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How 2 different SC rulings on the same issue impact ED’s powers of arrest

The Supreme Court on Friday ruled that it is enough for the Enforcement Directorate (ED) to orally inform an accused of the grounds of their arrest at the time of arrest.

However, the court said that the written grounds of arrest must be supplied to the accused within 24 hours of their arrest.

Notably, the ruling, by a Bench of Justices Bela Trivedi and Satish Chandra Sharma, dilutes an October 3 two-judge Bench ruling of the Supreme Court that mandated the ED to furnish the grounds of arrest to the accused in writing when they are being taken into custody.

Section 19 of the Prevention of Money Laundering Act (PMLA), which deals with the ED’s power to arrest, says that the agency “shall, as soon as may be, inform him (the person arrested) of the grounds for such arrest.”

The Justices Trivedi and Sharma Bench held that the phrase “as soon as maybe” must be interpreted to mean “as early as possible”, “without avoidable delay”, “within reasonably convenient” or a “reasonably requisite” period of time.

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What are ED’s powers of arrest?

Section 19 of the PMLA 2002 allows authorised ED officials to arrest persons based on material in their possession, which gives them a reason to believe that one is guilty of an offence punishable under that law.

However, the reasons for such belief must be recorded in writing, and the grounds of arrest be informed to the accused “as soon as may be.”

Importantly, anyone arrested shall, within 24 hours, be taken to a Special Court, Judicial Magistrate, or Metropolitan Magistrate.

However, Article 22(3)(b) exempts the application of these safeguards to persons held under any preventive detention law, such as the Gujarat Prevention of Antisocial Activities Act, 1985, and the Bihar Control of Crimes Act, 1981, among others.

What has the top court ruled now?

The Bench was acting on a plea by real-estate company Supertech Limited’s founder, Ram Kishor Arora, challenging an order of the Delhi HC.

On June 27, the Delhi HC dismissed Arora’s petition to declare his arrest illegal and violative of his fundamental right(s) to equality, life, and protection in respect of conviction for offences under Articles 14, 21, and 20.

Arora’s plea contended that merely informing the accused of the grounds of arrest, by making him read them and obtaining his signature at the time of arrest, does not amount to supplying the grounds of arrest in writing. Adding that this oral intimation violates the SC ruling in Pankaj Bansal vs. UOI, Arora claimed his arrest violated Section 19(1) of the PMLA and his other fundamental rights.

In its December 15 ruling, the court held that the October 3 ruling in Pankaj Bansal, mandating furnishing of arrest grounds to the accused in writing at the time of arrest, cannot be applied retrospectively, as in the current case the arrest happened on June 26, approximately three months before the October 3 ruling.

The court underscored that since the October 3 ruling was by a two-judge Bench, it could easily be superseded by its July 27 decision in Vijay Mandanlal Choudhary vs. UOI, by a three-judge Bench.

Dismissing Arora’s appeal, the court relied on its ruling in Vijay Madanlal’s case to say that orally informing the accused of the grounds of arrest is sufficient.

What did the SC rule in Vijay Madanlal Choudhary’s case?

On July 27, a Bench of Justice CT Ravikumar, along with now-retired judges AM Khanwilkar and Dinesh Maheshwari, upheld the validity of the key provisions of PMLA.

In its 540-page ruling, the SC accepted the government’s arguments on virtually every aspect that was challenged by the petitioners, from reversing the presumption of innocence while granting bail to passing the amendments as a Money Bill under the Finance Act to defining the contours of the powers of the ED.

Among these, the validity of Section 19 was upheld, saying that the provision has a reasonable nexus with the PMLA’s object.

What happened in Pankaj Bansal’s case?

On October 3, Justices AS Bopanna and Sanjay Kumar held that to give true meaning to the constitutional and statutory mandate of Section 19(1) of informing the arrested person of the arrest grounds, “it would be necessary, henceforth,” that a copy of such written grounds be furnished to the arrested person, as a matter of course, without exception.

The SC has now ruled that the word “henceforth” in its earlier ruling implies its application to cases where the arrest took place after October 3, not before.

The similarity in the Pankaj Bansal and RK Arora cases is that the accused weren’t supplied with written grounds for arrest. Notably, the difference was that while the earlier ruling deemed this action to be an “arbitrary exercise of power,” the subsequent one upheld it as valid.

What happens when two Benches of equal strength differ?

Although there is no constitutional or statutory prescription on the issue, the rule of precedents has evolved by practice in India to “prevent the possibility of inconsistent decisions on similar points of law by different benches of equal strength,” a Constitution Bench of the SC said in its 1989 ruling in UOI vs. Raghubir Singh.

The court also ruled that a statement of law by a Division Bench “is considered binding on a Division Bench of the same or lesser number of Judges,” adding that this has been followed in India by several generations of judges.

However, in Pradip Chandra Parija vd. Pramod Chandra Patnaik (2002), a Constitution Bench ruled that if two Benches of equal strength arrive at different conclusions on the same question of law, the matter must be referred to a higher Bench. “If, then, the Bench of three learned Judges also comes to the conclusion that the earlier judgment of a Bench of three learned Judges is incorrect, reference to a Bench of five learned Judges is justified,” the court said.

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