred on me under
      sub-section (1) of section 19 of the Prevention of Money-laundering
      Act, 2002 (15 of 2003), I hereby arrest the said ….. [name of the
      person arrested] at ….. hours on ….. and he has been informed of the
      grounds for such arrest.
          PANKAJ BANSAL v. UNION OF INDIA & ORS.                          737
                       [SANJAY KUMAR, J.]

     Dated at ….. on this ….. day of ….. Two thousand …..
                                                           Arresting Officer
                                                         Signature with Seal
     To
     ……………………..
     ……………………..
     [Name and complete address of the person arrested]’
      Needless to state, this 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.
       32. That being so, there is no valid reason as to why a copy of such
written grounds of arrest should not be furnished to the arrested person as a
matter of course and without exception. There are two primary reasons as to
why this would be the advisable course of action to be followed as a matter
of principle. Firstly, in the event such grounds of arrest are orally read out
to the arrested person or read by such person with nothing further and this
fact is disputed in a given case, it may boil down to the word of the arrested
person against the word of the authorized officer as to whether or not there
is due and proper compliance in this regard. In the case on hand, that is the
situation insofar as Basant Bansal is concerned. Though the ED claims that
witnesses were present and certified that the grounds of arrest were read
out and explained to him in Hindi, that is neither here nor there as he did
not sign the document. Non-compliance in this regard would entail release
of the arrested person straightaway, as held in V. Senthil Balaji (supra).
Such a precarious situation is easily avoided and the consequence thereof
can be obviated very simply by furnishing the written grounds of arrest, as
738          SUPREME COURT REPORTS                          [2023] 12 S.C.R.


recorded by the authorized officer in terms of Section 19(1) of the Act of
2002, to the arrested person under due acknowledgment, instead of leaving
it to the debatable ipse dixit of the authorized officer.
      33. The second reason as to why this would be the proper course to
adopt is the constitutional objective underlying such information being given
to the arrested person. 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. In this regard,
the grounds of arrest in V. Senthil Balaji (supra) are placed on record and
we find that the same run into as many as six pages. The grounds of arrest
recorded in the case on hand in relation to Pankaj Bansal and Basant Bansal
have not been produced before this Court, but it was contended that they were
produced at the time of remand. However, as already noted earlier, this did
not serve the intended purpose. Further, in the event their grounds of arrest
were equally voluminous, it would be well-nigh impossible for either Pankaj
Bansal or Basant Bansal 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,
as 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
of the grounds of arrest read by or read out to him/her. 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.
      34. We may also note that the grounds of arrest recorded by the
authorized officer, in terms of Section 19(1) of the Act of 2002, would
be personal to the person who is arrested and there should, ordinarily, be
no risk of sensitive material being divulged therefrom, compromising the
sanctity and integrity of the investigation. In the event any such sensitive
material finds mention in such grounds of arrest recorded by the authorized
officer, it would always be open to him to redact such sensitive portions
in the document and furnish the edited copy of the grounds of arrest to the
arrested person, so as to safeguard the sanctity of the investigation.
         PANKAJ BANSAL v. UNION OF INDIA & ORS.                               739
                         [SANJAY KUMAR, J.]

       35. On the above analysis, 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. The decisions of the Delhi High Court in Moin Akhtar Qureshi
(supra) and the Bombay High Court in Chhagan Chandrakant Bhujbal
(supra), which hold to the contrary, do not lay down the correct law. In the
case on hand, the admitted position is that the ED’s Investigating Officer
merely read out or permitted reading of the grounds of arrest of the appellants
and left it at that, which is also disputed by the appellants. As this form of
communication is not found to be adequate to fulfil compliance with the
mandate of Article 22(1) of the Constitution and Section 19(1) of the Act of
2002, we have no hesitation in holding that their arrest was not in keeping
with the provisions of Section 19(1) of the Act of 2002. Further, as already
noted supra, 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.
      36. The appeals are accordingly allowed, setting aside the impugned
orders passed by the 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.
      The appellants shall be released forthwith unless their incarceration
is validly required in connection with any other case.
      In the circumstances, we make no orders as to costs.


Headnotes prepared by:                                             Appeals allowed.
Ankit Gyan