New Delhi: The Delhi HC, in a detailed judgment, has reinforced the validity of orally communicating the grounds of arrest to individuals accused under the Prevention of Money Laundering Act (PMLA), 2002, for arrests made prior to the Supreme Court’s decision in Pankaj Bansal v. Union of India on October 3, 2023.
Justice Vikas Mahajan presided over the case involving Neeraj Singal, former Managing Director of Bhushan Steel Limited, who was arrested in connection with a money laundering case linked to a bank fraud investigation by the Enforcement Directorate (ED). Singal’s legal challenge against his arrest on June 9, 2023, and his bail plea were both dismissed by the court.
In his ruling, Justice Mahajan emphasized,
“There is absolutely no doubt that at the time of arrest of the petitioner, the law laid down in Moin Akhtar Qureshi was holding the field and this position continued till the pronouncement of decision in Pankaj Bansal. Thus, at the time of petitioner’s arrest, oral communication of the grounds of arrest was proper compliance of the provisions of Section 19(1) of the PMLA.”
The court further observed,
“The above position is also fortified by the observation of the Supreme Court in Ram Kishor Arora (supra) wherein 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 concerned officer in not furnishing the same in writing could be faulted with.”
The Pankaj Bansal judgment had mandated that the ED provide written grounds of arrest to the accused, a shift from the earlier practice. However, the Ram Kishor Arora v. Union of India ruling clarified that the ED is now only obligated to inform the accused of the grounds orally at the time of arrest, with written reasons to be provided within 24 hours. This ruling also stated that the Pankaj Bansal judgment would not apply retrospectively.
Justice Mahajan also noted the thoroughness of the arrest procedure in Singal’s case, stating,
“When the remand application was juxtaposed with the ‘ground of arrest’, it revealed that the remand application virtually contained the grounds of arrest. Therefore, in view of the law laid down in Moin Akhtar Qureshi, the petitioner stood informed of grounds of arrest in terms of Section 19(1) of the PMLA when he was produced before the special judge.”
Addressing the contention regarding the non-forwarding of the arrest order and related materials to the Adjudicating Authority, the court found that the delay was justified due to the weekend closure of the office.
“The petitioner was arrested on 09.06.2023 at 10:25 pm, which happened to be a Friday night…copy of arrest order along with other relevant material was immediately forwarded on 12.06.2023,”
the court explained.
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This comprehensive judgment by the Delhi HC provides clarity on the procedural aspects of arrests under the PMLA, particularly in the context of the evolving legal landscape following the Pankaj Bansal and Ram Kishor Arora judgments.
Counsel for Petitioner: Mr. Kapil Sibal, Sr. Advocate, Dr. Abhishek Menu Singhvi, Sr. Advocate, Mr. Vikas Pahwa, Sr. Advocate with a team of advocates.
Counsel for Respondent: Mr. Zoheb Hossain, Special Counsel with a team of advocates and ED officials.
Case Title: NEERAJ SINGAL v. DIRECTORATE OF ENFORCEMENT
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