Supreme Court ruling on supply of grounds of arrest in writing to PMLA accused will apply retrospectively: Punjab and Haryana High Court

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The Punjab and Haryana High Court on Tuesday observed that the Supreme Court’s ruling in the M3M case on supply of written grounds of arrest to accused under the Prevention of Money Laundering Act (PMLA) would apply retrospectively [Roop Bansal v. Union of India].

The Enforcement Directorate (ED)’s argument that the ruling would apply only to future arrests since the Supreme Court had used the word “henceforth” while making supply of written grounds of arrest mandatory in PMLA cases, was rejected by the bench of Justice Arun Palli and Justice Vikram Aggarwal

In a landmark order passed on October 3, the Supreme Court while granting bail to realty group M3M’s directors, Basant and Pankaj Bansal had said,

“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”

The Central government last month told the Delhi High Court that it was planning to file a review petition against the top court’s ruling.

While opposing petitions of NewsClick founder Prabir Purkayastha and Human Resources (HR) head Amit Chakraborty against their remand in a case under the Unlawful Activities (Prevention) Act, Solicitor General Tushar Mehta had argued before the Delhi High Court that M3M judgment will not apply to the arrests already made.

The question as to whether the top court’s ruling would apply retrospectively came before the Punjab and Haryana High Court during the hearing of a petition filed by another M3M Director Roop Bansal against his arrest by the ED on June 8.

After examining the law laid down by the Supreme Court on PMLA and arrests made under Section 19 of the Act, the bench headed by Justice Palli considered whether there was sufficient compliance with the provision.

Taking note of the Supreme Court’s ruling in M3M case, the Court observed that the mode of conveying the grounds of arrest in Pankaj Bansal case was exactly the same as that of the present petitioner.

The grounds of arrest had been read over them and not supplied in writing.

Thus, the Court held there was no sufficient compliance with the provisions of Section 19 of PMLA and Article 22 of the Constitution of India in view of the ratio laid down by the Supreme Court in the M3M case.

“The argument of the respondents that since the grounds of arrest would be required to be supplied henceforth, the arrest in the present case would not be affected, is devoid of merit,” the bench said.

Explaining it further, the Court said that while there was no doubt the apex court had held that the grounds of arrest would “henceforth” be furnished in writing to the accused, it had also declared the arrest of Pankaj Bansal and Basant Bansal to be illegal.

It added that the top court would not have released the duo had its intention been to make the condition only prospective.

Referring to Assistant Commissioner, Income Tax, Rajkot versus Saurashtra Kutch Stock Exchange Limited, the Court noted that the Supreme Court has held that a judicial decision acts retrospectively.

“It is, therefore, clear that the mandate that grounds of arrest would have to be conveyed in writing to the accused would not [only] operate prospectively,” the Court held.

Finding Roop Bansal’s case similar to Pankaj Bansal, the Court declared that his arrest was also illegal and cannot be sustained.

“The arrest of the petitioner and the subsequent orders remanding the petitioner to the custody of the ED cannot be sustained,” the High Court said while ordering petitioner’s release

Senior Advocates Abhishek Manu Singhvi, Randeep S Rai, Chetan Mittal and Aashish Chopra with Advocates Kunal Dawar, Rubina Virmani, Vipul Sharma, Arjun S.Rai and Varun Arjun Sharma, Varun Aryan Sharma, Sajal Bansal, Hargun Sandhu and Viren Sibal represented the petitioner

Deputy Solicitor General Jagjot Singh Lalli, Senior Panel Counsel Lokesh Narang with ED’s Special Public Prosecutor Simon Benjiamin represented the respondent.

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