Justice Suraj Govindaraj of the Karnataka High Court in Bineesh Kodiyeri vs Directorate Enforcement, Writ Petition 13261 of 2020 decided on 16 March 2021 had declared that the Enforcement Directorate – Investigating-arresting Officer under the Prevention of Money Laundering Act 2002 must inform and provide copy of arrest order and grounds of arrest to the person being arrested and that mere oral information would not be sufficient.
The Supreme Court in Pankaj Bansal vs Union of India & Ors, Criminal Appeal Nos 3051-3052 of 2023, (Justice A.S. Bopanna and Justice Sanjay Kumar) decided on 3 October 2023 approved the declaration of the Karnataka High Court (though not specifically referring to it). The Supreme Court has held 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 Karnataka High Court dealt with the issue as follows;
“The question is as to whether the arresting officer is required to only inform the grounds of arrest or provide the same in writing to the person arrested for an offence under the PMLA. The PMLA has various provisions relating to the offence of money laundering as regards which stringent punishments are prescribed. Furthermore, in terms of Section 45 of the PMLA for the person arrested to seek bail, it is required that such a person establishes before the said Court that the accused is not guilty of the offence alleged against him.
The expression ‘inform him of grounds of such arrest”- under Section 19(1) of the PMLA would have to be read in conjunction with Section 45 of the PMLA and cannot be read in isolation.
There could be a loss in communication if the said information is provided orally, inasmuch as the accused being a legally illiterate person or a layman, if the accused were not able to understand the grounds of arrest if orally informed, he would not be in a position to convey or communicate the same to his near and dear ones or his lawyers so as to satisfy the requirement of Section 45 of the PMLA. More so when the requirement for granting bail is placed at such a high standard.
To enable the accused to make out a case for bail, it is required that there is no loss in communication, and the exact reasons or grounds of arrest are required to be conveyed to the accused. This, in my considered opinion, can only be done in writing, in a language known to the accused as also in English.
In terms of Section 45 of PMLA, such a person can seek bail and obtain bail only if such a person were to establish that he is not guilty of the offence alleged against him. The defence of the accused and/or claim that the accused is not guilty in order to be granted bail by a Court can only be adjudicated by the Court on a touchstone of the contents of the arrest order and reasons for arrest or grounds for arrest.
This works in two manners. Firstly that it is only if the grounds for arrest are available with the accused, the accused can endeavour to contradict the said grounds so as to, at this stage, prima facie establish he/she is not guilty of such an offence. Secondly, the court can take into consideration the reasons for arrest as stated in the grounds for arrest where the standard is reason to believe that the arrestee is guilty of the offence and juxtaposing the same to the requirement provided under Section 45 of the PMLA for grant bail, i.e. for the accused/arrestee to establish that the said arrestee is not guilty of the said offence. This, in my considered opinion, cannot be done without both the reasons for arrest, i.e. grounds for arrest, as also grounds for the grant of bail being placed before the said Judge, which would essentially mean that the same is to be in writing and be capable of being produced by the accused before such Court.
There is considerable force in the submission made by Sri. Aravind Kamath learned Senior counsel that one of the safeguards put in place by the legislature to prevent abuse of the powers vested with the Authority under the PMLA is providing grounds of arrest to the arrestee. These grounds of arrest would not only have to be provided to the arrestee but also would form part of the case diary or the investigation file. Thus unless there are grounds sufficient to arrest a person which is recorded in writing, no person could be arrested under the PMLA. This by itself would be a safeguard so as to prevent any arbitrary exercise of power and/or an indiscriminate arrest being carried out by the authorities under the PMLA.
In that view of the matter, unless the accused is aware of the exact grounds of arrest and/or as to what the said accused is required to answer to, so as to establish that he is not guilty of the offence, he would not be able to meet the requirement of Section 45 of the PMLA. I am of the considered opinion that it would, but, be required for the Arresting Officer to provide the grounds of arrest to any person being arrested under PMLA in writing, mere oral information would not be sufficient. In that regard, necessary acknowledgement from the arrestee would have to be obtained in writing confirming the receipt of the same in writing.
As observed above, since it is required that the arresting officer inform and provide the arrestee with the arrest order and grounds of arrest in writing, it would be required that the investigating officer establish the positive fact of having provided the same in writing, since the negative cannot be established by the arrestee. Hence, in such cases, apart from obtaining the acknowledgement of the arrestee on the said arrest order and grounds of arrest, it may also be advisable for the arresting officer to email the said arrest order and grounds of arrest to the arrestee’s email account, to the e-Mail account of the lawyer and or the near and dear ones of the arrestee, if the lawyer or the near and dear ones are provided with a physical copy of the arrest order or grounds of arrest to obtain their acknowledgement of having received the same. The court before whom the arrestee has been produced to mandatorily enquire about the providing of the physical copy of the arrest order and grounds for the arrest in writing and record the response of the arrestee in the order sheet under the signature of the arrestee and the like.“
The Karnataka High Court held that in terms of Section 19 of PMLA, the Investigating Officer or the arresting officer is required to inform and provide a physical copy of the arrest order and grounds of arrest to the person being arrested. Mere oral information would not be sufficient.
The Supreme Court observations.
“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 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.
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.
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.”
Daksha Legal 