The Delhi High Court recently held that oral communication of grounds of arrest amounted to proper compliance with Section 19(1) of the Prevention of Money Laundering Act (PMLA), 2002 before the Supreme Court delivered its verdict in Pankaj Bansal case [Neeral Singal v Directorate of Enforcement].
In the Pankaj Bansal case, the Supreme Court had said that the Enforcement Directorate (ED) must supply grounds of arrest in writing to the accused under PMLA.
In a judgement pronounced on January 8, Justice Vikas Mahajan said that the directions issued by the Supreme Court in Pankaj Bansal judgement are prospective in nature
“Directions contained therein (Pankaj Bansal) making it mandatory for the arresting officer to communicate the grounds of writing, are prospective in nature… Meaning thereby that 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 held.
The Court returned these findings while upholding the ED’s arrest of former Bhushan Steel Managing Director Neeraj Singal on June 8, 2023.
Singal approached the Court arguing that he was only provided with the ‘arrest memo’ since it is the only document that finds reference in panchnama and the arrest was made during search proceedings.
It was stated that a conjoint reading of the arrest memo, arrest order, panchanama, remand applications dated June 10, 2023 and June 20, 2023 and the orders passed by the Special Judge (PMLA) led to an irresistible conclusion that the ‘ground of arrest’ and ‘arrest order’ were neither shown nor provided to the petitioner and therefore, the arrest dated June 9, 2023 was in violation of Section 19 of PMLA.
ED argued that the grounds of arrest were provided and the same bear Singal’s signature as well as the time when his wife was informed of the arrest.
It was also argued that the Pankaj Bansal judgment is prospective in nature and therefore, at the time of Singal’s arrest the decision of Delhi High Court in Moin Akhtar Qureshi v Union of India was holding the field.
In Moin Akhtar Qureshi, a Division Bench of Delhi High Court had held that oral communication of ground of arrest was proper compliance with Section 19(1) PMLA.
After considering the case, the High Court concluded 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 said.
“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 single-judge ruled.
Justice Mahajan also said that 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, the Court ruled.
The Court, ultimately, concluded that Singal’s arrest cannot be said to be illegal.
The Bench also rejected Singal’s bail application.
Neeraj Singal was represented through Senior Advocates Kapil Sibal, Dr Abhishek Manu Singhvi and Vikas Pahwa as well as advocates Ranjana Roy Gawai, Ujjwal Jain, Shambhavi Kashyap, Adit Pujari, Avishkar Singhvi, Garnil Singh and V Wadhwa.
ED was represented through its Special Counsel Zoheb Hossain as well as advocates Vivek Gurnani, Baibhav, Manisha Dubey and Pranjal Tripathi.
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