On petitions filed by the directors of the real estate group M3M, the father-son duo Basant Bansal and Pankaj Bansal were set at liberty by the Hon’ble Supreme Court in Pankaj Bansal vs Union of India & Ors. What makes the judgement notable is that it curbed down the boundless powers of the Enforcement Directorate given to it by the “draconian statute”.

The brief background leading up to this decision was that the first Enforcement Case Information Report (ECIR) was registered by ED on June 15, 2021 and Roop Bansal came to be arrested for the said ECIR on June 8, 2023 when neither Roop Bansal nor his father Pankaj Bansal were an accused in the ECIR. After the arrest of Roop Bansal, both the appellants sought interim protection till the next date of hearing i.e. July 5, 2023 from the Delhi High Court.

However, the second ECIR was recorded on June 13, 2023 in connection with another FIR wherein both the appellants were not named as an accused but in the ECIR, only Roop Bansal was named as an accused. Therefore, they were called for interrogation on June 14, 2023 and while they were at ED’s office, they were arrested. However, there was subsequent ambiguity as to when Basant Bansal was given summons and in relation to which ECIR was he summoned since he was not given the grounds of his arrest in writing and was allegedly only read orally.

In the instant matter, the legality of the arrest and remand was challenged and while allowing the petition filed by the accused persons, the Apex Court expressed serious criticism on the ED officer just orally reading out the grounds of arrest to the accused without supplying them with a written copy of the same.

Emphasis was placed on Section 167 of Code of Criminal Procedure and it was held that the ED’s actions in curbing money laundering needs to be fair and not vindictive. While setting aside the remand order, the court laid down norms making is compulsory for the copy of the grounds of arrest be given to the accused at the time of arrest, thereby giving true meaning to constitutional and statutory mandate of Section 19(f) of PMLA

While challenging the arrest, the Bansal duo challenged three different aspects of the exorbitant exercise of the power by ED. The first being whether there were reasonable grounds to believe that the accused were guilty of money laundering which is a mandate in order to exercise of power of arrest under section 19 of PMLA. Secondly, whether there were some urgent reasons that mandated the arrest of the accused persons and thirdly, whether the mode and manner of the arrest was in adherence to the law which meant “communicating” the grounds of arrest to the accused person.

The only ground that ED could take in order to validate the mandate for arresting the accused persons was that they “adopted an attitude of non-cooperation during their questioning”. Not only this, ED also supported its case by stating that it “read out” the grounds of arrest to the accused persons and had therefore, “communicated” the grounds of arrest to the accused persons.

The Supreme Court eventually decided that ED cannot arrest any person for non-cooperation as any admission to the guilt would be in the teeth of the fundamental right against compelled self-incrimination. Therefore, the Court held that any non-cooperation is required to be fact-based, and the allegation needs to have a leg to stand on.

The foremost part of the decision would be the Apex Court laying down the foundation of the mode and manner of arrest which included providing the accused with the grounds of arrest in writing. One of the rationales given by the Court while rendering this decision was that Section 45 envisages twin conditions of bail whereby the burden of proof is reversed. If the accused does not have the grounds for his arrest, it would not be possible for him to disprove the allegations against him.

The decision rendered by the Supreme Court is a reminder of the constitutional and statutory mandates of personal liberty which was consigned to oblivion by the recent statutes providing for stringent conditions of bail. This was a much-needed reminder that a state action that deprives personal liberty must be held accountable. The sense of not only imposing a burden but also imposing a high burden of proof that too on the accused gives unlimited powers to the police to curb the liberty of individuals.

This decision is a reminder that there is still a glow of hope left in challenges to the exercise of the powers of PMLA by ED especially after the Supreme Court unanimously upheld the validity of various challenged clauses in Vijay Madanlal Chaudhary.

Even though there could be a review of this decision, it has still started to build a body of precedent which can help in tipping the scales and according to value to the personal liberty as envisaged in the Constitution of India.

By - Prapti Allagh